Interns Win Huge Victory in Labor Lawsuit Against Fox

"Black Swan"

 One of the indie world's busiest casting gurus, Mary Vernieu takes the call from everyone from Aronofsky ("Black Swan," "Noah") to David O. Russell ("Silver Linings Playbook"). She also assembled the cast -- led by Joseph Gordon-Levitt and Bruce Willis -- for Rian Johnson's "Looper."

In a ruling that is likely to be scrutinized throughout Hollywood -- and maybe corporate America at large -- a federal judge on Tuesday handed a couple of the interns suing Fox Searchlight a victory on summary judgment and also certified a class action over the internship programs of Fox Entertainment Group.

The lawsuit was first brought in late 2011 by two interns -- Alex Footman and Eric Glatt -- who both worked on Fox Searchlight's Black Swan and claimed that the company's unpaid internship program violated minimum wage and overtime laws.

Read the ruling here

The lawsuit then got bigger, with amended claims brought by added named plainitffs such as Kanene Gratts, who worked on Searchlight's 500 Days of Summer as well as Eden Antalik, who participated in the FEG internship program. To prevail, they would need to jump several hurdles, including showing that the training programs set up weren't for the advantage of the trainees.

On Tuesday, Federal Judge William Pauley issued a ruling that is very favorable to the suing interns.

Regarding Footman and Glatt, the judge grants summary judgment to them that Searchlight was their "employer," as that term is defined in the Fair Labor Standards Act and New York Labor Laws.

Fox attempted to convince Judge Pauley that the production companies -- like Lake of Tiers Inc. instead of Searchlight -- were responsible for hiring and controlling the interns, but the judge didn't buy it. Judge Pauley writes that "Searchlight's power to fire Black Swan production staff was unbridled," that "Searchlight closely supervised work on Black Swan," that "the crew of Black Swan was tied to Searchlight, not Lake of Tears," and so forth.

The judge also looked at whether the internship program qualified as a bona fide training program under the Labor Department's six criteria for determining whether an internship might be unpaid. These factors include whether the internship is similar to training that would be given in an educational environment, whether it is for the benefit of the intern, whether the intern displaces regular employees, whether the employer derives immediate advantage, whether the intern isn't necessarily entitled to a job after the conclusion of the internship, and the understanding about no entitlement to wages.

PHOTOS: Top 10 Legal Disclaimers in Hollywood

After going through the experiences of Footman and Glatt on Black Swan, here's what Judge Pauley concludes:

"Considering the totality of the circumstances, Glatt and Footman were classified improperly as unpaid interns and are 'employees' covered by the FLSA and NYLL. They worked as paid employees work, providing an immediate advantage to their employer and performed low-level tasks not requiring specialized training. The benefits they may have received -- such as the knowledge of how a production or accounting office functions or references for future jobs -- are the results of simply having worked as any other employee works, not of internships designed to be uniquely educational to the interns and of little utility to the employer. They received nothing approximating the education they would receive in an academic setting or vocational school. This is a far cry from [the Supreme Court's decision in] Walling, where trainees impeded the regular business of the employer, worked only in their own interest and provided no advantage to the employer. Glatt and Footman do not fall within the narrow 'trainee' exception to the FLSA's broad coverage."

Gratts, who completed a similar internship on (500) Days of Summer, was not as lucky. The judge grants the defendant's motion that her claims are time-barred.

But Judge Pauley's decision doesn't end there.

The federal judge in New York has certified a class action that will explore internships throughout the corporate departments at Fox Entertainment Group. Unlike a fellow judge who recently refused to certify a class action for some 3,000 fashion magazine interns working at Hearst, this judge sees commonality and the other factors that are required to move forward with such a class action.

Specifically, the judge rules "Antalik has identified several common questions relevant to determining NYLL violations, including: (1) whether Defendants derived an immediate advantage from interns' work, (2) whether interns displaced regular employees, and (3) whether FEG's internship program was for the benefit of interns."

The judge adds, "Here, the relatively small recoveries available to individual plaintiffs make a class action a more efficient mechanism."

The interns were represented by the law firm of Outten & Golden, which has now been appointed as class counsel.

Fox issued a statement to The Hollywood Reporter on the ruling:

"We are very disappointed with the court’s rulings. We believe they are erroneous, and will seek to have them reversed by the 2nd Circuit as quickly as possible."

Twitter: @eriqgardner