Court Cases, Legislation Spur Some Companies to Drops Programs; Others Introduce Pay
After a string of high-profile lawsuits, schools have tightened policies for posting summer interns. Conde Nast and other firms have eliminated their internship programs entirely, making for even tougher competition for the positions that remain. Rachel Feintzeig reports on the News Hub.
The rules have changed for summer interns.
Since last year’s class vacated the lowest rungs of the corporate totem pole, a string of high-profile lawsuits by unpaid interns has worked its way through the courts, and legislatures have passed new protections, forcing both schools and employers to rethink their policies.
Some companies are moving toward paid programs. Others, like magazine publisher Condé Nast, are getting rid of internship programs altogether. The pressures could result in better pay and educational experiences for interns who win the coveted openings—but fiercer competition for the spots that remain.
In recent years, internships have become a near-necessity for college students trying to stand out in a brutal job market. And while some positions can provide valuable work experience and a glimpse into corporate life, critics maintain that the stints often amount to little more than unpaid labor.
A survey last year from the National Association of Colleges and Employers suggests unpaid internships don’t help students land full-time jobs. Alums of unpaid internships had full-time job offers at nearly the same rate as those who had no internships at all—about 37%, compared with 62% for those with paid internships.
School officials say they are increasingly looking to protect students from subpar internships. In February, Columbia University stopped giving students special credit on their transcripts for internships. New York University now requires employers to click a button certifying their internship measures up to Department of Labor guidelines before posting it on the school’s careers website.
And Hamilton College, in Clinton, N.Y., won’t post openings for unpaid positions from companies that they know also offer paid internships.
“It’s clear, in the last year, that colleges and universities have begun to individually and collectively come up with a voice on this,” says Mary McLean Evans, assistant vice president and executive director at Hamilton’s career center.
NYU was galvanized, in part, by a petition started last year by third-year student Christina Isnardi. The 20-year old felt “exploited” after spending the summer of 2012 as an unpaid intern on a film produced by Lions Gate Entertainment Corp. She said she sometimes worked 16- or 17-hour days, taking breakfast orders for the cast and crew or watching equipment far from the film set.
A spokesman for Lions Gate declined to comment.
“There are hundreds of students who are sick of this,” Ms. Isnardi said. “We just feel as though our dreams are holding us hostage to this unfair, unethical labor practice.” Her petition gathered more than 1,000 signatures.
State and local governments also have taken up the cause, pushing in recent months for fresh intern protections.
New York Mayor Bill de Blasio signed legislation last week extending the city’s employment discrimination laws to interns, including those who are unpaid. A similar bill won unanimous support in the California State Assembly’s judiciary committee Tuesday. And Oregon last year passed a law extending discrimination benefits to all interns, while Washington, D.C., did so in 2009.
The developments are having mixed effects on employers.
Viacom Inc., facing a lawsuit brought by former MTV interns, made its hundreds of internship positions paid starting last summer, said spokesman Jeremy Zweig. Before, practices had varied, he said.
LeanIn.Org, the nonprofit group founded by Facebook Inc. FB -2.35% Chief Operating Officer Sheryl Sandberg to further women’s career ambitions, came under fire in August after advertising for an unpaid intern; the incident prompted the organization to start a paid program, according to a spokeswoman.
A suit against Condé Nast, which involves former interns at W Magazine and the New Yorker, is currently in settlement talks, according to the plaintiffs’ lawyer. Condé Nast declined to comment on the suit or whether it had any plans to revive its internship program.
Jay Zweig, a Phoenix-based managing partner at Bryan Cave LLP, said he is aware of “dozens” of companies that have walked away from unpaid-internship programs, dropping students entirely rather than creating paid positions. (Arizona’s minimum wage is $7.90 an hour.)
Though there are fewer positions, Mr. Zweig says he thinks the internships that do exist are more substantive. “They’re not just being hired on as unpaid labor doing menial tasks,” he said.
At for-profit companies, 38.2% of interns didn’t get hourly wages, according to a 2012 survey of more than 11,000 students by research group Intern Bridge.
The Fair Labor Standards Act says that unpaid internships shouldn’t be for the direct advantage of the employer, should benefit the intern and be educational, and must not displace regular employees.
One spark for the firestorm over internships was a June ruling by a federal judge that 21st Century Fox Inc.’s Fox Searchlight Pictures violated minimum wage and overtime laws for not paying interns who worked on the film “Black Swan” doing the same tasks as paid employees. Until last year, 21st Century Fox shared a parent company with The Wall Street Journal.
In November, Fox was granted the opportunity to appeal the suit’s class certification and summary judgment, which went in the interns’ favor, to the Second Circuit Court of Appeals, where it is now pending.
A Fox representative declined to comment on the suit, citing the continuing litigation.
That lawsuit has opened the floodgates. Lloyd Ambinder, partner at New York-based Virginia & Ambinder LLP, which is representing unpaid interns in suits against Warner Music Group Corp., Viacom, Madison Square Garden Co. and other employers, says he has spoken to or met with at least 40 to 50 interns in the past month.
His office will have some help handling the caseload: Ms. Isnardi, the NYU student, landed a summer job there. It is a paid position.
Article on The Wall Street Journal By Rachel Feintzeig and Melissa Korn