Formerly Homeless Unpaid Intern Leading a Lawsuit Against Warner Music

July 16, 2014 By

Link to Newsweek Article by Zach Schonfeld

Kyle Grant was still living in a Bronx homeless shelter when he started interning at Warner Music Group (WMG) in August 2012. The gig was unpaid, and he couldn’t afford an apartment of his own after moving out of his girlfriend’s mother’s house, but he took it anyway. He’d already worked at JAMBOX Entertainment, a much smaller music production company. He was planning to launch his own record label one day. A stint in Warner’s Music Promotions Department seemed a pretty great way to learn the basics.

But like so many facets of the unpaid intern industrial complex, it wasn’t quite what it appeared.

“As an intern I wanted to do whatever I could to make a name, to at least stand out to somebody,” Grant, now 23, told Newsweek in a recent conversation in a Manhattan law office. “That’s not what happened. It was just a routine of getting things.”

Most days, Grant was expected to fetch drinks for two different vice presidents. He also took lunch orders and took clothing to be dry-cleaned. “Things that have nothing to do with working in radio promotions,” he said. “Oh, man, I even took people’s luggage. When you need to repair luggage and you take it to Louis Vuitton? I was picking out jewelry and things like that.”

Unbeknownst to Grant, a set of federal Department of Labor guidelines—known as “Fact Sheet #71”—stipulates that an unpaid internship must be “for the benefit of the intern” rather than the employer. “The employer that provides the training derives no immediate advantage from the activities of the intern,” the document states, “and on occasion its operations may actually be impeded.” At a for-profit music conglomerate like WMG, operations probably weren’t impeded by an unpaid worker fetching lunch orders.

But Grant’s hours left little time for studying labor policy. He was taking classes at the time, but the internship required well over 40 hours a week, and his GPA soon plummeted.

“I was told if you want to be an intern here, there are small things you’ve got to do,” he said, “like coming in earlier, leaving later, be the first one here, be the last one out, that type of thing.” So he’d arrive by 9 a.m.—he had to make sure coffee was ready for his bosses—and would frequently stay in the office until 8 or 9 p.m. Then he’d return home to the shelter, which he describes as “like a large dorm room of adult homeless people,” including drug addicts and prostitutes.

That schedule posed another problem: The shelter had an 8 o’clock curfew. Often he would arrive home to find a note from the Department of Homeless Services (DHS) threatening to kick him out onto the streets.

“I had a lot of different obligations to deal with, and it kind of felt like they were insensitive to that,” Grant said. “It was like, OK, I’m not getting paid here, I’m here more than freaking paid employees. When I say I have to be somewhere Monday because they’re going to cut off the food stamps benefits I get, you can’t tell me my job is in jeopardy. Which kind of made me fear my job security even more. Which kind of made me want to be there even more hours, because it was like, OK, I called out last week, let me do that much more.”

Those fears turned out to be warranted. Grant worked for about eight months without compensation—an exceptionally long time by internship standards, though he said some interns had been there for three or four years. (“The joke around the label was, ‘Oh, that’s a super-intern.’”)

Then he was fired.

Grant says he was let go for taking too much time for his lunch break. He’d been spending his downtime trying to get the A&R department excited about a band that was doing well in Thailand. He set up a meeting over lunchtime, though he had no regularly scheduled time to eat, and when he got back to his desk, he was told to leave.

So he did what an increasingly sizable number of disgruntled ex-interns have been doing over the past two or three years. He sued.

Grant isn’t the first to cap off an unpaid internship with a class-action lawsuit alleging wage violations instead of the routine employer references. Nor was he the first to take legal action against WMG. A former Atlantic Records intern named Justin Henry targeted WMG, which owns Atlantic, with a proposed class-action lawsuit seeking unpaid wages in June 2013—just two months after Grant’s internship came to an abrupt end.

Henry declined to comment for this article, but court documents obtained by Newsweek suggest his experience wasn’t dissimilar from Grant’s. While interning in the A&R department in late 2007 and early 2008, Henry “was responsible for completing various office tasks such as answering telephones, making photocopies, deliveries, creating lists, preparing coffee, and running personal errands for paid employees,” a statement says.

Grant’s mother learned about the lawsuit on the news and told her son. “I saw who was representing him, and I reached out,” Grant said. Virginia & Ambinder, a lower Manhattan law firm that specializes in labor law, has brought similar cases from former interns against Madison Square Garden, Viacom, Sony, Universal Music and other companies. The firm is spearheading this suit in collaboration with attorneys at Leeds Brown LLP. Soon Grant became the lead plaintiff. “I just knew that I busted my ass for Warner Music Group, and I got fired. I’m entitled to some compensation.”

In May, the suit was granted collective action status. Under the Fair Labor Standards Act, that means the firm now has permission to alert anyone who has interned for WMG in the past three years and invite the person to join the lawsuit. Those interns number around 3,000, the firm says.

WMG has mostly kept quiet. “Given that this is a pending matter, we will let our legal filings speak for themselves,” a representative told Newsweek in a one-line statement. The company’s defense seems to hinge on questioning the commonality of the plaintiffs and arguing that its interns should be classified as “trainees” rather than employees, an exception detailed in the 1947 Supreme Court decision Walling v. Portland Terminal Co. That argument served Hearst well when former Harper’s Bazaar, Marie Claire and Cosmopolitan interns were denied class-action status in 2013.

But will Warner have the same luck? The company is so large that past interns described drastically different experiences from department to department. The one consistency: All who interned in the past decade confirmed that their work went uncompensated, save for the occasional subway fare stipend (about $5, or two subway rides, a day).

For some, the unpaid hours paid dividends.

“Warner definitely opened up so much opportunity for me,” said Dylan Steinberg, a 2007 intern who went on to launch a small video production company. “They had me produce and write a treatment on a band called Shadows Fall. They loved the treatment, and they hired me and my college roommate, and we put together a show package. They somehow trusted me, a college sophomore, with a $7,000 budget.”

Other stories related to Newsweek were less inspiring. One former intern, who worked in WMG’s London office and spoke on condition of anonymity, said she spent every day digitizing hundreds of CDs into a computer database until her eyes hurt from updating the metadata.

“Sometimes for eight hours I was hardly spoken to, as my supervisor was in another room and the employees in the same room were not very willing to talk to me,” the ex-intern wrote in an email. She’d been told there might be a paid gig waiting on the other side, but after two months her boss said that wouldn’t be possible “because a lot of people wished to work for Warner for free.”

The popular wisdom is that those lining up to work for free are children of the wealthy, people who can afford to clock hours without pay. But data compiled by the consulting firm Intern Bridge show that poor and middle-class students are just as likely to land in unpaid internships.

Interns like Grant, in other words. They can’t “afford” to work for free, by any metric. But they’ll do it anyway.

Three years ago, a lawsuit like Grant’s might have been tossed out of court and mocked by the media. So what’s changed?

When the activist group Intern Labor Rights formed in early 2012—put together from the listserv of an Occupy Wall Street working group called Arts & Labor—the proliferation of unpaid internships was widely accepted and scarcely discussed, a relatively obscure concern at the fringes of labor law. As Ross Perlin documents in his 2011 book, Intern Nation, unpaid opportunities have skyrocketed over the past few decades. For companies, that’s particularly tempting during a recession.

But for uncompensated 20-somethings, it means one unpaid gig leading to another leading to another. In the arts and media world, the promise is always the same: exposure, experience and the faint glimmer of a paid gig at the end of the tunnel.

The Baffler magazine called out the increasingly exploitative practice as early as 1997, in “Internment Camp.” But courts and labor policy have only just begun to play catch-up.

The tipping point, experts say, was a high-profile 2011 suit against Fox Searchlight Pictures. Eric Glatt and Alex Footman, the plaintiffs, served as unpaid interns on the set of Black Swan in 2009. The two demanded back wages, arguing that their menial tasks—which mostly entailed fetching coffee and lunch orders—legally classified them as paid employees. They faced ridicule and threats that they’d never work in film again

Then, in 2013 a judge ruled that they should have been compensated as employees, and the floodgates opened. A new flurry of lawsuits arrived: against Condé Nast, against Gawker, against MSNBC and Saturday Night Live. When interns at The Nation decided to write a letter to the editor instead of suing, the magazine owned up and agreed to dole out minimum wage.

“When we filed the lawsuit, the media coverage favored ridicule more than respect,” Glatt said. “[Now] the sentiment has completely changed. The attitude about this has completely shifted. People recognize this is a practice that needs to end. Its time has come. More and more people are experiencing firsthand how dysfunctional this system is.”

Lucy Bickerton, a friend of Glatt’s who filed a similar lawsuit against the Charlie Rose show on PBS, where she interned in 2007, shares the sentiment. That case culminated with a classwide settlement amounting to $250,000, which the plaintiff called “a huge victory.”

“I never really thought it would go anywhere, honestly,” Bickerton told Newsweek. “The fact that it has really managed to do a lot and produce positive results is so heartening and really incredible.”

Doesn’t she worry the lawsuit will brand her as unemployable? She doesn’t: “If anyone has a problem with that as a potential employer, then they’re probably breaking some laws themselves.”

For arts and media organizations, the effects of the great intern revolt, as it’s been dubbed, have been mixed. Companies as high-profile as the New York Times Co. have been successfully pressured into paying all interns minimum wages. Others, like Condé Nast, have responded to lawsuits by doing away with the programs altogether.

But for labor-minded law firms, the results are less ambiguous. This is a burgeoning realm of employment law, and Virginia & Ambinder seems well positioned to take the lead. The WMG suit isn’t even the latest. Since then, the law firm has targeted Clear Channel, Atlas Media and others. Another leading firm, Outten & Golden, has represented suits against Charlie Rose, Condé Nast and Hearst and is reported to have set its sights on Vice Media.

“Our hope with these cases is that companies wake up and start paying their interns and realize the value of interns,” Suzanne Leeds, an associate at Virginia & Ambinder, told Newsweek. “You’re getting people like Kyle [Grant] who are really passionate about the industry, desperate to get their foot in the door. You’re getting really good workers, and they deserve to be paid.”

Meanwhile, the ex-interns themselves have moved on. Bickerton entered a post-bac pre-med program. Glatt just finished up his second year of law school.

More than a year removed from his internship, Kyle Grant has started taking classes again. He has an apartment. He’s building up his homespun label, Live.Out.Ur.Dreams Entertainment Worldwide (L*O*U*D).

He still has his Warner Music badge—a prized possession—but he’s learned not to place too much trust in the unpaid labor economy.

“There’s a lot of people that want to be in the music industry,” Grant said. “And the doors, they don’t really open. When they do, when [they] did for me, it was the biggest opportunity of my life. And it was taken away because I didn’t get people’s lunches promptly or whatever it was.

“That should be fixed,” he said.

Filed Under: Unpaid Internships Tagged With: , ,

Maggie’s Farm? Internships under scrutiny…

May 27, 2014 By

Link to The Monitors Article By Nicholas Burman

The internship: the pain of many post-graduates, and the basis of a two hour advert for Google masquerading as a film. Whatever the context, the subject always seems to be met with a slight, “oh well, that’s the way it works, so you know, deal with it…” attitude. That approach changed in the UK slightly last year as new legislation was brought in to criminalise unpaid work, but the issue has picked up considerable steam again recently with the news that up to 3,000 ex-interns might file lawsuits against Warner Music.

The argument about internships ties in with wider social issues surrounding youth unemployment, which is still close to a fourteen year peak. Len McCluskey, leader of Unite, told The Mirror that the thrust of government policy “is towards a low waged economy where insecure employment is rampant. We can’t tolerate an economic landscape that offers precious little hope of real jobs for our young people.” Internships are part and parcel of employment culture in the ‘media’ (TV, film, music, fashion, etc.) especially, as anyone who’s aimed to work in the creative industries over the past few years can attest to. And while the apprenticeships scheme is going strong (in the 2012/2013 period there were 510,000 apprenticeships available), for most people wanting work in the sector it can still feel like an uphill struggle.

There are clear benefits to internships, in the sense that they exist to give experience and on-the-job training for jobs which, for subtle reasons, are difficult to teach in an academic setting. The idea in itself that an education system should exist purely to deliver people into the workforce is pernicious for the generations of young people who expect to go to school to actually learn stuff, but ultimately people need to pay their rent, and on-the-job experience helps you work out if you are actually interested in that career in the first place. If you’re any good and opportunities arise then you might just be one of the lucky few to bag a career in a typically hard-to-get-into industry which, as it starts to grow faster than many other creative micro economies, sees competition grow even faster. So, the system has to get people into work, and until Revolution Russell Brand becomes a reality that’s the way it’ll continue.

A big negative of unpaid internships (apart from the fact that people aren’t paid) is the argument that by being unwaged the only people who can really afford to take them either already live in areas where these industries exist (largely the South East) or have backgrounds where their families can assist them with money (because of the imbalance of wealth, this also tips opportunities in favour of the South East). AsDavid Dennis has argued in The Guardian, this means only the privileged few can realistically aspire to become involved with industries such as journalism. The fact that the Government had to make clear last year that unpaid internships are illegal under employment laws really makes little difference to the overall attitude towards work which currently seems to exist (the phrase ‘you’re lucky to have a job’ being an example of a culture that sees the necessity to exist as a privilege and not a right). Many smaller companies take on interns and train them up and bring them into the fold once they grew, but there are also examples of very rich companies not paying people just out of principle, very rich companies like the ones Tony Blair runs (odd that a multi-millionaire whose Government introduced the minimum wage sees fit to ignore it).

The reason this has become a talking point again recently is because of a lawsuit filed by a Mr. Kyle Grant against Warner Music Group. As reported by multiple sources including HUH, “The Warner Music Group are facing a major lawsuit at the hands of 3,000 former interns. Sparked last year by ex-intern Kyle Grant, the lawsuit alleges that Warner routinely abused interns by having them mainly carry out basic tasks such as fetching coffee and grabbing lunch for the paid employees. This amounts to no music industry experience or educational value whatsoever, which is a requirement for unpaid internships.”

In the US, unpaid corporate internships have long been established, but the government’s compliance rules are very definite. You have no real control on the nature and scope of work you will be required to perform as part of the corporate internship program, even if you intern as part of a higher education curriculum to gain course credits toward your final degree. The point is that if the company fails to provide a structured educational experience, and instead requires you to perform the actual work of paid employees, however menial or complex, then you should be classified as a compensated employee, and paid at no less than federal minimum wage (which is $7.25/hour). Generally, for the corporate unpaid internship programme to comply with government regulations, the interns should almost be a hindrance, with most office time devoted to learning from witnessing and shadowing rather than actually performing routine tasks normally performed by paid employees.

The law firm of Virginia and Ambinder LLP represents plaintiff Kyle Grant in the class action against Warner Music Group and Atlantic Records Corporation. Recently the judge in this case issued a decision which will allow Grant to send a notice to over three thousand former interns notifying them of a right to participate in the case. I talked to one of the partners of the firm, Lloyd Ambinder, about the lawsuit. He informed me that students is the US often pay as much as $50,000-$60,000 in annual tuition, just for the opportunity to participate in a corporate unpaid internship program.

“Very often unpaid interns devote most of their time performing menial office tasks such as answering phones, running errands for managers, performing data entry, cleaning the office refrigerator, making photocopies and performing other tasks normally reserved for entry-level compensated employees. All too often, colleges accept the tuition payments but perform little or no monitoring to ensure that the intern is receiving a true educational experience rather than just ‘doing a job’.”

At the end of the day, colleges are complicit in this exploitation, since the school receives tens of thousands of tuition dollars from students who do not attend classes while performing unpaid internships. Other companies which have been sued by unpaid interns alleging the same offences as Mr. Grant include Sirius Radio, Viacom, Donna Karan, Conde Nast, Hearst Publications and Sony. To date, some of these intern cases have ended with the parties agreeing to an out-of-court settlement, while other cases continue to be litigated in the courts. I asked Lloyd whether he thought there was any way around the unpaid internship compliance problem, and for ways to move forward. His reply was: “Simple. Pay them.”

In Britain, apprenticeship schemes serve as a halfway house between education and paid work. Businesses use organisations like recruitment agencies to find suitable candidates for an apprenticeship position, essentially ‘learning on the job’, so work that benefits the company can be carried out while the apprentice involves themselves much like any employee would, depending on what they’ve been hired to do. Once a month an assessor comes to the workplace to check on how both parties are doing and ensure that certain criteria are being met. If all goes according to plan, the apprentice should come out of the process with aNVQ. Programs for media-orientated companies to get on board are available, such as UK Music’s push to bring young people into the music industry (with companies such as Liverpool-based publisher Sentric Music involved in the scheme). There are also less official apprenticeship schemes conducted by other companies, that act as a sort of internal enrollment model based on minimum pay in return for their support as educators in a sector.

In France, universities sometimes implement internships as part of higher education courses. When you do an internship for this reason you must sign an agreement between the university, the company, and yourself to be protected. If you do an internship in France for longer than two months, the company has to pay you a minimum (about 430 euros), while if it is less than two months they don´t have to pay you. However, if you do an internship abroad it’s different because the rules of the host country are applied. In this instance the university can take you through a process of receiving a grant.

There are three main companies that offer these funds. The first is the AMI/BMI, for students who already received money for the year to help them, with the CROUS (a regional organization providing student bursaries and university halls of residence) giving this money to students. ERASMUS is for internships in the European Union, with the Agency 2e2f providing the money. The final option is JALI, a support group for internships outside of the European Union and also for internships which are optional (not obligatory as part of a university course). In this case it’s the region where you are studying which gives the money to you. Whether you receive a grant for a course depends on whether the university agrees that the internship is worthwhile as part of your course and whether the funding organisation agrees.

Marion is a French student currently taking advantage of this scheme during an internship in London. “In general, I think it is a good system, maybe too good! [… For this year] CROUS created a new level of support to raise the number of students who can have help. I never saw people who were disappointed about it. In general they try to help everybody if they need money for their internship […] They try to give the right support. They adapt it on each project. […] I think we have a good system in France compared to other countries which don’t help students.”

One way to get people into work is to move the work to them, which was the idea behind Salford’s Media City, which saw large parts of the BBC transfer over to the Manchester borough. However, when mismanaged it can create a bit of disillusionment amongst the new locals regarding how many opportunities are brought into the area, such as when the Manchester Evening News reported that only 246 out of 600 new jobs created by the arrival of Media City were given to people living in the Greater Manchester area (with up to one hundred apprenticeship schemes also due to be created within the organisation). There has been some even more pessimistic reporting of the organisation’s arrival on the doorstep of Salford residents, but there’s also been plenty of positivity about the ensuing diversification of the market that can occur as a result of making such big corporations more regional.

The higher education website Study London says, “Did you know? London was voted the most cost-effective city in the UK for students. With so many part-time jobs available, you can support your studies and enjoy London life while you study. Plus you’ll have great work experience to add to your CV.” Theoriginal study they’re referring to made the claim based against a student loan combined with part-time work (not that useful a measurement in a declining jobs market), saying that they’d earn (on average) £5,024.40 a year. While students build up debt in the UK during studying, limiting their resources after graduating, the costs to live in London as a student (minus the tuition fees) can be up to £1,020 per month. If you doubled that to make it full-time work, earning post-grads £10,048.80 year, you’d still be struggling to pay the average monthly rent of a one-bed flat in zone two or three, where costs can be up to £1,000, or as ‘little’ as around £750 (via London.gov). You suddenly see a vast gap in between earnings and the ability to live in the capital, with gentrification, regeneration and commercialisation all playing a role in house prices and the jobs market.

Industry and state have to work together to solve the issues surrounding this area. Government should assist people during times when they don’t have the capacity or the capital to help themselves, and to pay for it big corporations should be paying full UK tax. Big corporations should also be more willing to part with a little bit of cash to help build a trained workforce. People should do what their interests and their natural skill sets lead them to, and the best person for the job should be the person that’s hired. Opportunities should be made equal for all or otherwise disadvantaged people will become excluded further and further from jobs which help shape the culture of the arts and media, homogenising culture and its industries in the process.

Filed Under: Unpaid Internships Tagged With: , ,

Ex-Warner Music Group Interns Clear Hurdle in FLSA Case

May 16, 2014 By

Link to Law.Com Article By David Bario

How's this for a bummer? Work from 9:30 a.m. to 8 p.m., five days a week, answering phones and making coffee and copies in a Manhattan office. Oh, yeah, and there's no pay, no career training and no academic credit.

That's how Kyle Grant allegedly spent nine months in 2012 and 2013, working at Warner Music Group’s Warner Bros. Records unit. Why Grant would exhaust almost a year of his young life this way is anyone's guess, but for employers the important thing is what he chose to do next. Last summer, Grant hooked up with one of the plaintiffs firms behind a growing wave of employment class actions in New York federal court, claiming that WMG violated the Fair Labor Standards Act when it failed to pay him and about 3,000 other ex-WMG interns for their work.

The case passed an early test on Tuesday, when U.S. District Judge Paul Gardephe agreed to send class notices to former interns who worked at WMG or its subsidiaries from June 2010 to the present. Gardephe ruled that the former interns were “similarly situated” enough to warrant notifying potential opt-in plaintiffs about the suit. The judge rejected arguments by WMG’s lawyers at Vedder Price that the company’s intern programs were too varied for class treatment, though WMG can still raise that defense as the litigation plows ahead.

Lawyers at Virginia & Ambinder and Leeds Brown brought the case in June 2013, alleging that WMG, its Atlantic Recording Corporation unit and other WMG subsidiaries broadly violated FLSA minimum wage and overtime rules in their internship programs. Last month the same plaintiffs firms won conditional certification of a parallel FLSA class action against Viacom Inc. Vedder Price also represents the defendants in the Viacom case, which is pending before U.S. District Judge Jesse Furman.

So far the momentum in the intern litigation has been with the plaintiffs, who have grown more numerous ever since U.S. District Judge William Pauley III ruled in June 2013 that former unpaid interns at Fox Searchlight Pictures Inc. qualify as employees under the FLSA and New York labor laws. That decision followed a major setback for the plaintiffs in a similar case against Hearst Corporation in May 2013, when Hearst's lawyers persuaded U.S. District Judge Harold Baer to reject ex-interns' class claims.

The Fox and Hearst cases are now being considered in tandem by the U.S. Court of Appeals for the Second Circuit, which has yet to set a date for oral arguments. Not surprisingly, the amicus briefs have been pouring in, with everyone from the U.S. Department of Labor to the U.S. Chamber of Commerce pointing out that the stakes are huge for employers and employees alike. Outten & Golden’s Rachel Bien is representing the plaintiffs in the consolidated appeals. The defendants are relying on Proskauer Rose (for Fox and Hearst) and Neal Katyal of Hogan Lovells (for Fox).

We reached out to Laura Sack at Vedder Price to ask about Tuesday’s WMG ruling, but we didn’t hear back. Lloyd Ambinder, who represents the plaintiffs, also wasn't immediately available to comment. Another lawyer at Virginia & Ambinder, LaDonna Lusher, noted that the firm is also pursuing similar cases against Sony Corporation, Columbia Recording Corporation, and other employers.

For a list of all the major intern class actions and their status, check out this handy chart from ProPublica.

Filed Under: Unpaid Internships Tagged With: , , ,