On July 2, 2015, the U.S. Court of Appeals for the Second Circuit decided Glatt v. Fox Searchlight Pictures, 2015 WL 4033018 (2d. Cir., July 2, 2015), an important decision concerning whether Fox’s unpaid interns are “employees” under the federal Fair Labor Standards Act and the New York Labor Law (collectively, the FLSA) and, therefore, entitled to recover minimum wage, plus time-and-a-half for overtime, for the periods they worked at Fox.
The Second Circuit reversed the lower court’s decision that Fox’s interns were employees under the FLSA. Media coverage characterized the Second Circuit’s decision as a decisive victory for employers and a defeat for interns. See “Interns, Victimized Yet Again,” The New York Times, July 3, 2015; “‘Black Swan’ Interns Suffer Setback in Wage Fight,” The Wall Street Journal, July 2, 2015. The careful employment practitioner, however, should not believe the hype. The Second Circuit held that the lower court applied the wrong test for determining whether interns are exempt from the FLSA and remanded the case to be decided under a different—but not necessarily more lenient—test. The Second Circuit’s decision, moreover, stands out as the only significant decision addressing this important topic, newly imposes important educational requirements upon exempt internship programs, and will flunk many internship programs.
