Lamberton Law Blog

The Post-Gazette's Michelle Hackeman interviewed us for this wonderful piece on unpaid internships and the Fair Labor Standard Act.  As Michelle reports, college students seek internships to gain job experience and learn what cannot be learned in a classroom.  That experience is supposed to give them a leg up on their competitors when they graduate and are applying for jobs.  But what happens when employers hire interns for no pay and then assign them menial work?  The employer gains an unfair advantage over its competitors and swindles the student interns who choose to invest in their future careers by working without pay in the short term.  Such conduct has broad repercussions, as Michelle reports in her article.

Many students debate the value of unpaid internships - By Michelle Hackeman / Pittsburgh Post-Gazette

Up until her junior year at Chatham University, Elizabeth Dorssom supplemented the hours she poured into her schoolwork with a job at a Bath & Body Works store. She would need the extra money: In May 2012, she graduated with $40,000 in student loan debt.

Ms. Dorssom knew, like many of her college-age peers, that a bachelor's degree would not be her ticket to securing a job. So in her junior year, she quit her job to take an internship at the Allegheny County district attorney's office, which didn't offer her payment for the work.

The plight of the unpaid intern has gained notoriety following a lawsuit in New York against Fox Searchlight Pictures, the producer of the movie "Black Swan" that employed several unpaid production interns on its set. Judge William Pauley of the southern district of New York, who ruled in favor of the interns in June, said Fox had violated federal labor laws by not offering its interns proper compensation, though it had benefited from the interns' work.

"I have heard employers say that they just love their unpaid interns because they see them as free employees," said Charles Lamberton, president of the Pittsburgh-based Lamberton law firm who represents plaintiffs in employment disputes and other civil rights cases.

"For so many of these interns, the entry-level position is an unpaid internship. There's no other way in. That's the door they have to go through."

According to the Fair Labor Standards Act, which regulates pay and overtime, an internship program can be unpaid if it meets several criteria. The internship must contain a significant training component, comparable to an education program. The intern's work must not benefit the employer, "and on occasion its operations may even be impeded."

According to the judge's decision, the experience and connections that an intern gains while working are not sufficient forms of compensation to justify not paying them the minimum wage.

The ramifications of this ruling may have the effect of leveling the playing field for students who seek work experience before they apply for full-time jobs.

In recent years, college students and employers have increasingly regarded internships as stepping stones on the way to full-time employment, so much so that the internship has come to replace a traditional entry-level position.

In a 2009 survey conducted by the National Association of Colleges and Employers, more than three quarters of employers said they prefer job candidates with the requisite experience that can be gained through an internship.

But about half of the internships in the United States are unpaid, according to a 2013 survey by the association.

For some students, working for free carries few costs. Other than the time they are sacrificing without pay, they can save money by living at home or asking parents to assist with living expenses. But for others, taking an unpaid internship means forgoing much-needed earnings.

Mike Howie, who graduated from Robert Morris University in May without a job waiting for him, began looking for unpaid internships to gain experience. He said that, though the situation was far from ideal, he could afford to do so because his family will allow him to live at home.

"It would be a major setback -- I want to move out, I want to start making money and saving money," he said.

For her part, Ms. Dorssom was able to work at the district attorney's office for 10 hours a week because she spent an equal number of hours working as a secretary at her campus's police department. The money she made that summer covered her rent and living expenses, but stretched no further.

Many internships require students to obtain course credit for their work as a form of compensation, a practice that the judge in New York pronounced illegal. What often goes unmentioned is that obtaining course credit costs money, as universities consider it the equivalent of taking a class over the summer.

Most of the major universities in the Pittsburgh area offer course credit for internships, including Carnegie Mellon University, the University of Pittsburgh, Chatham and Penn State University. The price of a three-credit internship can range anywhere from $500 to $3,000.

Chatham, Ms. Dorssom's alma mater, recently made completion of an internship one of its graduation requirements. "The university really regards this as an academic endeavor," said Chris Miller, director of career development. "It is considered part of their tuition -- just as they pay for any other class, they're paying for that credit."

Jennifer Gosslin, a Pittsburgh native and a senior at West Virginia University in Morgantown, W.Va,, also faced an internship-for-credit policy.

After working as a news broadcaster at her college radio station, she wanted to try her hand at commercial radio with an unpaid internship at Froggy Radio in Pittsburgh. But the internship would have cost her $3,000 in course credits, not counting any of the living costs she would incur over the summer. She opted to work at a Bridgeville restaurant instead.

"I think it's really stupid that you have to pay thousands of dollars to get this experience for free and give up time from your actual job in the process," she said.

Tresa Weimer, the interim director of financial aid and scholarships at WVU, said that, in cases such as that of Ms. Gosslin, the financial aid office would advise students to pursue private loans.

Since unpaid internships have such a high threshold of entry, economists and public policy experts have begun pointing to them as a major block to economic mobility. As the theory goes, only students wealthy enough are able to accept unpaid internships, and the experience they gain gives them a leg up over lower-income students who could not afford to work without pay.

"As an economic reality, a lot of people are economically shut out of those sorts of career opportunities," Mr. Lamberton said. "People in that income group, they don't have savings. It's just not an opportunity that they can pursue."

Even if the New York lawsuit does effect broader change, its purview only extends as far as internships in the for-profit sector. Under federal labor law, government agencies and nonprofits can still hire unpaid interns, since the law states that they are volunteering their time.

"I'm most worried about this in places like government, where it's important to have people representing different income brackets," said Ross Eisenbrey, vice president of the Economic Policy Institute, a nonpartisan think tank in Washington, D.C.

"But the only people who have the experience to get a job on Capital Hill are the people who can afford it -- the people whose parents were able to support them through their unpaid internships. That's very bad for our democracy."

Unfortunately for Ms. Dorssom, the public sector is definitely where her interest lies. Even after completing her unpaid internship at the district attorney's office, she has still struggled to find work.

When no job opened up after her graduation last year, she enrolled in an online public policy graduate program at the California State University, Northridge. She chose the online program so that she does not have to pay for room and board.

"I know that when I finish my master's degree, a lot of the jobs I will want require experience, but I can't get the experience if no one will hire me," she said. "Still, I can't take an internship unless it's virtual or paid. Because I can't afford the gas money to commute."

Michelle Hackman: mhackman@post-gazette.com or at 412-263-1969. First Published July 14, 2013 12:00 am