NBCUniversal has decided to make the historic step of settling claims of violating labor laws through its unpaid internship program by agreeing to pay $6.4 million.
The settlement marks the most significant development since a federal judge ruled in June 2013 that Fox Searchlight was the "employer" of two former interns who had worked on the film Black Swan. That ruling set off a wave of lawsuits against entertainment and media companies, and while Fox has appealed the summary judgment to the 2nd Circuit, NBCU won't wait for any appellate interpretation of the Fair Labor Standards Act. Instead, the media giant has chosen to lean forward with the biggest pay-out yet to former interns.
The lawsuit against NBCU was filed in July 2013 by attorney Justin Swartz of Outten & Golden, the same firm representing ex-interns against Fox.
Monet Eliastam, who says she worked 25-hour-or-more weeks on the staff of Saturday Night Live in 2012, was the lead plaintiff in the proposed class action. Originally, former MSNBC intern Jesse Moore was a co-plaintiff, but he withdrew. Others including Alexander Vainer, Rheanna Behuniak, Samantha Kurlander, Nicole Klepper and Jamaal Brown came forward in the case with their own claims.
After NBCUniversal was hit with the lawsuit that claimed it had misclassified its workers as unpaid interns and thus denied them benefits like a minimum wage salary, overtime pay, social security contributions and unemployment insurance, it agreed to consider a settlement. According to Swartz' declaration, NBCU was provided data showing its number of interns as well as a damages model based on the data. On January 16, the parties attended a full-day meeting at the law offices of Morgan, Lewis & Bockius, where they reached a tentative agreement on the settlement amount and other key terms. However, the settlement wasn't executed until Wednesday.
U.S. District Judge Ronald Ellis will now need to sign off on the deal, but if it holds up, about $1.18 million of the total $6.4 million will go to plaintiffs' attorneys, according to court documents submitted yesterday. Eliastam will receive a service payment of $10,000, Vainer and Behuniak will get a service payment of $5,000, and the three other opt-in plaintiffs will see a $2,000 reward.
The rest will be going to thousands of other former NBCU interns. The average settlement payment is estimated to be $505 to those interning at NBCU in New York since July 3, 2007, those interning at the company in California since February 4, 2010, and those interning at the company in other states since February 4, 2011. If approved by the judge, former interns covered by the class will have to opt out if they wish to preserve any claims.
"The settlement amount represents substantial value given the attendant risks of litigation, even though recovery could be greater if Plaintiffs attained class certification, overcame motions to decertify any class or collective, succeeded on all claims at trial, and survived an appeal," states a memorandum in support of the motion to settle.
Internship cases remain pending against Fox, Sony, Warner and Viacom, among other entertainment/media companies. Among the companies settling have been Charlie Rose, Condé Nast publications and Elite Model Management.
NBCUniversal Agrees to Settle Unpaid Internship Claims
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