Law Students

Unpaid Internships Illegal?

By Casebook Sherpa

An attorney I met recently, pointed me to this post. Here’s the nutshell: Brian Cuban, the owner of the NBA’s Dallas Mavericks, wanted to start work on a more dynamic statistics service that could provide richer statistical data free of charge to any sort of media (from student papers to social networks). It was a long-term project. So he figured he’d bring in some unpaid interns to do some of the initial work to see if the idea had any value before making an investment of his own capital. Wise business move – the interns get great experience with the professional sports franchise and media organization while the Mavericks get some free labor (who, if they prove themselves, would presumably have paid opportunities down the road).

Enter the U.S. Government.

Cuban’s Human Resources guy sent him some information (which appears to be an analysis culled by a blogger or attorney in California) that included this nugget:

The U.S. Department of Labor has outlined a list of criteria that ALL must be met in order for an internship to be unpaid.

1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
2. The training is for the benefit of the trainee;
3. The trainees do not displace regular employees, but work under close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer?s operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the completion of the training period; and
6. The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training.

From the above list, #4 is really the key one ? all the others will follow from whether the employer derives any immediate benefit from the activities

The main reason that you do not see more lawsuits regarding unpaid internships is that the interns are very unlikely to sue.  In most cases, they fear being blacklisted, as they will undoubtedly need to use the internship as a reference to get any future work.

Unpaid internships are a staple in the student’s career planning diet (more so for full-time students, obviously). I’ve pursued a handful of unpaid opportunities that I could do remotely and fit into my work and school schedule in order to gain some legal experience. In each case, I added value to the organization and in each case I received in return that legal experience which allowed me point and some jobs that prove I possess at least a minimal level of competence in performing legal tasks. I had every right to say no. And the “wages” I received were fair.

So are unpaid internships slave labor? Or is the Department of Labor being utterly ridiculous here? Perhaps it’s just a situation where the DOL needs to have this on the books to go after those employers who use the word “internship” to extract too much labor from interns? This last justification wouldn’t justify how broad the rule is though.

Full post as published by Fight The Hypo on September 29, 2009 (boomark / email).