Mary-Kate and Ashley Olsen’s fashion empire is worth an estimated $1 billion. Interns at the Olsens’ Dualstar Entertainment company are unpaid. And, as of Tuesday, they’re suing.
A class-action lawsuit filed in Manhattan Supreme Court alleges the Olsens failed to pay 40 past and present interns. Lead plantiff Shashista Lalani, a former design intern, told Page Six about her unpaid gig at the Olsens’ Dualstar Entertainment Group in 2012, where she worked under the head technical designer for The Row, the Olsen’s high-end fashion label, for five months.
“I was doing the work of three interns,” Lalani told Page Six.” I was talking to her all day, all night. E-mails at nighttime for the next day, like 10 p.m. at night.” She also says she worked 50-hour weeks and was hospitalized for dehydration. “You’re like an employee, except you’re not getting paid. They’re kind of mean to you. Other interns have cried.” (The Row did not return a request for comment.)
This is the latest in a string of unpaid intern lawsuits — against Conde Nast, Hearst, and Elite Model Management, to name a few — that claim these internships, long a staple of their respective industries, violate state and federal minimum wage laws.
The suits have a handful of key things in common: They’re all from the past five years or so. The defendants are famous corporations and/or individuals, which means the optics are not in favor of the well-heeled and wealthy companies or celebrities neglecting to scrape together pay for their interns.
The industries are in the sectors of media, entertainment, and fashion, where unpaid internships are traditionally considered a right of passage. There is something almost sweet in how sour it is — it’s not unlike the way some Greek organizations or athletic teams feel about hazing — that everyone will go through something objectively bearable-but-bad in order to ascend to true membership. A classic vision of the harried fashion intern persists, with her Devil Wears Prada boss, the samples piled high in the crook of her elbow, stack of Starbucks orders in one hand and a cell phone in the other.
“I think it’s reflective of the fact that advocates in this emerging intern rights movement are trying to identify, as a strategic mater, wealthy, high-visibility companies to bring these lawsuits at,” said David Yamada, a law professor at the University of Suffolk in Boston and founding director of the New Workplace Institute, by phone. “It really underscores the fact that a lot of these internships are, frankly, exploitative, and these are entities that could easily afford to pay interns minimum wage and for whatever reason, they’re not doing so.”
What sparked the explosion of the unpaid intern lawsuit? First, in April 2010, the Department of Labor released “Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act,” a document specifying the requirements employers should meet in order to be exempt from paying minimum wage to interns.
In it, a six point “Test For Unpaid Interns” lists the criteria used to determine whether an internship is “for the [intern’s] own educational benefit.” Included on the list are vague guidelines such as “the internship experience is for the benefit of the intern,” “the employer that provides the training derives no immediate advantage from the activities of the intern,” and that “the intern does not displace regular employees.”
“Aren’t most interns at least performing entry level tasks that have to get done in the office?” Yamada said. “Even if somebody is ‘just getting copies’ or running errands, someone else would have to do that work if the intern wasn’t doing it.”
The Fact Sheet was met with pushback, notably from thirteen University presidents, including John Sexton of New York University and Mark G. Yudof of University of California, who wrote to the Department of Labor to fight back against these regulations. Plenty of corporations hire unpaid interns through colleges, which in turn award academic credit for the internship, absolving the employer of the obligation to pay interns. But colleges can, and often do, charge interns tuition for the privilege of getting credit for the internship. It is the inverse of the intern’s experience: Instead of doing all the work for no pay, universities do none of the work for all of the pay.
But the case that kicked off this wave of lawsuits belonged to Eric Glatt and Alex Footman, former unpaid interns on the film Black Swan, who brought a lawsuit against Fox Searchlight Pictures in 2011 for violating minimum wage laws. Their suit “publicized the issue at a national level,” said Yamada. The latest on that lawsuit is a setback: The U.S. 2nd Court of Appeals in New York vacated a federal judge’s 2013 ruling in the unpaid interns’ favor, claiming that a set of standards other than those set forth in Fact Sheet #71 should apply. His litmus test: “The proper question is whether the intern or the employer is the primary beneficiary of the relationship.
The “primary beneficiary” test is “very pro-employer,” said Yamada, because it “zeroes in on things like intangibles, such as networking, experience, making contacts, and it ignores the benefits of internships to employers: To train the next generation of professionals, the chance to evaluate people for future positions.”
But the progress — or damage, depending on your point of view — had already been done. Hot on the heels of the Fox lawsuit came cases against NBCUniversal, Viacom, Warner Music Group, Conde Nast, Hearst, Elite Model Management, and, now, the Olsens. All of those cases (the Olsens excepted) resulted in multimillion-dollar settlements with the ex-interns. Conde Nast went on to eliminate their internship programs entirely.
And that doesn’t even get into the issue of the group who is arguably hurt by unpaid internships even more than the interns themselves: Anyone who cannot afford to do work for no pay. It’s appalling to see unpaid internships continue to reign in fields like media, fashion, and entertainment, where diversity is so desperately lacking and internships still act as a main pipeline for jobs.
“We may not even know how many people are opting not even to apply because they see that the internship is unpaid and they just self-select out of the application process because they know they can’t afford to work without compensation,” said Yamada. “And when you dig deeper, there may be racial and ethnic impact, in terms of groups that generally have more socioeconomic challenges.”
The fact that interns feel emboldened enough — spurred on by past successes, changing attitudes, and the awareness that, if nothing changes, they’ll forever be trapped in “the permanent intern underclass” — makes Yamada optimistic that “this emerging movement is having an impact and will continue to have an impact. But it also depends on these newer generations continuing to voice their objections to working without compensation.”
“If these lawsuits establish the legal precedent that they’re seeking,” he said, “absolutely, that landscape will change.”