Viacom Inc. has settled a major class-action lawsuit brought by about 12,500 former interns who claimed they were not paid, despite the fact that they did work similar to paid employees. Viacom, who owns Nickelodeon, MTV, BET, and Comedy Central, settled the case for $7.21 million.
Recently, a lot of big companies, especially in the entertainment industry, have been facing lawsuits by interns who claim they were not paid, or were paid less than minimum wage, in violation of the federal Fair Labor Standards Act (FLSA) and applicable state labor laws. Last year, Comcast Corp’s NBCUniversal unit settled a similar case for $6.4 million, and magazine publisher Condé Nast reached a $5.85 million settlement.
Unpaid interns are frequently taken advantage of, as companies use them as cost-savers by enticing them with the prospect of getting a foot in the door. Labor laws, however, require that unpaid internships primarily benefit the intern, not the employer. The FLSA states that interns working in in “for-profit” private sector internships or training programs can go unpaid if the internship meets the following criteria:
- It is similar to training which would be given in an educational atmosphere, even though it includes actual operation of the facilities of the employer;
- It is for the benefit of the intern;
- The intern does not displace regular employees, but rather is closely supervised by existing staff;
- The employer does not derive immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to pay.
This Viacom settlement, arising from the case Ojeda et al v. Viacom Inc et al, applies to interns who worked in California from September 2010 to June 2013, and interns who worked in New York from August 2007 to June 2013. Interns who submit could collect up to $1,010.
Viacom claims that there was no wrongdoing, and stuck up for its internship program. According to Viacom, the program has helped thousands of students launch careers in the entertainment business.