NEW YORK (Reuters) - Thousands of former interns at NBCUniversal, including on the late-night TV show “Saturday Night Live,” have reached a $6.4 million settlement of a class-action lawsuit claiming they should have been paid for their work.
The settlement resolves claims that NBCUniversal, a unit of Comcast Corp, violated the federal Fair Labor Standards Act and state laws in New York, California and Connecticut by classifying the plaintiffs improperly as “non-employee interns,” exempt from applicable wage and hour requirements.
Court approval is required for the settlement, which was filed Wednesday night in the U.S. District Court in Manhattan. The average payout would be about $505, court papers show.
“It was probably a good idea for NBCUniversal to settle,” said Marcia McCormick, an employment law professor at Saint Louis University School of Law. “NBCUniversal ran the risk that its decision not to pay interns might be viewed by a court as willful, which could result in much higher damages.”
NBCUniversal denied wrongdoing in agreeing to settle. A spokeswoman, Lauren Skowronski, declined to comment.
Justin Swartz, a partner at Outten & Golden representing the plaintiffs, did not immediately respond to requests for comment.
The July 2013 lawsuit is one of dozens filed in the United States challenging private companies’ longstanding practices of paying interns nothing, or less than minimum wage.
Many were filed after U.S. District Judge William Pauley’s groundbreaking June 2013 decision that Twenty-First Century Fox Inc’s Fox Searchlight Pictures should have paid two interns, also represented by Outten & Golden, who worked on the 2010 movie “Black Swan.”
Relying heavily on U.S. Department of Labor guidelines for internships, the Manhattan judge said interns often supplant paid employees, and typically deserve to be paid in part because employers are the “primary beneficiaries” of their work.
This is true, he said, even if interns get benefits such as on-the-job experience, and the chance to build their resumes and obtain references.
Among the other companies sued by interns are the publishing houses Conde Nast and Hearst, and Warner Music Group.
Conde Nast ended its internship program last October, and according to court papers “finalized” the main settlement agreement about two weeks ago.
“The decision in the Fox Searchlight case really did change the landscape,” said David Yamada, an employment law professor at Suffolk University Law School in Boston.
NBCUniversal’s settlement “suggests that employers and their lawyers are concluding that many unpaid internships in the private sector would violate minimum wage laws,” Yamada added. “A settlement of this size indicates that this employer saw the handwriting on the wall.”
Outten & Golden is seeking $1.18 million in legal fees, plus costs and expenses, in the NBCUniversal case.
The case is Eliastam et al v. NBCUniversal Media LLC, U.S. District Court, Southern District of New York, No. 13-04634.
Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy