Another seedy side of Hollywood is making an appearance in the mainstream media. Interns who worked on the film, Black Swan, have sued Fox Searchlight claiming they were employees entitled to wages under state and federal law. Other "interns" and lawyers are jumping on the bandwagon in an attempt to recover wages and fees, respectively.
The interns claim that they did not meet the test as interns under the Fair Labor Standards Act. I wrote about this in the blog a few months ago. Here's the link to that blog. http://californiahr.blogspot.com/2013/04/when-is-intern-really-intern.html
The interns claimed that they really did not receive training in an educational setting as is required to have a valid internship. Instead, these interns performed "grunt" work that would have been performed by employees if the interns were not present.
Fox Searchlight has countered with an intriguing defense. It claims that it was not the employer of the plaintiffs. As it turns out, when Hollywood makes a film it creates a separate company. In the case of Black Swan, a company called Lake of Tiers Inc. was created to hire the interns and other workers. Once the movie is produced, these companies, like Lake of Tiers Inc., cease operations. Importantly, these companies lack any assets from which a judgment could be obtained. Fox Searchlight claimed that this "production" company, not Fox, was the plaintiffs' employer.
The court recently issued a ruling rejecting the argument made by Fox. It found that Fox had unbridled discretion to fire interns, and supervised them closely. Under the law, the actions by Fox made it an employer subject to liability under the FLSA.
So how has this practice escaped scrutiny for so long? Probably because interns did not want to make waves and become blackballed in the industry. Fortunately, this lawsuit will put the spotlight on Fox Searchlight and other Hollywood companies. People should be paid an honest day's wage for an honest day's work. With the unbelievable compensation paid to many in the industry, there is no reason not to pay interns for performing services rendered.