WASHINGTON (AP) — Unpaid internships have long been a path of opportunity for students and recent grads looking to get a foot in the door in the entertainment, publishing and other prominent industries, even if it takes a generous subsidy from Mom and Dad.

But those days of working for free could be numbered after a federal judge in New York ruled this week that Fox Searchlight Pictures violated minimum wage and overtime laws by not paying interns who worked on production of the 2010 movie "Black Swan."

The decision by U.S. District Judge William H. Pauley III may lead some companies to rethink whether it's worth the legal risk to hire interns to work without pay. For many young people struggling to find jobs in a tough economy, unpaid internships have become a rite of passage essential for padding resumes and gaining practical experience.

"I'm sure this is causing a lot of discussions to be held in human resource offices and internship programs across the country," said David Yamada, professor of law at Suffolk University in Boston.

There are up to 1 million unpaid internships offered in the United States every year, said Ross Eisenbrey, vice president of the Economic Policy Institute, a liberal-leaning think tank. He said the number of internships has grown as the economy tumbled and he blamed them for exploiting young workers and driving down wages.

"The return on a college investment has fallen, students are facing higher and higher debt burdens, and the reaction of employers is to make matters worse for them by hiring more and more people without paying them," Eisenbrey said.

In the ruling, Pauley said Fox should have paid the two interns who filed the lawsuit because they did the same work as regular employees, provided value to the company and performed low-level tasks that didn't require any specialized training.

The interns, Eric Glatt and Alexander Footman, performed basic administrative work such as organizing filing cabinets, tracking purchase orders, making copies, drafting cover letters and running errands.

"Undoubtedly Mr. Glatt and Mr. Footman received some benefits from their internships, such as resume listings, job references and an understanding of how a production office works," Pauley wrote. "But those benefits were incidental to working in the office like any other employees and were not the result of internships intentionally structured to benefit them."

Chris Petrikin, a spokesman for 20th Century Fox, said the company believes the ruling was erroneous and plans to appeal. Fox had argued that the interns received a greater benefit than the company in the form of job references, resume listings and experience working at a production office.

Juno Turner, an attorney for the plaintiffs, said it was the first time a court had given employee status to young people doing the types of duties commonly associated with interns. The case is one of several that have been filed in recent years demanding that all interns deserve a salary.

"This is an incredibly important decision as far as establishing that interns have the same wage and hour rights as other employees," Turner said. "You can't just call something an internship and expect not to pay people when the interns are providing a direct benefit to the company."

In ruling for the interns, the judge followed a six-part test outlined by the Labor Department for determining whether an internship can be unpaid. Under the test, the internship must be similar to an educational environment, run primarily for the benefit of the intern as opposed to the employer, and the intern's work should not replace that of regular employees.

Glatt, the lead plaintiff, lamented the fact that unpaid internships have become so normal "people do it without blinking an eye."

"It's just become a form of institutionalized wage theft," he said Wednesday in a conference call with reporters. Glatt has an MBA from Case Western Reserve University and said he is currently studying law at Georgetown University Law Center.

Another prominent lawsuit is challenging unpaid internships at Hearst Magazines. Last month, a federal judge in New York declined to let the interns pursue their case against Hearst as a class action.

Camille Olson, an attorney who represents employers in workplace litigation, said the Fox decision was just one judge's opinion that may be overturned on appeal. But she said many employers are now "taking a harder look at the issue."

"There's a lot more interest in making sure intern programs are structured correctly or, if an employer doesn't want to have any risk, then paying minimum wage," Olson said.

She said many employers believe they don't need to pay interns because they offer counseling and mentoring similar to what a teacher might offer in a vocational program.

"They view themselves as actually spending a lot of resources on these programs," Olson said.

But Yamada, the law professor, said the growth of unpaid internships unfairly leaves out students and graduates from lower economic levels who can't afford to work for free.

"If you're a college kid that has to make some money over the summer, maybe you go work for a food store instead of applying for that fancy internship in the entertainment or arts industry," he said. There's nothing wrong with a tryout program that lets them scout out the talent, but they should at least pay minimum wage."

Non-Compete Agreements Can Shackle Your Options in Florida

ST. PETERSBURG — One of St. Petersburg's most celebrated, and controversial, chefs is not cooking in a restaurant today. Or any time soon.

Domenica Macchia — formerly of Redwoods, MJ's, Diner 437, BellaBrava and Shackleton's Folly, all in St. Petersburg — has been hit with a temporary injunction over a noncompete contract she signed with her former employer. That means this itinerant local chef is legally forbidden to ply her trade in any Pinellas County restaurant, in any capacity, until February 2014, according to her lawyer, Francis M. King.

Some restaurant industry analysts estimate that chefs change jobs every 12 to 24 months, which is why it was perhaps unwise for Macchia to have signed such an agreement with Three Birds Tavern when she began working there in March 2011. Macchia and Three Birds had an acrimonious parting (not the first for Macchia) toward the end of 2012, and in January Three Birds' owners Robin and Jack King filed a lawsuit against her in Pinellas County for breach of contract.

In addition, the Kings filed a suit against Dan Soronen. Formerly the owner of the Old Northeast Tavern, Shackleton's Folly and Brewburgers, all in St. Petersburg, Soronen took over management of Beak's Old Florida along with new owner Jason McNeil, renaming the bar/restaurant at 2451 Central Ave. Beak's St. Pete and bringing on chef Macchia. Despite having had a falling out while working together at Shackleton's Folly, Soronen was eager to have Macchia "revamp the whole menu."

On Tuesday, a new menu was unveiled. And, on Thursday, Macchia received news about the injunction.

Why would a seasoned chef sign such an agreement?

"I signed a contract because I had been out of work for 10 months, my lights were going out in seven days," explains Macchia. "I never read it."

Whether this was wise is clearly moot, but it does raise questions about intellectual property and trade secrets in the restaurant business.

Macchia has made a name for herself with signature items such as a bacon brittle with seared scallops that she developed at MJ's and a bacon onion jam she invented at Diner 437 (she likes bacon). She has brought those with her in subsequent ventures, but neither appears on Beak's new menu. Are there menu items on Beak's new menu that reprise, or plagiarize, menu items from Three Birds' menu? No.

McNeil, who has put Macchia on administrative leave at Beak's with pay, thinks the suit is frivolous.

"My gut is it's a simple case of bullying, a case of who has the most money wins. I don't think that Beak's competes with them in any way. It's a totally different environment and atmosphere."

A not-yet-scheduled meeting with a judge will determine the permanent ruling in this case. The Kings could not be reached Friday for comment, but opinions about the suit have come from other arenas as well. Jonathan Pollard, a trial lawyer and litigator in Fort Lauderdale, took up the issue on his blog, TheNonCompeteBlog.com.

"At least in Florida, an agreement not to compete falls in the same category of illegal contract or conspiracy unless it is necessary to protect a legitimate business interest," he writes. "The question, then, is whether or not a non-compete agreement is necessary to protect a restaurant when a prominent chef jumps ship and goes to work for another restaurant across town. There are no trade secrets at issue. There is no confidential information. There are no unique customer relationships, because restaurant patrons frequent many different restaurants."

At least one customer agrees. Annette Baesel, a St. Petersburg resident and retired environmental planner, has followed Macchia's career in St. Petersburg restaurants.

"This isn't like Le Bernardin, like they've invested years in a chef. That's not the food scene in St. Petersburg. It doesn't make any sense. No one eats at the same restaurant every night of the week. We eat out four to five times a week, almost always in St. Petersburg. What (the Kings) are doing is denying me the pleasure of going somewhere that she cooks just because they got their knickers in a twist."

Florida lawmakers consider wage theft bill

Businesses and workers-rights advocates are fighting over a bill that would set uniform state standards for employees who say they haven't been paid their full wages to seek compensation.

The bill would require workers to file a claim through the courts and would limit damages to the amount they are owed, with no clause of punitive damages. It also would preclude cities and counties from enacting their own systems, with an exception for Miami-Dade County, which would be allowed to keep most of the system it enacted in 2010.

Florida is one of the few states without a labor department, which is where most wage disputes are settled elsewhere.

The Florida Retail Federation says a consistent statewide system is necessary. The federation, which represents over 7,000 businesses, challenged Miami-Dade's ordinance in the courts but lost. Samantha Padgett, general counsel for the federation, rejected critics' assertion that the bill would make recovering lost wages more difficult.

"The small claims court system is designed for people to be able to navigate without legal representation," she said.

Opponents say the bill would make claiming unpaid wages costly and cumbersome. Many workers at low-paid jobs live paycheck to paycheck and cannot afford an attorney nor take time away from work to be in court, they say.

Jeanette Smith, executive director of the South Florida Interfaith Worker Justice organization, said the bill would give employers an incentive to engage in wage theft, as it provides no real penalty for employers beyond paying back wages.

Workers "go through all this, and they cannot even get damages," Smith said. She cited hospitality, construction, security and agriculture as some of the fields with the highest rates of wage theft.

Broward County Mayor Kristin Jacobs told a recent hearing that wage theft "is a huge problem" in her county. "There are companies where not paying workers has become their business model," she said. "I call them pirates."

Jacobs said that if a provision is going to be carved out for Miami-Dade, Broward should get one, too.

The bill has been filed by Representative Tom Goodson, R-Titusville, who has filed similar pre-emption bills over the past three years, though this is the first to outline a compensatory procedure for wage theft claims. Goodson did not respond to repeated requests for comment.

The bill requires that workers first notify employers that they intend to file a civil action and specify the amount owed and the dates and hours worked. The employer would then have 15 days to pay or otherwise resolve the complaint. The claim must be filed within one year of the date the work was performed, and workers must prove wage theft "by a preponderance of evidence" — the facts would have to show that the theft was more likely to have happened than not.

"That's not an overwhelming burden to overcome," Padgett said.

While Miami-Dade's ordinance would be allowed to remain in effect for smaller companies, it would not apply to any company with an annual gross volume of sales or business of more than $500,000. Those would fall under the state law.

Under Miami-Dade's regulations, an employee can file a claim through the county Small Business Development's Wage Theft Unit, which then contacts the employer to mediate a resolution. If a settlement can't be reached, the employer is sent a complaint and a hearing is scheduled. So far almost $600,000 for 471 workers has been recovered through mediation, and another $1 million to 411 through an administrative hearing process, according to South Florida Interfaith Worker Justice.

Rep. Jose Javier Rodriguez, D-Miami, said most people who have used Miami-Dade's process don't have other recourse and cannot afford a lawyer.

"There are other counties considering following Miami-Dade's lead," he said. "I don't think that's good policy to exclude Miami-Dade only."

Rodriguez said Goodson's bill "goes way beyond pre-emption. This really is aimed at rolling back existing rights that employees have."

An analysis by the National Employment Law Project, a New York-based advocate for workers, said the bill would penalize employees for company failure to keep accurate records.

The group concluded that the bill "would severely impact the rights of low-wage workers and their families and local economies that rely on these wages to stay afloat."

The Associated Press

2013-03-27 12:00:00 AM

American Legislative Exchange Council is the DEVIL

GOP state lawmakers aim to kill local sick-time measures

The brutal political fight over mandatory sick time for workers in Orange County is about to move to Tallahassee, as two Central Florida lawmakers want to block locally driven efforts supporting the idea.

Sen. David Simmons, R-Altamonte Springs, and Rep. Steve Precourt, R-Orlando, say the proposed sick-time measures now being considered in Orange and Miami-Dade counties could put those counties at a competitive economic disadvantage. They argue that such policies should not be adopted patchwork-style across Florida.

"The discrimination that would occur to employers only in Orange County is so significant, we would need to have a statewide solution to this issue," Simmons said.

That could undo the efforts of Citizens for a Greater Orange County, a progressive coalition that secured more than 50,000 voter signatures to get the sick-time measure on the Nov. 6 ballot in Orlando. However, Orange County commissioners on Sept. 11 voted to delay the referendum.

If approved, the measure would require businesses with 15 or more workers to provide paid sick leave for their workers. A host of business leaders oppose the idea, saying it would be expensive and "kill" jobs.

A court battle over the referendum, as well as a separate legal fight over a raft of text messages related to the commission's delay vote, are both still pending.

None of that might matter if Simmons and Precourt are successful in creating legislation blocking local efforts.

In Wisconsin, Milwaukee voters overwhelmingly backed a similar measure in 2008. It survived legal challenges only to see Republican lawmakers and Gov. Scott Walker pre-empt it with a statewide law in 2011.

In Orange, Citizens leaders say the Central Florida lawmakers pushing pre-emption are ditching their professed beliefs in local control and suppressing local voting rights in order to protect the profits of restaurants and tourism interests.

"It's no surprise that [Simmons and Precourt,] ... who have voted 100 percent with [Gov.] Rick Scott against middle-class Floridians, would go out of their way to deny more than 50,000 Orange County citizens the right to vote for an issue they petitioned their government" for, Citizens leader Stephanie Porta said. "They are flacks for big-business special interests."

Supporters say the sick-time measure would provide economic stability for ailing workers or those who risk being fired to care for a child. For businesses, it would curb job turnover and health-care costs, they say.

Opponents say sick-time measures are well-intentioned but would cause bureaucratic headaches and hurt businesses still reeling in the tough economy. And passing a variety of sick-time measures across the state would be even more unwieldy, they say.

"Many variables come into play that could be extremely burdensome on business," a briefing from the Florida Restaurant & Lodging Association said. "If a business has locations in 30 counties in Florida, they could have 30 different [paid-sick-leave] rules to follow."


Porta said companies could avoid that by adopting statewide sick-time protections. She said large businesses already navigate differing regulations from county to county.

In interviews, neither Simmons nor Precourt expressed interest in adopting a statewide sick-time standard, although both said they were willing to listen to all sides in the debate.

However, Simmons said a statewide sick-time standard "would be a heavy lift."

In Orange, Walt Disney World, Darden Restaurants and Mears Transportation all lobbied to kill the sick-time measure. A coalition of business groups also legally challenged the ballot language as misleading.

Orange County GOP Chairman Lew Oliver worked behind the scenes to delay the local referendum. In a newly released text message, he argued that a delay in Orange was necessary so the "Legislature can deliver the kill shot."

Those text records also show Precourt texted county leaders, including Orange County Mayor Teresa Jacobs, on Sept. 11, just before four other county leaders voted to delay the measure. At the time, Jacobs did not know who sent the text. He wrote: "Just letting you know I'm here to support you folks as necessary."

In an interview, Oliver said ballot referendums that allow slim majorities to create new benefits for themselves are "borderline evil" and in Orange would drive away new and existing businesses.

"I don't think the economy can absorb it," Oliver said.

January 6, 2013|By David Damron, Orlando Sentinel