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NBCUniversal to settle suit by former interns for $6.4 million

NBCUniversal reaches a tentative $6.4-million settlement with former interns

NBCUniversal and a group of former interns have agreed to settle a class-action lawsuit contending the interns should have been paid for their work.

The $6.4-million settlement, subject to court approval, would be shared by thousands of interns, including some who worked at "Saturday Night Live."

The lawsuit is among several that have roiled the entertainment industry in New York and Los Angeles, where unpaid internships have long been a cost-saver for television networks, movie studios, production companies and music labels — and a foot in the door for Hollywood hopefuls.

The settlement would be the largest yet among several cases filed by interns against entertainment companies. Last year, for example, talk show host Charlie Rose and his production company paid about $110,000 to settle a lawsuit brought by former unpaid interns, with part of the proceeds going to the interns as back pay.

However, attorney Cheryl Orr, chairwoman of Drinker Biddle & Reath's national labor and employment practice, said in an email that she "would not put too much stock in the 'precedent' created by" the NBCUniversal settlement.

"There may (or may not) have been other business factors impacting the outcome," she said. "Certainly these cases will continue to be hard-fought."

NBCUniversal declined to comment.

A wave of internship lawsuits was touched off in 2011, when former unpaid interns on the film "Black Swan" filed suit against Fox Searchlight Pictures, alleging that the company violated the Fair Labor Standards Act, which mandates that unpaid internships benefit the interns, not the employers, among other criteria.

The Fox case was followed by lawsuits from unpaid interns at Warner Music Group and Atlantic Records and publishing houses Conde Nast and Hearst Corp.

Eric Glatt, a lead plaintiff in the Fox lawsuit, said the settlement in the NBCUniversal matter indicates that the other legal proceedings "have merit and are on very solid ground."

"I think that sends a very clear message to other media companies — and any large employer who has taken advantage of unpaid intern labor — that they should take this issue very, very seriously," he said.

The original complaint filed against NBCUniversal involved New York interns Jesse Moore and Monet Eliastam, and grew to include plaintiffs from other states. The interns asserted that the work they did paid them "no compensation or compensation at a rate less than the applicable minimum wage law," and that they were doing work for which wages were appropriate.

The plaintiffs and their attorneys had contended that the internships involved doing work that would ordinarily be done by paid workers, and accused the company of "improperly classifying them as non-employee interns exempt from federal and state minimum wage ... requirements."

Lawyers for the plaintiffs said Comcast-owned NBCUniversal has agreed to special bonuses for the litigants who led the class-action lawsuit, which was filed in July 2013. According to documents filed with New York's Southern District Court on Wednesday, a handful of plaintiffs would receive $2,000 to $10,000 each. Other unpaid interns who qualify to be included in the settlement would see far less — $505 on average, according to the legal filings.

Show business internships can seem glamorous — they might involve assisting a filmmaker on the set of a movie production — but typically require the intern to make coffee, photocopy documents, run errands or make travel arrangements for company principals.

Ross Perlin, author of the 2012 book "Intern Nation," has estimated there are 500,000 unpaid interns nationwide (based on census data and private research) and says the practice saves companies about $2 billion annually in labor costs.

"Unpaid internships right now are a huge giveaway for employers, worth billions — that should come back to young people," Perlin told The Times this year.

Plaintiffs in the Fox case contend that minimum wage laws were violated during the making of "Black Swan" and are seeking back pay and damages for themselves and an unspecified number of other interns who worked at Searchlight and other units of parent company Fox Entertainment Group.

Attorneys for Fox Searchlight have argued that an independent company — not the studio — hired and managed the "Black Swan" interns.

Last year, U.S. District Judge William Pauley in New York rejected that argument and concluded that "Searchlight received the benefits of [the interns'] unpaid work, which otherwise would have required paid employees."

Fox appealed Pauley's ruling, contending that interns are not employees subject to wage protection if they, not the employer, are the "primary beneficiaries" of the internships.

A ruling by the U.S. 2nd Circuit Court of Appeals in New York is expected in the case next year.

Follow me on Twitter: @DanielNMiller

Times staff writer Charles Fleming contributed to this report.

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