There was an interesting decision rendered in June, regarding some wage claims filed by film industry "interns." Essentially, the Federal Court concluded that these interns were in fact employees and ordered that they should have been paid just as other employees are paid. The story caught my attention because many government agencies allow students to intern, including the OJCC. It is not an uncommon practice, according to an article in the New York Times, "experts estimate that undergraduates work in more than one million internships a year, an estimated half of which are unpaid."

When the OJCC has interns, they are usually engaged in an academic program, and are usually receiving law school or college credit for their internship work. The interns have done things like shadowing a mediator(s) to see that process, attend hearings, perform legal research, and draft memoranda. It has been a loosely structured relationship. Under the recent ruling, those using unpaid interns will likely be more specific about duties.

It can be difficult as a law student to gain experience in the best of economies. I knew many in my law school class that "volunteered" to gain experience, and the hoped-for recommendation letter. After reading the Court's ruling, I am not certain that kind of opportunity is over, but I am convinced that there are some important rules to keep in mind in the "internship" process.

The Federal Judge rejected the arguments for a "primary benefit test," which would have allowed unpaid internships if the "internship’s benefits to the intern outweigh the benefits to the engaging entity.” The Judge held that the efforts of any unpaid internship" should not be to the immediate advantage of the employer."  In other words, the benefit of an unpaid internship should be to the intern. The Court also rejected the notion that this requirement is satisfied simply because the intern receives academic credit for the internship.

The judge focused, in this case, upon the primary benefit. He noted that the interns did receive benefits from their service, but noted that the benefits were ancillary to their work, and were similar benefits as enjoyed by employees, such as learning the business, gaining resume references, and gaining experience. The Judge found it relevant that interns were performing the same or similar duties as paid employees. In other words, the presence of the interns resulted in less need for paid employees to perform those  same duties. In that regard, the primary benefit of the interns' presence was that the employer could function with less paid employees.

This ruling will likely mean the end of interns as substitutes for regular employees. I am hopeful that it does not mean the end of interns who gain valuable experience in models such as the OJCC has used. There is no tangible benefit to the OJCC when an intern attends trials and mediations. There is no tangible benefit when an intern researches a point of law or writes a memo, because the judge will perform her or his own research in all cases anyway, in addition to reading the intern's memo. If anything, the presence of an intern requires the investment of more time by the Judge and OJCC Staff.

The presence of interns is rewarding. Affording someone a chance to better understand our process, and the practice generally is a great service to the student. This recent ruling reinforces, that it is this benefit to the intern that should control the process. It seems to me a simple question, is the OJCC or other internship provider receiving a tangible benefit? If the answer is no, then the internship is probably acceptable. If the experience for the intern is similar to vocational training, then the internship is more likely to be acceptable. It also appears important that interns not perform functions that would otherwise be performed by paid staff. And, if the student is receiving academic credit that is all the better, though not dispositive.

The marketplace will change. Those who afford internships truly for the benefit of the student will likely continue. Internships afforded to replace the need for paid employees will likely not be offered any longer. It will be interesting to see how many of the estimated one half million annual unpaid internships will disappear from the marketplace following this decision.