About Us  |  About Cheetah®  |  Contact Us

$7.2M deal would end interns’ unpaid wage suit against Viacom

By Pamela Wolf, J.D.

Viacom has reached a proposed $7.2 million deal to settle wage claims on behalf of interns who were either unpaid or paid less than minimum wage, allegedly in violation of the FLSA and California and New York labor and wage laws. The parties spent most of nine months carving out an agreeable outcome, according to a memorandum in support of the proposed settlement that is before the court for preliminary approval.

If the court approves the deal, proceeds from the settlement fund (less employer payroll taxes, attorneys’ fees and costs, administration fees and costs, and service awards) will be distributed to interns with Viacom in New York from August 13, 2007, through June 1, 2013; interns with Viacom in California from September 11, 2010, through June 1, 2013; and interns at any Viacom location nationwide from January 1, 2012, through June 1, 2013.

During the nine months that the parties worked toward resolution of the claims, counsel for Viacom and Black Entertainment Television deposed the two named plaintiffs and two opt-in plaintiffs in New York and California, and Viacom produced data and other information for the proposed class in response to discovery demands, the plaintiffs said. In addition, counsel for the interns conducted interviews with putative class and collective members, and attorneys for both parties participated in multiple in-person and telephonic settlement conferences, all of which resulted in the proposed agreement that has been presented to the court.

Settlement terms. The proposed agreement provides for a gross settlement amount of $7,212,500. From that sum it is anticipated that professional fees and costs of not more than $900,000 will be deducted, as well as service awards of $5,000 each for the named plaintiffs, and $2,500 and $1,500, respectively, for each of two collective members who rendered services on behalf of the class. PAGA penalties will also be deducted from the gross settlement amount.

The defendants have the right to terminate the settlement agreement, however, if the number of number of participating claims exceeds 2,480.

Benefit to interns. Under the agreement, assuming it’s not terminated, each claimant would receive a gross settlement amount of $505 for each traditional academic semester in which he or she was an intern with the defendants. However, none of the claimants will receive payment for more than two than two traditional academic semesters ($1,010), regardless of the number of academic semesters in which the claimant interned with the defendants. Moreover, to receive payment for a second traditional academic semester, the claimant must have interned for at least three weeks during that second semester.

Class certification could be problematic. In support of the appropriateness of the settlement, the plaintiffs pointed out, among other things, that the defendants would “most likely oppose the plaintiffs’ application for Rule 23 class certification of the New York Labor Law and California Labor Law claims on the grounds that plaintiffs’ internships were in numerous different departments and offices within Viacom, supervised by a variety of different Viacom employees, and subject to a number of guidelines and expectations that varied by location, department and time.” Even if the plaintiffs prevailed on a Rule 23 motion, the defendants would likely appeal. “Settlement eliminates the risk and delay inherent in this process,” the plaintiffs told the court.

The plaintiffs filed their lawsuit, Ojeda v. Viacom Inc., in the Southern District of New York.