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Madison Square Garden interns denied class certification in proposed FLSA collective action

By Lisa Milam-Perez, J.D.

Concluding that a proposed class of unpaid interns failed to meet their “low” burden of showing they were victims of a common policy or plan that violated the law, a federal court in New York refused to certify their putative collective action seeking pay based on their contention they were improperly classified as trainees rather than employees. The case at hand was different from the other crop of intern cases within the district that were certified despite “disparate factual and employment settings,” the court said (Fraticelli v MSG Holdings, LP, May 7, 2014, Furman, J).

The interns proposed a class of “all current and former interns engaged by MSG Holdings, L.P. and The Madison Square Garden Company, and all of their entities, subsidiaries, venues and affiliates” from September 2010 to the present. But while there was no dispute that all MSG interns were unpaid, that alone did not mean the defendant engaged in a “common policy or plan that violated the law,” the court observed. Whether MSG was legally required to pay its interns depended on whether they were considered “employees” under the FLSA or whether they properly fell under the “trainee” exception. The Second Circuit hasn’t yet addressed the standard governing the trainee exception, but the court cited the DOL’s six-factor criteria as relevant to — and possibly dispositive of — the question.

Disparate experiences. Looking at the facts at hand, the court noted MSG’s interns had been deployed in some 100 different departments and that their work experiences varied greatly from one department to the next — and in ways that were “highly relevant to the DOL factors.” The named plaintiff, for example, interned at the New York Rangers’ practice facility, where he prepared uniforms, tracked inventory, and set up the locker room, all with little supervision. Another plaintiff, by contrast, had an internship in MSG’s “future venue” department, where he observed architects working on ongoing projects, sat in on meetings with consultants and clients, and took field and design measurements and fittings. These examples showed there were significant differences that existed among the interns’ activities, level of supervision, training, benefits received from the internship, and burdens imposed on MSG.

Weak evidence. The court refused to credit the “unsupported and conclusory” assertions in the plaintiffs’ affidavits, including statements such as “If I had not performed the various tasks I was assigned, MSG would have had to hire a paid employee to do them,” or “’I know that MSG treated other interns in a manner similar to me based on my observations as well as discussion we often had amongst ourselves.” Also, while they contended that the defendant ran a “centralized internship program based in Penn Plaza,” the interns offered no evidence to support that claim. Rather, they presented only a code of conduct that governs all MSG employees (including interns), a standardized time sheet with the word “Intern” at the top, and a script that MSG distributed to interns instructing them on how to manage telephone calls.

Not like other suits. The weak evidence offered here distinguished the case from other intern suits where class certification was granted. In Glatt v Fox Searchlight Pictures, Inc, for example, Judge Pauley certified a class of interns based on testimony that the company’s various departments requested interns according to their productivity needs, and an internal memo stating that the unpaid intern program “more than doubled” due to the defendant’s elimination of paid internships and the scaling back of overtime pay and temp workers. And in O’Jeda v. Viacom, Inc, Judge Herman himself last month certified a collective action on the strength of far stronger evidence of a centralized internship program — including a 35-page internship guide; a memo mandating that interns complete an orientation program and work at least two days per week; and centralized web pages that provided general descriptions of the program.

As for Wang v Hearst Corp — the suit that launched the ensuing wave of intern class actions — Judge Baer certified the class based on evidence suggesting that the interns were “systematically used as substitutes for paid employees,” the court noted. And Baer remained steadfast in his decision on the employer’s motion for reconsideration, rejecting the contention that he had “overlooked” a Second Circuit holding that the district court must first decide the governing legal standard before determining whether conditional certification is appropriate. (Judge Furman here speculated that the court in Wang might in fact have applied the incorrect standard when it held that, for purposes of conditional certification, the plaintiff “need only establish that other employees ‘may be similarly situated’ to her.” At any rate, noting the split between the Glatt and Wang courts as to the proper standard to apply, Judge Pauley certified his ruling in Glatt for immediate appeal — leaving the matter now in the circuit court’s hands.)

Because the plaintiffs here were unable to make a similar “modest factual showing” of a common, unlawful policy or plan to which all the putative class members were subjected, their motion for conditional certification was denied.