There’s a fine line between exploitation and opportunity in the film industry. [UPDATED AGAIN!]


There has been a battle going on in Hollywood for a while now that threatens to upset one of the premises of the entire film industry. You might think it must be about digital disruption, but it’s not. Is it about 3D? No. Maybe it’s about lack of creativity in an industry swollen with sequels, prequels, and comic book heroes. Nope. Is it about Steven Spielberg’s prediction that a few mega-flops will likely destroy Hollywood? Nope.

It’s all about who will get coffee for the producers. The unpaid intern.

If you have a driving passion to break into the industry (and who doesn’t? You wouldn’t be reading my blog if you didn’t.), there are few ways to do it. The Number One best, most reliable, undeniably greatest way to break into Hollywood? Become an unpaid intern.

(It used to be “work in the mailroom at an agency,” but that’s no longer true. Who sends MAIL anymore??)

UPDATE FOR OCTOBER, 2013

News on Wednesday that Condé Nast was closing down its internship program. A spokeswoman for the company, whose publications include The New Yorker, Vanity Fair and Vogue, confirmed that the program would end, but said current interns would not be affected. From the New York Times article “Sued Over Pay, Condé Nast Ends Internship Program

UPDATES FOR THE FIRST WEEK OF JULY, 2013 (See even more updates at the end of this blog posting)

As I had warned in this blog posting, claims for wages will now proliferate in Hollywood. So, here is what’s happening now:

“Companies that failed to pay their interns at least minimum wage in the last six years, even many of the ones that offered college credit, now look vulnerable, attorneys say.” This quote is from Ad Age in their article “Media Companies: Who’s Vulnerable As Intern Lawsuits Snowball? Thousands of the Emboldened and Disgruntled are Potentially Eligible to Sue

and

The Hollywood Reporter’s Hollywood Esq. reports “Former MSNBC and ‘Saturday Night Live’ Interns Target NBCUniversal in Lawsuit: Class action suits seek unpaid wages for hundreds of interns who worked at the company in the past three years

The process has become so ingrained in Hollywood that many studios and production companies cannot even imagine functioning without unpaid interns, those eager students (well, they should be students) who show up in the production office to help it function and learn how it functions. From there, they are likely to become Creative Executives, Readers, even Producers as they climb up the ladder.

If the “unpaid” part sounds suspicious and ripe for exploitation, well … you’re right. It sounded like that to a few of the interns, and to the courts. A battle has been brewing, with advances and setbacks for everybody over the past year or so.

Tuesday was a major setback for Hollywood. The United States District Court of the Southern District of New York ruled that Fox Searchlight Pictures (the quasi-arthouse division of News Corp’s FOX) violated federal and state labor laws by classifying some of the plaintiffs as unpaid interns instead of paid employees. (Read the ruling here)

Does this sound familiar? It’s very similar to the recent determinations about mis-use of the concept of “Independent Contractor” for people who work on movies. By calling workers Independent Contractors instead of regular employees, production companies avoided taxes and benefits for those people (and many companies outside the film business also practiced this). The IRS and the States, especially California, recently cracked down hard on the practice. Today, any professional production company will put pretty much everybody on payroll instead of the old practice of trying to pass them all off as Independent Contractors.

What is going to happen in Hollywood now that the court has ruled that some unpaid interns were not, in fact, interns? Dana Brunetti, President of Kevin Spacey‘s production company TRIGGER STREET, (and who, by the way, just celebrated his 40th birthday — happy birthday, Dana!)) told me on Twitter Wednesday evening that they have already shut down their intern program, which had been very vibrant as an entry into the Hollywood film business.

Is internship dead?

The Hollywood Reporter Esq. – their reporting for legal issues – in “Interns Win Huge Victory in Labor Lawsuit Against Fox” points out there are acceptable guidelines for unpaid internships.

Federal Judge William Pauley said, “Considering the totality of the circumstances, Glatt and Footman were classified improperly as unpaid interns and are ’employees’ covered by the FLSA and NYLL. They worked as paid employees work, providing an immediate advantage to their employer and performed low-level tasks not requiring specialized training. The benefits they may have received — such as the knowledge of how a production or accounting office functions or references for future jobs — are the results of simply having worked as any other employee works, not of internships designed to be uniquely educational to the interns and of little utility to the employer. They received nothing approximating the education they would receive in an academic setting or vocational school. This is a far cry from [the Supreme Court’s decision in] Walling, where trainees impeded the regular business of the employer, worked only in their own interest and provided no advantage to the employer. Glatt and Footman do not fall within the narrow ‘trainee’ exception to the FLSA’s broad coverage.”

By the way, these guidelines are similar in construct to the type of labor law guidelines for acceptable determination of “Independent Contractor.”

Judge Pauley says Fox Searchlight violated the true value of unpaid internships and instead exploited free labor for their own advantage.

Shocked? It’s Hollywood, right? Well, Hollywood will shape up and do it right. They always do. The business can’t function without fresh blood, and it has no way of finding fresh blood for its very unique business without training them in-house.

Rebuilding the internship programs so that they are in line with federal regulations will be fairly easy for the industry.

The real problem, in my opinion, will be the damage done by having to go back and pay those interns who are now classified as having been regular employees. That will be an industry-wide headache of massive proportions. For that reason, I fully expect the MPAA studios to fight vigorously against this ruling. And, because of their resources, clout, and skill, I expect the MPAA to prevail.

Their goal will be to prevent back pay issues. I believe the criteria for legitimate unpaid interns will be implemented; there is no reason for the studios to gut the intent of the law. I believe that the Hollywood establishment may be arrogant and angry (it’s my opinion that good producers are always angry at other people — me, I’m always angry at myself, so that’s why I’m not a good producer – and I call this “the Scott Rudin Syndrome”), but when it’s not in their best interests to be exploitative, it’s easy to do the right thing. In fact, it’s possible that the arrogance and anger makes producers myopic about exploitation, and they can be easily moved from that position of exploitation eventually.

It will be fun to watch this issue unfold over the next many months as the MPAA and the Federal Court battle over unpaid interns.

And, yes, this will have an impact on the independent film industry. (That’s why you’re reading this blog, right?) However, the independent film industry is so weak and disorganized, it has no capacity to mount a fight on this issue, so we need to sit back and watch the MPAA do the dirty work that will benefit us.

Friends, it will all be okay in 2014. You’ll get your internship, which will lead to your fun job in various Hollywood production companies.

[UPDATES]

THE WRAP reports 6/23/13 in “Has Hollywood Ignited an Intern Uprising? Examining the Brewing Revolution” that “lawsuits by unpaid or underpaid interns against entertainment and media companies have accelerated to an epidemic pace in recent weeks following the success of interns who first sued Fox Searchlight two years ago.” The WRAP article provides information about lawsuits against Gawker, Warner Music Group Corp./Atlantic Recording Corp., Conde Nast, Fox Searchlight (“Black Swan”), Hearst and The Charlie Rose Show (PBS).

On 6/20/13: From Hollywood Reporter ESQ: “Hollywood Internships Under Fire After ‘Black Swan’ Ruling” The June 11 court decision puts a summer tradition under a microscope: Pay, or risk a lawsuit?

On 6/18/13: From Hollywood Reporter ESQ: “Warner Music Hit With Class Action Lawsuit Over Interns” Justin Henry says he sometimes worked more than 40 hours per week for no pay as an intern at Atlantic Records in 2007.

HOW do you use unpaid interns? Here is a primer on what’s acceptable, from FINDLAW: http://blogs.findlaw.com/free_enterprise/2013/06/unpaid-interns-may-cost-you-in-court.html

Also, here is an article about changes already being made at one publisher, again from FINDLAW: http://blogs.findlaw.com/free_enterprise/2012/03/might-be-time-to-rethink-unpaid-internships.html

The article reports that publisher Condé Nast has already issued seven new mandates for its unpaid internships:

  • Can’t stay at the company for more than one semester per calendar year, unless cleared by Human Resources.
  • Must complete an HR orientation about where to report mistreatment or unreasonably long hours.
  • Can only work until 7 p.m.
  • Must receive college credit for the internship.
  • Must be assigned to an official mentor.
  • Must only work on tasks related to their internship assignment; personal errands are not allowed.
  • Will be paid stipends of about $550 per semester.
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One thought on “There’s a fine line between exploitation and opportunity in the film industry. [UPDATED AGAIN!]

  1. Thank you! I am going to repost this in SydneysBuzz and give you credit, a byline and a link. Very interesting. Sydney Levine

    Please do us a favor and go to SydneysBuzz.com web page, go to her blog and click on Email Updates when you are on the blog and sign up (It’s free!!). You can also subscribe to SydneysSnapshots Monthly Newsletter (The 5 most read of SydneysBuzz, OthersBuzz and SydneysSnapshots).

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    From: “Michael R. Barnard’s Thoughts & Discussions. Filmmaking. Life.” <comment-reply@wordpress.com> Reply-To: “Michael R. Barnard’s Thoughts & Discussions. Filmmaking. Life.” <comment+2yw9-hdi_gmnolel1uyi-f@comment.wordpress.com> Date: Thursday, June 13, 2013 7:45 AM To: Sydney_Levine <sydney@sydneysbuzz.com> Subject: [New post] Theres a fine line between exploitation and opportunity in the film industry.

    MichaelRBarnard posted: “There has been a battle going on in Hollywood for a while now that threatens to upset one of the premises of the entire film industry. You might think it must be about digital disruption, but it’s not. Is it about 3D? No. Maybe it’s about lack of creativi”

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