The Charlie Rose Case: The Collision of Laws and Common (Economic) Sense

A former intern for The Charlie Rose Show is suing the show for lost wages, alleging that classifying her as an intern rather than an employee was a violation of New York state law. According to the New York Daily News piece linked to above, the law in question prohibits classifying someone as an unpaid intern unless they are being "trained." The alternative would be that they are performing the type of work paid employees would do and should therefore receive remuneration for their efforts. The former intern, Lucy Bickerton, is claiming that, as the show couldn't go on without the efforts of at least 10 unpaid interns at any given time, such individuals are the equivalent of employees. If the court agrees, Ms. Bickerton will be owed at least minimum wages for the 25 hours per week she worked from June to August 2007.

While there is some analysis that could be done on the case (something I just can't avoid doing to a minor extent below), for our purposes it is much more interesting to take a look at the implications of the law itself. On one hand, some would argue that labor laws have helped our country become safer and more civilized. While they would be correct, it is also clear that this isn't the type of situation where such safeguards are required. Indeed, particularly in the case of internships, supply and demand dictates that many people, with an eye to the future, end up being more than satisfied with unpaid positions.

Of course, a considerate reader might note, supply and demand cannot be the only arbiter of fairness when it comes to labor conditions. After all, I think many of our readers (though maybe not all) might agree that sweatshops, for example, are not morally right, despite being a fine example of supply and demand forces 'working.' However, even the most pro-worker rights individuals among those reading this post have to concede that interning for The Charlie Rose Show is not akin to child labor, sweatshop labor, or any of the other conditions that the New York State is presumably attempting to guard against with its labor laws.

Indeed, one could argue (as I sure the defendants will) that they weren't even in violation of the law itself, as it could be stated that this is a case where interns were being "trained." As she is currently a documentary filmmaker, Bickerton will know well that most of the business in the production field occurs far from the glitz and glamour of the red carpet. Filmmaking is hard work, and "researching for the host, putting press packets together, escorting the guests and cleaning up..." are all likely well within the realm of the types of activities she is undertaking in her current role as a documentary filmmaker.

However, legal argument aside, there is, as noted above, a compelling economic argument playing against the New York law. Though such reasoning wouldn't hold up in most courts, this blog is a realm of thought, not a courtroom. Therefore, for our purposes, it could be argued that the law itself is wrong as it plays against very simple supply/demand forces. Particularly in times when companies, firms and government offices are freezing employment and even cutting headcount (really the 'new normal' of the past few years), it is tough to justify hiring inexperienced students who often have nothing more in their skill-set to offer than ambition and a desire to impress. However, bringing unpaid students on board can be justified.

In response to such offers, the almost universal refrain among individuals who accept is 'I would rather have some valid work experience on my resume than a paid position at the local pizza place.' Truly ambitious students may, of course, do both jobs, the one for the resume and one other for spending money. In any case, there are very clearly students who are willing to do internships for free. Bickerton herself was presumably very happy with her experience until she discovered that she might be able to receive back pay. Similar arrangements occur at every level of the higher-educational system, and it is almost a rite of passage for some individuals. There are simply not enough paying jobs in particular fields for everyone who wants one, and for many, the value of gaining experience outweighs the value of free time.

If a liberal view of 'performing in place of employees' is taken by the court in this case, the precendential repurcussions could be disastrous for such students. Rather than converting currently unpaid internships to short-term employee positions, employers are far more likely to allow the positions to be phased-out entirely. Students would lose the opportunity to gain valuable experience in positions which could help them in their careers.

To the extent that a society does want to protect disadvantaged workers, there are better ways to do so than cast a net which catches up willing and able upaid students who are merely trying to get ahead. If the issue of what Ms. Bickerton did was 'training' or 'employee work,' gets to a trier of fact, I hope for the sake of students everywhere that the court finds emphatically that it is the former. And, if the court finds that the letter of the law leads to the latter categorization, I hope that the New York legislature will take this issue on in an appropriate way. Otherwise, New York might soon find that it has a much bigger labor problem on its hands than whether or not someone is owed a few hundred hours of minimum wages.


  1. There is also the argument that some students are much more able to afford working as an unpaid intern than others are.

    Would the negative impact of a required minimum wage for interns on the entire intern pool be greater than its positive impact on capable students who, for one reason or another, would have been unable to accept an unpaid position?

  2. Hi Mike,

    Thanks for the comment.

    While some students might not be able to afford an unpaid internship as a standalone, I also noted that many students will accept a side job as well. I am actually a case in point of this.

    I also agree that your question is really the crux of the issue. In answer, I do think that a hard minimum wage rule would eliminate many current positions which students clearly see as valuable (otherwise they wouldn't currently be filled) and that this would be more greatly negative than a wage floor would be positive.

    I haven't seen this modelled out, but I have personal experience with working side jobs during an internship and have benefited from unpaid positions. Maybe this is leading to a bit of bias, but I know that unpaid internships during both undergraduate and graduate schools led to better opportunities than I would have had otherwise.


  3. Anonymous18/3/12 20:36

    I would add that many, many employers are in blatant violation of U.S. labor laws. The rules for interns not only require training, but the implementing regulations (and Supreme Court cases interpreting them) require that the "employer" (not really an employer at all, since it pays no wages) not receive a net benefit from the interns. In other words, interns are supposed to be learning, and any labor they contribute must be outweighed by the cost of providing their training. Otherwise, the employer is benefiting from their labor and thus must pay them wages.

    The exception from the minimum wage laws for interns is meant to permit employers to provide training solely for the benefit of the interns. It is not meant (but is widely used) to allow employers to receive free labor in exchange for boosting a resume. The Obama administration issued warnings to employers that enforcement of this law would be stepped up back in 2009.

    The state and federal government, however, are immune. Municipal government, as sub-divisions of the state government, are also immune. And nonprofits can accept volunteer aid if it is a traditional form of volunteer labor and does not replace a paid position. So there are a plethora of opportunities to volunteer for either the government or nonprofits in order to build experience. I, too, have taken the route of low-paying jobs to pay the bills and no-paying nonprofit work to build experience.