ICM Settlement with Interns Has California Labor Law Underpinnings

New York, NYThere were a number of stories that dominated the California labor law portfolio over the course of this past year, not the least of which was the implementation of new laws supporting overtime and other labor statutes heretofore not available to in-home and personal service workers. Other laws inject a level of liability for primary contractors when subcontractors fail to pay their workers properly.

However, another sector that has been percolating in California and many other jurisdictions in 2014 has been the unpaid intern. Various lawsuits alleging affronts to individuals serving as interns have been brought against major corporations such as Calvin Klein Inc., Lions Gate Entertainment Corp., Gucci America Inc. and Sirius XM Radio Inc.

In October, NBC Universal Inc. agreed to a settlement resolving a putative class-action lawsuit filed by former interns of MSNBC and Saturday Night Live. The interns were allegedly not compensated for their work. Their position was that they should have been. The settlement was announced as being worth $6.4 million.

A California labor lawsuit filed in New York but with underpinnings in the Golden State through the involvement of a California-based co-plaintiff alleging non-payment of minimum wages has just settled. Terms were not disclosed.

The defendant, International Creative Management Partners LLC (ICM), is alleged to have violated various aspects of the Fair Labor Standards Act (FLSA) and other statutes associated with the California labor code. ICM is promoted as one of the world’s largest talent and literary agencies with offices in London, Los Angeles and New York.

The lead plaintiff in the case, Kimberly Behzadi, filed the lawsuit alone in June of this year, but amended the complaint to add the co-plaintiff, a California man who had served as an ICM internship in the Los Angeles office. There were also additional claims under California and labor law that were tacked onto the initial complaint when it was amended in August.

The plaintiffs also attempted to have the complaint certified as a class action. ICM, for its part, attempted to have the lawsuit tossed out of court. In the end, the two parties settled via arbitration.

Interns have been in the news during the last year concerning work they perform on behalf of a company while learning their trade on the job. While interns are grateful for the valuable job experience, they also feel increasingly taken advantage of by a mandate to perform entry-level work for little or no compensation whatsoever. In so doing, interns have been serving as a cost-savings vehicle for various enterprises and corporations.

Both plaintiffs in the New York and California labor lawsuit were unpaid interns responsible for undertaking entry-level tasks, such as reading and summarizing scripts, running errands and making photocopies, and to pare down the company’s labor costs, the plaintiffs alleged.

Amongst the arguments made by ICM in attempting to have the lawsuit dismissed were an insistence that the co-plaintiff’s claim under FLSA was time-barred, and that the New York court should not have jurisdiction for claims under California labor employment law brought by the co-plaintiff.

In the end, the two parties settled for an undisclosed sum in what was described as a “comprehensive settlement agreement.” The case is Behzadi v. International Creative Management Partners LLC, Case No. 1:14-cv-04382, in the US District Court for the Southern District of New York. The case also contained claims brought by the co-plaintiff under California state labor laws.