Mary-Kate & Ashley Olsen Settle Lawsuit With Former Unpaid Interns

Photo: Dimitrios Kambouris/Getty Images.
Update: A 2015 wage theft lawsuit filed by former interns against Mary-Kate and Ashley Olsen's Dualstar Entertainment, which owns The Row, was settled in the Manhattan Federal Court, the New York Daily News reports. The Olsen twins were ordered to pay a total of $140,000 to compensate 185 interns and cover legal fees. Each former unpaid employee is expected to receive $530, pending the judge's approval, according to court documents.
This story was originally published on August 11, 2015.
Update, 5:00 p.m.: A representative from Dualstar Entertainment Groyp, LLC, the private company owned by Mary-Kate and Ashley Olsen, released a statement to USA Today in response to the lawsuit brought against the company by former and present interns: "As an initial matter, Dualstar is an organization that is committed to treating all individuals fairly and in accordance with all applicable laws. The allegations in the complaint filed against Dualstar are groundless, and Dualstar will vigorously defend itself against plaintiff's claims in court, not before the media. Dualstar is confident that once the true facts of this case are revealed, the lawsuit will be dismissed in its entirety." Original story, 2:30 p.m.: Mary-Kate and Ashley Olsen have run into some legal troubles: the twin's company Dualstar Entertainment Group, which includes their critically adored luxury brand, The Row, has been hit with a class-action lawsuit by approximately 40 past and present interns, Page Six reports. The suit, filed in Manhattan Supreme Court, claims the company did not pay its interns and subjected them to excessive amounts of work and unfairly long hours.
A former design intern, Parsons grad Shahista Lalani, is named the lead plaintiff in the case, and she alleges her five-month interning stint in 2012 at The Row involved 50-hour workweeks. In an interview with Page Six, Lalani said she handled the workload of three interns, and the strenuous experience necessitated a hospital visit for dehydration. She also claimed she was responsible for fielding late-night emails and completing tedious tasks (i.e., color-coordinating a bunch of buttons) during any downtime for not-so-nice bosses: "They’re kind of mean to you. Other interns have cried. I’d see a lot of kids crying doing coffee runs, photocopying stuff," Lalani said.
The past few years have seen a rash of class-action lawsuits filed by interns. A suit filed against Condé Nast in 2013 involving 7,500 former interns prompted the glossy conglomerate to end its internship program. The suit was settled in November 2014 for $5.8 million, or $700 to $1,900 per ex-intern.
The spate of internship lawsuits in recent years is likely the result of the Labor Department's 2010 updates to its guidelines for unpaid interns at for-profit enterprises. The guidelines include six points, all of which must be met in order for an free internship to be legal; the directives' main focus being that the internship benefit the intern and not the company. Susan Gross Sholinsky, a member of law firm Epstein Becker Green, thinks the Labor Department was inspired to formalize these guidelines as a result of the 2008 economic downturn and rising concerns that companies might be exploiting free labor. As a result of the lawsuits that followed, many businesses decided to do away with internship programs altogether, rather than risk legal action (or pay interns).
Among the suits that followed on the heels of the updated guidelines was one brought in 2012 against Fox Searchlight. While the initial judgement found in favor of the interns, judge John Walker of the second circuit court of appeals vacated the ruling last month, writing that he considers the Labor Department's guidelines "too rigid," and recommends companies apply a "primary beneficiary test," which gives some protection to businesses hiring unpaid interns.
"The primary beneficiary test has two salient features," Walker wrote. "First, it focuses on what the intern receives in exchange for his work... Second, it also accords courts the flexibility to examine the economic reality as it exists between the intern and the employer."
"I think the second circuit decision is going to be helpful for employers," Sholinsky says. "They will feel more comfortable that their [internship] programs might qualify as an unpaid internship program that is legitimate."
There are undoubtedly some benefits (great job experience, for one thing) for students and entry-level employees seeking first jobs, but how can these young workers protect themselves from being exploited? Sholinsky recommends being realistic about the experience: "Go in at your own risk, realizing that if the company's violating the law, there's an opportunity to bring a claim."
Judge Walker's decision will certainly be taken into account in the current suit against DualStar, which might make it harder for the plaintiffs to make their case. There's one thing we can agree on: Sending your unpaid intern out to get coffee is not educational, so it's probably time to strike that from the job description. Isn't there something better they could be doing, anyway?

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