Sirius XM Radio Settles Unpaid Internship Lawsuit

Sirius XM Radio has entered into a settlement agreement to pay up to $1.3 million to its interns who claim that the company was in violation of U.S. labor laws by not compensating its interns. The plaintiffs had performed work on a number of Sirius projects, including the Howard Stern Show, and stated that they had worked up to 40 hours a week without pay. They allege that this violates the Fair Labor Standards Act (FLSA) as well as the minimum wage law in New York State.

The principal test that courts apply in this type of case is whether internships were created mainly to provide an education to young people in a certain field. This is in contrast to the use of unpaid workers for the same duties carried out by employees. According to federal court papers filed on Monday, August 3^rd, Sirius still thinks that it was not in violation of any laws by having an unpaid intern program. However, in an effort to avoid expensive litigation, the company has agreed to make payments to over 1,800 previous interns.

The settlement, which was presented by Sirius, and is pending approval by a judge, was announced one month following rulings made by the 2^nd U.S. Circuit Court of Appeals in New York. Previous cases with similar decisions include those against Fox Searchlight Pictures Inc. and The Hearst Corp., in which the appeals court also determined that the legality of unpaid internships is dependent on whether they are relevant to the education of interns. 

After the Fox case was filed in 2013, many other comparable lawsuits followed, including claims against Warner Music Group Corp., which entered into an agreement in June to pay hundreds of interns over $4.2 million. Prior to that, there were even more substantial settlements by Comcast Corp’s NBCUniversal, Condé Nast, and Viacom Inc.

In the complaint against Sirius, an intern for the Howard Stern Show named Melissa Tierney claimed that for a period of four months, she ran errands, placed orders, collected breakfast orders and carried out other menial tasks for Stern’s crew without pay. Her complaint cited the FLSA, which is explained by the Labor Department using a six-point test to decide whether an internship can be legally unpaid. According to the Department of Labor Wage & Hour Division, if the following six factors are present, then there is no employment relationship under the FLSA, and the Act’s minimum wage and overtime provisions are inapplicable to interns. The six factors are:

1. The internship resembles training that would be provided in an educational environment;
2. The internship experience is intended to be for the intern’s advantage;
3. The intern does not take the place of the usual employees, but is closely managed by current staff;
4. The employer that gives the training does not benefit from the work performed by the intern; in fact, its operations may be hindered;
5. The intern is not guaranteed a job at the end of the internship; and
6. There is an understanding that the intern is not to receive compensation for any work performed during the internship.

Given the fact that many of these factors were not present during the plaintiffs’ internship, the court ruled in favor of the interns. It appears that several large media companies are exploiting interns’ desire to work for them by requiring them to work really hard and to work long hours without pay. Some interns have said that they were even promised a job at the conclusion of the internship, but were never offered a position. In light of the recent settlements, hopefully, large media companies will think twice before taking advantage of interns.