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There’s A Fine Line Between Exploitation And Opportunity In The Film Industry.

There’s A Fine Line Between Exploitation And Opportunity In The Film Industry.

Michael Bernard, indie filmmaker, has something important to say on the subject of interns.

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??)

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.

Recently there 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 Corps’ 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, too). The IRS and the States, especially California, have 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 this evening that they have already shut down their intern program, which had been very vibrant as an entry into the Hollywood film business.

@mrbarnard1 Spoke to attorneys today. Internships at our office are gone.

— Dana Brunetti (@DanaBrunetti) June 13, 2013

Is the 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 – let’s 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.

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