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Media giant Viacom has reached a settlement in a class action lawsuit brought by former unpaid interns of the company.
The terms of the settlement have not yet been disclosed, according to The Hollywood Reporter. But Viacom -- whose holdings include MTV, Paramount Pictures and Comedy Central -- is just the latest media company to have an internship policy come back to bite them in the form of a class action lawsuit.
What did Viacom allegedly do wrong, and what can small business owners learn from this case?
The Viacom lawsuit was granted class action status in April by a U.S. district court judge. In the opinion, the judge wrote that the plaintiff, a former unpaid intern at MTV, had shown sufficient proof that interns at the company may have been "victims of a common policy to replace paid workers with unpaid interns" and may be able to recover unpaid wages.
Under the federal Fair Labor Standards Act, unpaid interns generally cannot displace regular employees. Rather, interns are supposed to work under the supervision of staff, gaining experience that is for the intern's benefits but not necessarily for the benefit of the company.
With the new year (and a new semester) upon us, now is a good time for business owners to remind themselves about the criteria that unpaid internships must meet under federal labor rules. These include:
Failure to follow one or more of these rules may expose your company to a potentially costly lawsuit by both current and former interns. If you have questions about your company's internship policy, it may be best to consult an employment attorney to be sure that you are operating within the law.
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