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Madison Square Garden Sued by Unpaid Ex-Interns

By Betty Wang, JD on September 18, 2013 | Last updated on March 21, 2019

Madison Square Garden (MSG) has been sued in a class action suit by former interns. In the latest lawsuit involving unpaid interns, Forbes reports, the former MSG interns claim that MSG had used the title of "intern" or "student associate" to classify workers who performed in duties that would normally qualify them as regular employees.

According to the complaint, had the plaintiffs not performed these duties, additional employees or regular staff members would have had to take on the work, Forbes reports.

The suit seeks to recover damages of unpaid wages for improperly classified workers dating back to 2007. Here is a general breakdown of paying (or not paying) interns:

'Regular' Work

Under the Fair Labor Standards Act, the U.S. Department of Labor (DOL) has issued regulations governing unpaid internships. Under these regulations, interns cannot be substituted for regular employees without being paid at least the state or federal minimum wage.

MSG allegedly hired college students and asked them to work up to five days a week, performing regular work duties such as ticket and sponsorship sales and administrative projects. These students weren't provided any compensation.

The crux of this suit, is whether the unpaid MSG interns were essentially carrying out functions performed by the normal workforce. Unpaid interns are fine, but they can't be used to replace regular employees, basically.

Then when can unpaid interns be legal? The DOL's guidelines give this guidance:

  • The internship must be for the intern's benefit
  • The intern cannot replace a standard employee
  • The internship must be akin to training given in an educational setting
  • The employer can't derive an immediate advantage from the intern's work
  • All parties must understand that the internship won't be paid

It's crucial that if you have any unpaid interns, you must abide by these DOL guidelines. To make sure, or if you have any questions, consult with an experienced employment law attorney today.

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