Viacom to pay $7.2 million in intern suit

The media giant agrees to settle lawsuit over its unpaid internship program.

Media company Viacom has agreed to settle a lawsuit brought by former interns who demanded to be paid for their time at Viacom’s television networks, including MTV and BET.

The 2013 lawsuit alleged that Viacom’s unpaid internship program was a violation of state and federal wage laws.

Viacom agreed this week to pay as much as $7.2 million to settle the case, according to court documents. The actual amount paid will depend on how many of the former interns seek compensation for their stints at Viacom. As many as 1,000 former interns could be included in the group covered by the proposed settlement.

The lawsuit was one of several that put a spotlight on an entertainment industry practice in which television networks, movie studios and production companies used unpaid internships to save money, while offering a foot in the door for people aspiring to work in Hollywood.

But labor laws require that unpaid internships primarily benefit the interns — not the employers. The laws mandate that unpaid interns gain educational benefit from their work experience and cannot be used to replace regular paid workers.

The Viacom case was filed in U.S. District Court in New York in August 2013 on behalf of Casey Ojeda, a New York Web developer who worked at Viacom for about five months in 2011, and Karina Reynaga, a California woman who served as an intern in Viacom’s human resources department in 2012.

The suit, which sought class-action status, claimed that the company illegally determined that the interns’ duties were exempt from minimum-wage requirements. Viacom, controlled by Los Angeles billionaire Sumner Redstone, began paying its interns in 2013.

Under the proposed settlement, interns who worked for Viacom’s TV networks in New York between Aug. 13, 2007, and June 1, 2013, could be eligible for compensation. Those who worked as interns in Los Angeles from Sept. 11, 2010, to June 1, 2013, might also qualify.

“We are pleased to conclude this litigation,” Viacom said in a statement.

The wave of internship lawsuits began in 2011, when former unpaid interns on the movie “Black Swan” filed a claim against Fox Searchlight Pictures, alleging that Fox had violated the Fair Labor Standards Act. The two former Fox interns won a landmark ruling when a judge determined they were, in fact, employees of the studio and entitled to minimum wage. Last fall, NBC Universal settled a similar suit with former interns for $6.4 million.

Attorneys for the Viacom interns were not immediately available for comment. Viacom, for its part, defended its program.

“Viacom’s popular internship program has helped thousands of students launch careers in the entertainment business and beyond,” the company said. “We are proud of our efforts — not only do we fully comply with all applicable educational requirements, but Viacom’s interns also take part in a unique, in-house educational program designed to broaden their experience and help them learn from senior executives across the company.”