Unpaid internship

In 1947, the U.S. Supreme Court ruled in Walling v. Portland Terminal Company that aspiring railroad brakemen who completed an unpaid training program of seven or eight days were trainees rather than employees and therefore did not need to be paid under the Fair Labor Standards Act of 1938.1 The Court found that the trainees' work did not expedite the railroad's business and sometimes actually impeded it.

That narrow ruling about a weeklong training program became the legal foundation on which employers justified decades of unpaid internships across industries that had nothing to do with railroads.2

Internships expanded gradually through the second half of the twentieth century. The word intern itself migrated from medicine, where it described a person studying to practice but not yet licensed, into government and business starting in the 1960s.3 By the 1970s, as the college population grew and the job market tightened, unpaid internships became common across multiple industries.4

In 1992, roughly seventeen percent of college students had completed an internship. By 2008, that figure had risen to about fifty percent.4

In 2010, the U.S. Department of Labor issued Fact Sheet #71, spelling out six criteria that for-profit employers had to meet to offer an unpaid internship legally, including that it be primarily educational and not displace regular employees.5 Starting in 2011, interns began filing class-action lawsuits. Two unpaid interns who worked on the film Black Swan sued Fox Searchlight, arguing they performed tasks essential to the production.2

Condé Nast settled for 5.8 million dollars. NBC Universal settled for 6.4 million.2

A National Association of Colleges and Employers survey found that more than forty percent of interns reported receiving no pay.4 Students who completed paid internships were fifteen percent more likely to receive a job offer after graduation than those who worked unpaid, and earned on average ten thousand dollars more in starting salary.6