Gawker Media and founder Nick Denton won a three-year-old legal battle over unpaid internships on Tuesday when U.S. District Judge Alison Nathan concluded that the claims were outside the statute of limitations and failed under the 2nd Circuit’s “primary beneficiary” test.
Former interns Aulister Mark and Andrew Hudson hoped to lead a class-action lawsuit against Gawker for allegedly not paying minimum wage under the Fair Labor Standards Act and New York Labor Law.
“The Court has considered the totality of the circumstances and the economic reality of the relationship between Mark and Defendants,” Nathan ruled. “The Court concludes that Mark was the primary beneficiary of his internship, and grants summary judgment to Defendants on his [Fair Labor Standards Act] and [New York Labor Law] claims. Those claims are dismissed.”
Essentially, the court ruled that Mark had no expectation of compensation and the training he received was payment enough. As for Hudson, his clam was outside the statute of limitations.
Last year the federal appeals court reviewed a similar case involving a pair of Fox Searchlight interns and ruled, “An employment relationship is not created when the tangible and intangible benefits provided to the intern are greater than the intern’s contribution to the employer’s operation.”
Gawker has spent a lot of time in court lately and plans to appeal a recent verdict in which Hulk Hogan was awarded $140 million in damages for a story on Gawker.com in which the wrestler is depicted having sex in video posted without his permission.