By Jason Belzer
MSG Holdings, L.P. and The Madison Square Garden Co. have become the latest company targeted in a putative class action lawsuit.
The action, filed on September 16, 2013 in the Southern District of New York, was brought by lead Plaintiff Christopher Fraticelli and an estimated 500 other individuals who were similarly employed by MSG Holdings, L.P. and The Madison Square Garden Company, and/or any other entities affiliated with or controlled by MSG including but not limited to the New York Knicks, New York Rangers, New York Liberty, Madison Square Garden, MSG Networks, MSG Media, Fuse, Radio City Music Hall, and the Beacon Arena.
According to the complaint, MSG Holdings and The Madison Square Garden Co. have misclassified members of the class as interns or student associates since 2007 in an effort avoid paying these individuals. Allegedly, this allowed MSG to improperly use these titles when hiring college students to do work, which would otherwise qualify them as employees.
The lawsuit alleges that Fraticelli and other class members performed various tasks related and necessary to MSG’s operations, including assisting with MSG ticket and sponsorship sales, administrative projects and logistical duties pertaining to the organization of sports and entertainment events at the arena.
Fraticelli’s primary job duties, among other things, included data entry, tracking inventory, opening packages and organizing the items contained within. Additionally, the complaint claims that the Defendants did not provide any academic or vocational training to Plaintiff or members of the putative class.
Fraticelli has asserted Federal Law claims under the Fair Labor Standards Act as well as State law claims under New York Labor Law in an effort to recover unpaid minimum and overtime wages plus interest, attorneys’ fees and costs.
The complaint specifies that Fraticelli typically worked five days a week for approximately seven to eight hours each day. Occasionally, Fraticelli’s job duties required him to work more than forty hours a week.
“Defendants did not provide any compensation to… members of the putative class for the hours worked…[and] would have hired additional employees or required existing staff to work additional hours had…members of the putative class not performed work for the defendants,” according to the complaint.
The MSG lawsuit comes on the heels of several suits being brought against major entertainment, fashion and media companies for similar unfair labor practices concerning the hiring of interns. Among those entities being sued include Gawker Media LLC, Columbia Recordings, and NBCUniversal including their famous Saturday Night Live television program.
In these suits, former interns claim that Defendant failed to provide reasonable working conditions, that the Defendant offered their former interns little if any compensation for the rigorous hourly demands, and often based on unsubstantiated claims they would be given full time jobs after the completion of their internships.
Of course, those who work in both the sports and entertainment industry know unpaid internships are common practice throughout. While companies like MSG could almost certainly afford to pay minimum wage for workers participating in such programs, any financial rewards such opportunities present are far outweighed by the learning experience and new skills students and young professionals acquire during such internships.
More significantly, literally hundreds, if not thousands of smaller sports marketing, media and management agencies and other corporate entities throughout the sports business depend on unpaid interns to help run projects within their company. Many of the most successful companies in the sports business were started with the aide of students willing to exchange their time and energy in return for mentorship, guidance and real world business experience. The majority of these companies would be incapable of paying interns during their start-up stage, even if required by law.
While the outcome of the case still remains to be seen, business owners throughout the sports industry hope that the court gives careful consideration to the implications that a verdict in favor of the plaintiffs can cause for an industry so reliant on free labor. Any victory for interns would be short lived, as it would further limit the already small number of opportunities for young individuals to break into the highly competitive industry of sports and entertainment.
Jason Belzer is founder and President of Global Athlete Management Enterprises, Inc. (GAME, Inc.), an agency that specializes in the career management and marketing of coaches, and creation of collegiate sports properties.
