New guidelines defining the conditions for unpaid internships may prove unsettling to any company that has become accustomed to getting free work from eager young people.

The guidelines, actually established in 2010 but until recently largely overlooked, were cited in a federal lawsuit involving Fox Searchlight Pictures Inc.

"In a decision that is sure to shake up how many employers handle their internship programs, a federal district court has ruled that unpaid interns working in the offices of motion picture production companies were not 'trainees' under the federal Fair Labor Standards Act or New York law, but employees who had to be paid," wrote attorneys Diane L. Kimberlin and Joseph Lazazzero of Littler Mendelson LLP.

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.