Walking Employees Through It: Why Do I Have to Sign a Non-Compete?
Living the Zappos HR Lifestyle - An Interview with Jamie Naughton (Cruise Ship Captain at Zappos)

Mark Cuban: Your Petty Employment Law Regarding Unpaid Interns is Lame....

I get why we have employment laws.  Allow too much latitude, and people get used and abused by bad people.  Schemes.  Ponzi games.  Direct-level marketing.

One place this gets interesting is the concept of internships.  One of the HR pros on my team at DAXKO recentlyIntern-front-large put together a city workshop on how to set up an internship.  In talking to her, I realized I didn't know a lot about how internships have to be structured, so I asked her some questions.  One of the things that came up?  In order for an internship to be unpaid, the work completed has to provide no value to the organization.

What? I had to pause when she told me that in order to get my head around it. 

The humanity.  Talk about the law of unintended consequences.  Millions of students need some experience to put on their resume to compete, and people like me ponder the laws, then walk away because we need a nap after pondering that.

Add Mark Cuban to the list, because he just had a similar experience:

"This summer, in response to the changing sports media landscape, I wanted to create a “media pool” for the Mavs.  I wanted to assemble a group of unpaid interns that would acquire video, write game reports, track unique stats, do interviews, interact with fans, and then compile all of this incremental media and provide it free to any and every outlet we could think of. If a middle school newspaper or website wanted up to the minute Mavs reports, check. We had em.  Social networks ? All the content you need. Of course we would update our Mavs.com, mavswiki.com, friends.mavs.com websites and offer the content to any and every blogger out there.

One silver lining of a “great recession” that we are now in is that there are a lot of incredibly talented people without jobs, or who have lost their jobs. I didn’t care if they were 18 years old or 73 years old.  I thought we could assemble a talented group who would enjoy the internships and could also gain valuable experience to add to their resumes.  When the economy opened up, one of two things would hopefully occur.  We were generating revenue from this effort and we could hire them, or they had just built up their resumes and improved their chances of finding a paying job.

Makes sense right ?

Wrong. Enter the US Government.

This is what our HR person, who his supersmart and really knows his stuff came back with

“The law says that interns have to be paid unless they are perfoming work that is of no value to the organization; ie., helps them in some way but we get no benefit from their work.  Thus we would have to create work that is useless to us  if we choose not to pay them". 

How silly is that? “

You can read the rest of his post for more ranting, but the point was similar to my experience.  Someone desperately needs experience in their chosen field to be marketable, and because of past abuses of the labor pool, we make laws that force people who can provide that experience to walk away.

The law of unintended consequences at work.  How about having the employer responsible, if asked, to prove that someone gets experience that is worth something, rather than forcing work of no value?

Duh? This is why people pause to readily accept more government in their lives...



While I generally agree, a situation like Mr. Cuban wants would lead to most all of the work done in his organization to be done by unpaid interns. It easily leads to abuse of the available workforce. Massive numbers analyst, marketing, and promotional jobs are eliminated because all of the day-to-day work can be done by eager interns.

And to some degree, this can be a good thing. I think that perhaps having a limit on the number of interns as a percentage of overall employee number (or some other upper-bound limit) would likely work. But I do agree that this "no-value" situation is not a good idea.

In addition, I see many industries where unpaid internships are adding value every day - radio, television, music production, etc. These are industries filled with internships that do much of the heavy lifting for the organization.


"A situation like Mr. Cuban wants would lead to most all of the work done in his organization to be done by unpaid interns"

...except for the whole basketball thing.

The Mavericks core competency is basketball: developing athletes, keeping them healthy and most of all, players performing on the court. The media work of these unpaid interns could certainly add significant value to the Mavs brand but they're not going to replace the Dirk Nowitzki. (Or Casey Smith, for that matter.)

When the government meddles too much, they take away the freedom of organizations to develop new talent in a way that benefits both parties.


I have had unpaid interns work for me in HR in the past. They were unpaid because I could not pay them (i.e. no budget) and received college credit for their internship class (required by the college to graduate). I was informed by my legal team that they could not take the place of an hourly worker. They had to perform work at a high level that would provide them with an exceptional experience. So, they worked on all of the fun projects that I wanted to do but never had the time to tackle. Yes, I had to dodge and protect them against other managers who wanted them to file and do data entry because that is not legal. I made sure that they had a take-away piece that they could physically show a potential employer what they worked on with me - a report, brochure, website, etc... I asked for their feedback about the experience and gave them positive and constructive feedback about their performance. I told them what HR was REALLY like (no, we don't just like people). And, I was their #1 professional reference (when the experience went well) for their first job out of college. It is a lot of work when done correctly and abiding by the FLSA, but so worth it to give a college student a taste of HR.

Kris Dunn

Matt - I don't think you'd get to the point where all the work would be done by interns, because the mgnt team at some point would require experience that drives results once you got to certain positions and jobs. Digging your point about an alternative to the law is to cap a certain % of jobs as unpaid interns. Nice...

Bonita - thanks for the alternative reading. I guess you can get in the margins with the definition of "worthless" work, in your case, work that doesn't take a job away from anyone, right?

Nathan - what about the 3rd string point guard for the Mavs? Can I get that unpaid internship?

Adam Aldrich

The government assumes that Money is the only valuable compensation for work. That is a bad assumption because working with knowledgeable people on something is worth more than money to someone getting started in a field.



True, however, these athletes represent less thank 1% of the total workforce of the Mavericks. Including trainers, coaches, medical staff, etc., it is likely that their core only encompasses 10% of their total workforce, perhaps less. The bulk of these organizations is in media, facilities management, distribution, sales, and merchandising.

Interns don't contribute to the core competency, as professional sports teams do not employ intern players, coaches, or medical staff, nor do they intern people who will one day work in those areas. They intern people to work in media, sales, distribution, etc. This represents the bulk of employment in these organizations.


I normally agree with most of the posts here, but on this one I don't. I think that if a company is getting a benefit from the work provided they should pay for that work.

At my company we have a strong intern program. We hire the best students we can find, give them real work to do and if they do do that work well, use the interns as a talent pool for full time hires.

Because of this, everone wins. The students get real work experience and pay, we get the benefit of their labor and hopefully a great employee who has experience and knows our culture once they graduate.


I agree with Michelle! Recently, an employee mentioned that one of his friends is in New York working at an architecture firms as an unpaid intern. This firm, like others in New York, can hire the cream of the crop as unpaid interns because of the glamorous nature of their projects and founding designer. Unfortunately, this firm is also dangling the prospect of a full-time job to all the unpaid interns. At some point, one or two of the numerous unpaid interns will be chosen to come on board full-time. In the meantime, the unpaid interns outnumber paid staff, work long hours, and compete in a cut-throat environment for those coveted full-time positions. And the firm is benefiting by getting free production work. Clearly this is the type of situation this law is trying to prevent. Surely they can afford minimum wage!


Matt - you're right about the ratio of a basketball team. To borrow the old joke, they are like marketing powerhouses with a basketball problem. Good point.

As for intern players, what about KD? Alan Rupe has been has a working theory for that one. http://www.workforce.com/archive/feature/26/55/94/index.php

Laura Neidert

From the intern coordinator side of the desk-

This has been a great discussion, and I've enjoyed seeing employer opinions. As a small liberal arts school, I tend not to have to deal with this issue. But my brethren at larger schools do. Matt, your idea about capping the number of unpaid interns is a great one! This whole issue of paying interns or not is pretty much the definition of unintended consequences. I say whether you pay my students or not, please focus your energies on giving them a substantive and quality experience, much like Bonita described.

For the level of discussion that's been had about this issue, maybe it is worth ranting about to our elected officials, etc.

The comments to this entry are closed.