Waterstones has removed itself from an initiative to use unpaid workers, following an investigation by the Guardian.
The bookstore, which recently announced that it was dropping the apostrophe from the end of its title, is among a number of famous high street names which was taking part in work experience schemes.
However, a case taken to the High Court has led to the government defending itself against allegations that such unpaid work schemes contravene Human Rights Act regulations.
It comes after Cait Reilly brought a case against the Department for Work and Pensions (DWP), claiming that she was forced to work unpaid in a local Poundland store.
The DWP said that it made a mistake in not telling Ms Reilly that the placement was not compulsory.
The Guardian reported that the DWP could face a number of legal challenges to its employment programmes, which are attempting to ease the unemployment situation in the UK.