Federal Courts: Cosmetology Student-Workers May Pursue Unpaid Wages

Federal Courts: Cosmetology Student-Workers May Pursue Unpaid Wages

Aspiring barbers and cosmetologists enroll in beauty schools for a chance at a promising career in cosmetology. Cosmetology students pay upwards of $15,000 tuition to enroll in beauty schools such as Milan Institute of Cosmetology, Marinello Schools of Beauty, and Paul Mitchell The School and, upon completion, hopefully obtain a cosmetology license.

To graduate from these beauty schools, while enrolled, students are required to work in beauty school salons serving paying customers. The students perform services requested by customers whether or not it furthers the training needed to become licensed cosmetologists. Students are also assigned duties that do not assist them in obtaining a cosmetology license, such as janitorial and laundry services, as well as selling beauty products on behalf of the beauty schools. Students receive no compensation, no overtime pay, no premium pay for missed meal and rest breaks, and are not reimbursed for supplies and equipment purchased for use on the beauty school salon customers. Through this scheme, the beauty schools profit from free labor in their salons.

In the cases pending against them, the beauty schools filed motions to dismiss California and Nevada wage law claims, arguing that under Hutchison v. Clark, 67 Cal.App.2d 155 (1944), publications of the California Division of Labor Standards Enforcement (DLSE), and provisions of the Nevada state cosmetology laws and regulations, cosmetology school students cannot be employees of the schools. The student-workers argue that they are employees pursuant to state and federal labor laws, and that developments in the law render obsolete the 70 year-old Hutchison decision and the DLSE guidance relying upon it. In Martinez v. Combs (2010) 49 Cal.4th 35, the California Supreme Court established a more modern “employer” definition that does not categorically exclude student-workers from compensation.

On July 30, the United States District Court for the Central District of California, Hon. Phillip S. Gutierrez, determined that cosmetology students performing work on paying customers in cosmetology school salons may be deemed employees in the context of state law. They may be entitled to minimum wages, overtime, and other benefits of the Labor Code. Judge Gutierrez held that “[a]fter Martinez, Hutchison is no longer good law.” Applying the Ninth Circuit Court of Appeals’ standard for evaluating claims under state law where the California Supreme Court has not yet addressed the issue, the court held:

Based on Martinez, the Court concludes that the California Supreme Court would hold that [Defendants’] students may be properly classified as its employees, if they are within the definition of “employment” established by the IWC.

The court further concluded that the California Barbering and Cosmetology Act is silent regarding whether cosmetology students must be paid for work they perform within their beauty school. The cosmetology students may be covered by California’s wage and hour laws and Wage Order No. 2, holding that “the employment status of cosmetology students is left to be determined by California employment law.” The court also gave the student-workers a fix to amend their complaint to add more allegations against the individual owner of the cosmetology school. The federal court in San Francisco followed suit, refusing to dismiss California and Nevada wage law claims, and allowing an opportunity to amend to add claims against the individual owners. The San Francisco court also asked the Labor Commissioner of California to weigh in on whether cosmetology students can also be school employees.

After these victories, there is no categorical exemption from pay for beauty school students in vocational programs who perform services on paying customers. The law requires an analysis of whether an employment relationship exists and, if proven, vocational schools must abide by wage and hour laws. The analysis is similar to that for wage claims by other interns, apprentices, and trainees in the economy. The most important factor is whether the students’ salon work provides an immediate benefit to the schools (which it does), and some other factors to consider are whether the training provided is largely not for the benefit of students, whether the students’ salon work is closely supervised, and whether regular employees are displaced by the use of the students’ labor.

Bryan Schwartz Law, P.C. and co-counsel Rudy, Exelrod, Zieff & Lowe LLP and the Law Office of Leon Greenberg represent Plaintiffs and putative classes of current and former cosmetology students at Milan and Marinello. Bryan Schwartz Law, P.C. along with the Law Office of Leon Greenberg represent Plaintiffs and putative classes of current and former Paul Mitchell cosmetology students. The complaint against Milan, Maria Ford v. Gary Yasuda, et al., Case No. 13-1961, pending in federal court in the Central District of California (in Los Angeles), is available here. The complaint against Marinello, Jaqueline Benjamin v. B&H Education, Inc. et al., Case No. 13-cv-04993, pending in federal court in the Northern District of California (in San Francisco), is available here. The complaint against Paul Mitchell, Jessica Morales et al v. Von Curtis, Inc. et al., Case No. 14-06540, pending in federal court in the Central District of California (in Los Angeles), is available here.