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September 2016

San Diego Team Prevails in Obtaining Summary Judgment/Dismissal in Favor of Cosmetology School Client

Gordon & Rees attorneys Gina Haggerty Lindell, Susanna Matingou and Stephanie Halford successfully obtained summary judgment/dismissal in favor of Cosmetology School clients. The plaintiffs, former cosmetology students, filed suit in federal court in 2015 alleging that while they were students they performed cosmetology services on members of the public for which they should have been paid as employees. This case is one of several similar lawsuits recently filed against cosmetology schools throughout the country. After multiple depositions were taken, Gordon & Rees filed a joint motion for summary judgment with co-defendants (other schools/owners) seeking a ruling that the cosmetology student plaintiffs did not qualify as employees under federal or state law.

On August 22, 2016, Judge Dale Fischer of the Central District Court of California issued a tentative ruling granting the motion for summary judgment and finding the plaintiffs were not employees under the Fair Labor Standards Act (FLSA) or California or Nevada law. Following oral argument, Judge Fischer confirmed her tentative ruling on August 23, 2016.

In her memorandum of ruling, Judge Fischer agreed with the firm’s argument that the appropriate test to determine the employment status of the plaintiffs under the FLSA is the primary beneficiary/economic reality test. The plaintiffs unsuccessfully argued that the court should follow informal guidance issued by the Federal Department of Labor (DOL). In applying the primary beneficiary/economic reality test, the court found the plaintiffs were the primary beneficiaries of the classroom clinic time because it allowed them to complete required hours for licensing, to receive the practical training required by California regulators, and to become eligible to take the state licensing exam.

The court also disagreed with the plaintiffs’ argument that the California Supreme Court’s holding in Martinez v. Combs, abrogated a 1944 California appellate case, Hutchison v. Clark, that held pursuant to the California Barbering & Cosmetology Act, that cosmetology students attending schools are not employees to whom wages must be paid. Instead, Judge Fischer agreed with the firm’s argument that Martinez, a case involving contract farm labor, did not overrule Hutchison’s holding and did not stand for the proposition that students of cosmetology schools should be treated and paid as employees.