Guy v. Casal Institute of Nevada, LLC
2:13-cv-02263
D. Nev.Aug 23, 2016Background
- Plaintiffs are former Aveda Institute Las Vegas cosmetology students who worked in Aveda’s on-site public clinical salon as part of their training and sued under the FLSA alleging they were entitled to wages.
- Aveda is a for‑profit, state‑licensed cosmetology school that operates a public salon charging customers for services performed by students; instructors provided limited, intermittent supervision.
- Students progressed through staged training (theory then clinical levels) and were required to perform services on paying customers by rotation; students could not solicit volunteer clients.
- Students also performed routine janitorial, laundry, and dispensary tasks; Aveda employed separate cleaning staff only for bathrooms.
- Plaintiffs moved for partial summary judgment; defendants moved for summary judgment. The court held a hearing and considered whether students were "employees" under the FLSA via the economic‑realities test.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether cosmetology students working in Aveda’s clinic are "employees" under the FLSA | Students were employees because Aveda treated them as a workforce performing services for paying customers with limited supervision and economic benefit to Aveda | Students are learners/trainees, not employees; education, tuition payment, and lack of explicit compensation preclude employee status | Held: Students are employees as a matter of law under the FLSA (partial summary judgment for plaintiffs) |
| Whether the "economic‑reality" factors support employee status | The totality of circumstances (control, supervision, work conditions, economic benefit) shows employer‑employee relationship | Argues traditional trainee cases and lack of express compensation/expectation of employment weigh against employee status | Held: Economic‑reality test (power/control, supervision, payment method, records) favors finding employees; factors considered holistically |
| Whether Aveda subordinated educational aims to revenue generation (subordination test) | Aveda prioritized business: required repetitive menial tasks, used paying customers instead of volunteers, limited supervision, and students performed work that would have been done by paid staff | Aveda provided education/skills toward licensure; salon revenue subsidized tuition and aided student advantage | Held: Aveda subordinated education to business interests; evidence shows students functioned as clinic employees benefiting Aveda financially |
| Whether summary judgment was appropriate | Plaintiffs argued facts entitle them to judgment as a matter of law on employee status | Aveda argued cases and facts preclude employee status and that summary judgment for defendant is warranted | Held: Court granted plaintiffs’ partial summary judgment and denied defendants’ summary judgment |
Key Cases Cited
- Walling v. Portland Terminal Co., 330 U.S. 148 (distinguishing close trainee supervision where trainees were not employees)
- Tony & Susan Alamo Found. v. Sec'y of Labor, 471 U.S. 290 (trainees in commercial activities were employees; contrasted with Walling)
- Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318 (FLSA’s definition of "employ" is to be interpreted expansively)
- Boucher v. Shaw, 572 F.3d 1087 (9th Cir.) (economic‑reality test governs employer‑employee inquiry)
- Hale v. State of Arizona, 993 F.2d 1387 (9th Cir.) (non‑exclusive factors for economic‑reality analysis)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Scott v. Harris, 550 U.S. 372 (no genuine issue when record as a whole cannot lead a rational trier of fact to find for the nonmoving party)