Jacqueline Benjamin v. B & H Education
877 F.3d 1139
| 9th Cir. | 2017Background
- Plaintiffs were cosmetology/hair-design students at for-profit Marinello Schools of Beauty (California and Nevada) who worked unpaid in on-site clinics as part of their training.
- State law requires hundreds of classroom and clinical hours and individual licensure; clinic hours counted toward eligibility for the state licensing exams.
- Plaintiffs alleged Marinello exploited them for unpaid labor (unsupervised work, performance of services they already knew, fines, mandatory purchase of supplies) and sought unpaid wages and penalties under the FLSA and California/Nevada law.
- District Court struck three undisclosed witness declarations under Federal Rule of Civil Procedure 37 and granted summary judgment for defendant, applying the “primary beneficiary” test.
- Plaintiffs appealed challenging (1) employee status under the FLSA and state law, and (2) the Rule 37 sanction. Ninth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether students are "employees" under the FLSA | Students (Benjamin et al.) argued they were employees because they performed unpaid, unsupervised, revenue-generating work and displaced paid labor | Marinello argued students were trainees whose primary benefit was educational—clinic work provided required hands-on training toward licensure | Held: Students were not employees under the FLSA; the primary beneficiary test favors students as the primary beneficiaries of the relationship |
| Applicability of DOL six-factor test v. primary-beneficiary test | Plaintiffs urged application of the DOL/Portland Terminal-derived factors to find employment | Marinello argued the Glatt primary-beneficiary totality-of-the-circumstances test is controlling and more flexible | Held: Ninth Circuit adopted and applied the Glatt primary-beneficiary test; found DOL test too rigid and result would not change here anyway |
| State-law wage claims (Nevada and California) | Plaintiffs argued state law entitles them to wages despite federal result; urged IWC/control-based test in California | Marinello argued Nevada follows FLSA analysis; California control inquiry still does not convert students into employees in an educational context | Held: Nevada claims fail under same primary-beneficiary analysis; California claim likewise fails—court would apply a similar primary-beneficiary approach rather than treat school control as dispositive |
| Rule 37 sanction for undisclosed witness declarations | Plaintiffs contended the declarations should be considered (one allegedly disclosed indirectly) | Marinello argued nondisclosure violated Rule 26 and justified striking under Rule 37; defendants were prejudiced | Held: District Court did not abuse discretion striking declarations; nondisclosure was neither justified nor harmless, and declarations would not have changed the outcome |
Key Cases Cited
- Walling v. Portland Terminal Co., 330 U.S. 148 (Sup. Ct. 1947) (seminal trainee-vs-employee framework; students/trainees may not be employees if primarily benefited)
- Tony & Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290 (Sup. Ct. 1985) (economic-reality test; expectation and form of compensation relevant)
- Rutherford Food Corp. v. McComb, 331 U.S. 722 (Sup. Ct. 1947) (employment inquiry requires totality of circumstances)
- Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528 (2d Cir. 2016) (adopts primary-beneficiary test for interns under FLSA)
- Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199 (11th Cir. 2015) (adopts and applies primary-beneficiary test to student clinicians)
- Solis v. Laurelbrook Sanitarium & School, 642 F.3d 518 (6th Cir. 2011) (analyzes which party derives primary benefit from training relationship)
- Hale v. Arizona, 993 F.2d 1387 (9th Cir. 1993) (economic-reality factors applied to inmate labor; no bargained-for compensation)
- Bonnette v. California Health & Welfare Agency, 704 F.2d 1465 (9th Cir. 1983) (four-factor test for employment status under economic-reality analysis)
- Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101 (9th Cir. 2001) (standard of review and considerations for Rule 37 discovery sanctions)
- Martinez v. Combs, 231 P.3d 259 (Cal. 2010) (California wage-law analysis; definition of employer tied to control under IWC wage orders)