982 F.3d 1006
6th Cir.2020Background
- Michigan requires cosmetology students to complete 1,500 hours (classroom + practical) and schools to follow a state-mandated curriculum; clinic salons are open to the public and supervised by licensed instructors.
- Douglas J. operated for-profit cosmetology schools where students provided paid services to salon customers but were not compensated; students also performed cleaning, laundry, restocking, and other salon-aesthetic tasks.
- Students were credited for clinic hours (including time spent on cleaning tasks), could be required to perform those tasks by instructors, and risked delayed graduation if they refused.
- Plaintiffs sued under the FLSA seeking compensation for hours spent on general cleaning/janitorial tasks and some salon work; the district court granted partial summary judgment for plaintiffs as to the janitorial tasks.
- The Sixth Circuit granted interlocutory review, held the Laurelbrook (primary-beneficiary) test governs educational settings, concluded that test applies to the specific segment of work challenged (not necessarily the whole program), reversed the district court’s partial summary judgment, and remanded for application of the Laurelbrook factors to the contested tasks.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether work not in the written curriculum (cleaning/restocking) falls outside Laurelbrook so a different test applies | Plaintiffs: janitorial tasks are beyond educational purpose and thus students were employees; district court: use an "unfair-advantage" test for non-educational tasks | Douglas J.: Laurelbrook applies to all in-program activity; plaintiffs are not employees under that test | Court: Laurelbrook governs because tasks arose from the educational relationship; district court erred to adopt a new test |
| Whether the primary-beneficiary test should be applied to only the challenged segment of work or to the entire educational program | Plaintiffs: apply the test to the specific janitorial segment (segmentation) | Douglas J.: apply the test to the entire program; if students primarily benefit overall, no compensation for any segment | Court: apply the primary-beneficiary test to the specific contested segment (targeted/segmented analysis) |
| Whether district court correctly awarded partial summary judgment to plaintiffs on janitorial work | Plaintiffs: undisputed facts show exploitation and non-de minimis hours; entitlement as matter of law | Douglas J.: factual context of vocational training and regulatory requirements show educational benefit, creating disputes | Court: reversed — district court did not properly apply Laurelbrook; remanded for fact-specific application of Laurelbrook factors |
| Whether some safeguards (de minimis/time-recording) limit segmentation abuses | Plaintiffs: not central to entitlement here | Douglas J.: segmentation invites administrability problems and inconsistent outcomes | Court: administrative concerns insufficient to foreclose segmentation; district court should consider de minimis/practicality in remand |
Key Cases Cited
- Solis v. Laurelbrook Sanitarium & School, Inc., 642 F.3d 518 (6th Cir. 2011) (establishes primary-beneficiary test for educational/training contexts)
- Tony & Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290 (U.S. 1985) (economic-reality inquiry and rejection of labels controlling employee status)
- Rutherford Food Corp. v. McComb, 331 U.S. 722 (U.S. 1947) (totality-of-the-circumstances in employment relationship)
- Benjamin v. B&H Educ., Inc., 877 F.3d 1139 (9th Cir. 2017) (applied primary-beneficiary/Glatt-style factors to cosmetology clinic time)
- Hollins v. Regency Corp., 867 F.3d 830 (7th Cir. 2017) (cosmetology-student FLSA claim analyzed in light of educational purpose)
- Velarde v. GW GJ, Inc., 914 F.3d 779 (2d Cir. 2019) (cosmetology-student FLSA claim applying Glatt factors to whole program)
- Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199 (11th Cir. 2015) (internship context; recognized possibility that part of experience may be outside legitimate internship)
- Aiken v. City of Memphis, 190 F.3d 753 (6th Cir. 1999) (de minimis time doctrine relevant to FLSA liability)
- Fegley v. Higgins, 19 F.3d 1126 (6th Cir. 1994) (employment-relationship as question of law under economic reality test)