Lori Chavez-DeRemer v. NAB, LLC, 2:21-cv-00984

Background

Plaintiff: Acting Secretary of Labor sued NAB, LLC (NAB Nail Salon), owner Asia Trinh, and manager Nicole Brown, alleging FLSA violations: misclassification of nail/eyelash technicians, unpaid minimum wages and overtime, deficient recordkeeping, and retaliation during a DOL investigation.
Trinh is NAB’s sole owner; Brown managed day-to-day operations. NAB was defaulted for failing to obtain counsel; Brown and Trinh proceeded pro se.
Investigators found pervasive employer control (scheduling, pricing, training, pay practices); defendants coached employees to present false statements and forced them to sign independent-contractor agreements and obtain business licenses.
Court: treated Secretary’s motion as summary judgment (and as default judgment as to NAB), granted liability for wage-and-hour violations for 5/21/2018–12/31/2019 and 1/1/2021–12/31/2021, but found the record insufficient to establish FLSA coverage for 2020 and 2022.
Court also granted summary judgment for the Secretary on the recordkeeping and retaliation claims; damages on wage-and-hour claims reserved pending revised calculations excluding non-covered periods.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are nail and eyelash technicians employees or independent contractors under the FLSA economic-realities test?	Technicians are employees: NAB exercised high control over schedules, prices, training, assignments, supplies, and pay.	Techs were independent contractors who controlled their own work and profit.	Technicians are employees. Undisputed facts on control, permanence, investment, and integral role favor employee status.
Are Brown, Trinh, and NAB "employers" under the FLSA (individual liability)?	Brown and Trinh exercised operational and economic control (hiring/firing, pay, policies).	They claim to be mere manager (Brown) and technician (Trinh) without employer status.	Brown and Trinh are employers; NAB (defaulted) also treated as employer.
Does NAB meet interstate-commerce (enterprise or individual) coverage for 2018–2022?	Enterprise: NAB used out-of-state apps and out-of-state products and had >$500,000 sales in some years; Individual: employees used internet apps daily.	NAB denies $500k sales and contends employees’ activities were purely intrastate/local.	Enterprise coverage established for 2018, 2019, and 2021 (sales and interstate goods/apps). Coverage not established for 2020 and 2022; individual coverage fails for 2020/2022 because app use was local/intrastate.
Did defendants violate FLSA minimum-wage and overtime requirements?	Yes—employees worked long shifts on-premises, were paid commissions/salaries without overtime, and records show shortfalls.	Defendants dispute hours worked and wage calculations.	Liability established for wage-and-hour violations in covered years (2018, 2019, 2021). Hour calculations partly rely on DOL reconstructions; damages deferred for recalculation.
Were defendants’ actions retaliatory and were recordkeeping requirements violated?	DOL: defendants coached employees to give false statements, forced signing of agreements/licenses, sent cease-and-desist threats—adverse actions tied to investigation. They also failed to keep adequate time records.	Defendants offered no meaningful rebuttal.	Summary judgment for Secretary on retaliation and recordkeeping claims; injunction against future violations entered.

Key Cases Cited

Williamson v. Gen. Dynamics Corp., 208 F.3d 1144 (9th Cir. 2000) (FLSA remedial purpose and coverage principles)
Rosenfield v. GlobalTranz Enters., Inc., 811 F.3d 282 (9th Cir. 2015) (FLSA interpretation favoring employees)
Cleveland v. City of Los Angeles, 420 F.3d 981 (9th Cir. 2005) (liberal construction of FLSA protections)
Lambert v. Ackerley, 180 F.3d 997 (9th Cir. 1999) (broad reading of FLSA anti-retaliation and employer tests)
Donovan v. Sureway Cleaners, 656 F.2d 1368 (9th Cir. 1981) (economic-realities factors for employee status)
Chao v. A-One Med. Servs., Inc., 346 F.3d 908 (9th Cir. 2003) (enterprise vs. individual commerce coverage)
McLeod v. Threlkeld, 319 U.S. 491 (1943) (individual coverage requires activities actually in or closely related to commerce)
Cadena v. Customer Connexx LLC, 51 F.4th 831 (9th Cir. 2022) (worktime and compensable hours principles under FLSA)
McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988) (willfulness standard for three-year statute of limitations)
Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006) (adverse action standard for retaliation claims)