Last week, a divided Sixth Circuit reversed the plaintiffs’
partial summary judgment and remanded a FLSA minimum wage case brought by cosmetology
students against a for-profit vocational school based on janitorial services
that the students were required to provide when the educational salons were not
serving customers. Eberline
v. Douglas J. Holdings, Inc., No. 19-1781
(6th Cir. 2020). The court’s
majority held that “when a plaintiff asserts an entitlement to compensation
based only on a portion of the work performed in the course of an educational
relationship, courts should apply the primary-beneficiary test we laid out in Laurelbrook only to that part of the
relationship, not to the broader relationship as a whole.” In re-evaluating the claims, the trial court
was directed to consider many factors, including “the plaintiffs’ lack of
expectation of payment; the educational value, both tangible and intangible, of
the tasks under scrutiny; and the displacement of paid employees to the
school’s competitive benefit in the commercial marketplace, . . . . as well as
any other considerations that may “shed light on which party primarily benefits
from the relationship.” The “additional
considerations might include: the mandatory or voluntary nature of the tasks;
the relationship of the work at issue to the school curriculum, state
regulations, and the school’s stated mission and educational philosophy; the
type of work performed in the corresponding real-world commercial setting; and
the academic credit received by the plaintiffs for the work.” Finally, “before concluding any portion of
plaintiffs’ work for [the school’ is compensable, the district court should
determine whether the work at issue is for de minimis amounts of time or is
practically speaking too difficult to record.”
According to the Court’s opinion, the students were required
by state law to obtain a certain number of hours in classroom and practical
instruction before graduating and becoming licensed. The defendant salon operated a salon where
only the students provided services to paying customers under the supervision
of licensed instructors and were graded on the services provided and guest
experience. The salon also employed (for wages) a
janitorial staff and other employees who also maintained the salon. When there were few or no customers in the
salon, the students were required to clean the service stations, and
classrooms, etc. “Students could also be
asked to do laundry, restock shelves with products sold to customers, clean
various stations where customer services are performed, and clean and replace coffee
mugs, among other tasks.” Students could
even come in on weekends to perform cleaning work. The students’ enrollment agreement with the
school does not promise any compensation for the services rendered in the salon
and the students did not expect any compensation for attending the school or to
be hired by the school following graduation.
Students could attribute the hours spent performing these
tasks towards their practical hours graduation requirements and were sent home
from school for the day (delaying their graduation) if they refused to perform
them. They received academic credit for
performing these tasks. The time spent
performing these tasks varied widely, from 30 minutes to four hours per
day. These tasks were not required by
the state and are not mentioned in the school’s curriculum (other than general
sanitation). The students are never
graded on how they perform these cleaning tasks.
In the litigation, the plaintiffs sought summary judgment on
their entitlement to compensation for the time spent performing general
cleaning and janitorial tasks. The trial
court found that the school was taking advantage of the students and held that
they were entitled to be compensated for the time spent performing the cleaning
and janitorial tasks. The Sixth Circuit,
while agreeing that the trial court should focus on the particular tasks being
challenged instead of the parties’ entire relationship, reversed on the grounds
that the trial court applied the incorrect analysis and failed to consider a
number of factors which could affect the conclusion.
When analyzing FLSA claims brought by students of vocational
schools, the Court had previously held that ” “the proper approach for
determining whether an employment relationship exists in the context of a
training or learning situation is to ascertain which party derives the primary
benefit from the relationship.” Solis
v. Laurelbrook Sanitarium & Sch., Inc., 642 F.3d 518, 529 (6th Cir. 2011).
But before reaching the primary-beneficiary analysis in this case, we must answer two questions. First, do we apply the primary-beneficiary test at all when the work at issue is not part of the school’s educational curriculum? Second, given that the students claim an entitlement to compensation for some, but not all, of the work they performed during the course of the vocational program, do we apply the primary-beneficiary test to only that targeted segment of the program at issue or to the educational program as a whole? As we explain below, the Laurelbrook test governs this case and applies only to the activities at issue in the claim for compensation.
The trial court had determined that the cleaning and
janitorial activities were not sufficiently related to the classroom
instruction and therefore were not exempt from the FLSA. The Sixth Circuit disagreed.
Its error stems from its central premise for departing from Laurelbrook’s test: that the activities at issue are “not within the training or learning situation.” Id. at 645. To be sure, the janitorial tasks assigned to the plaintiffs were not a part of [the school’s] written curriculum, not required by the state regulations governing cosmetology education, and not directly supervised by instructors. But other aspects of the relationship between [the school] and its students lead us to conclude that the janitorial work took place within the educational context, regardless of its ultimate educational benefit. The students were in the salons as part of the educational program, were assigned the tasks at issue by the same instructors who oversaw their practical training, received academic credit for the time spent on the tasks, and were told that they would be sent home—potentially delaying their graduation from the school—if they failed to complete the assigned tasks. We therefore conclude that the tasks spring from the students’ relationship with [the school], meaning that we must analyze this FLSA claim related to those tasks under the primary-beneficiary test as laid out in Laurelbrook.
The Court then concluded that the primary-beneficiary test
should be applied only to the discrete tasks being challenged instead of to the
parties’ entire relationship. In Laurelbrook, the court had previously
only examined the challenged tasks instead of the entire relationship of the
parties. Similarly, in other context,
the FLSA has utilized analyses which separate tasks performed by an employee in
determined whether they are exempt. For
instance, employees may volunteer for their non-profit employer in a
different context from their regular job.
Similarly, paid firefighters may volunteer as firefighters and EMS for
different units.
The Court found that its approach
rejects claims for compensation where the school receives an incidental benefit from a student’s work as part of the educational program. But it allows for the possibility of compensation for labor that—although related to the educational relationship in an attenuated way—does not actually provide a benefit to students that exceeds the benefit of free labor received by the school.
NOTICE: This summary is designed merely to inform and alert
you of recent legal developments. It does not constitute legal advice and does
not apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
