A development in the ongoing litigation regarding the scope of the term “employee” for purposes of the Fair Labor Standards Act involves a rash of cases filed against beauty schools. In these cases, students who provide services to customers as part of their training allege they should be compensated for such work. A New Jersey federal court recently rejected such a claim, citing the regulatory scheme surrounding operation of the bona fide beauty school, and the purpose of such a vocational program. Atkins v. Capri Training Ctr., 2014 U.S. Dist. LEXIS 139989 (D.N.J. Oct. 1, 2014).
In Atkins, the court rejected plaintiff’s claim that while enrolled in Defendants’ beauty school she was an employee who essentially cut hair for patrons, entitling her to minimum wage protection. The court did not credit plaintiff’s evidence that the school profited from her work (which the school contested), but did not rest its determination on that evidence, opining that even if “Defendants were making a profit from the Clinic services, Defendants may be violating the Board’s regulations; but the existence of profitability, in and of itself, would not create an employer/employee relationship. Rather, the economic realities test focuses on dependency, the expectation of continued work, and a common sense view of the underlying facts and circumstances.”
Atkins reflects only the views of one federal District Judge in New Jersey (within the Third Circuit), but it is an encouraging ruling for vocational programs, which are not limited to beauty training programs, confronted with similar claims.