Eberline v. Douglas J. Holdings, Inc.

982 F.3d 1006

Joy EBERLINE; Tracy Poxson; Cindy Zimmermann, Plaintiffs-Appellees,

v.DOUGLAS J. HOLDINGS, INC. ; Douglas J. AIC, Inc. ; Douglas J. Exchange, Inc. ; Douglas J. Institute, Inc.; Scott A. Weaver ; TJ Weaver, Defendants-Appellants.

No. 19-1781

United States Court of Appeals, Sixth Circuit.

Argued: May 5, 2020

Decided and Filed: December 17, 2020

Rehearing En Banc Denied February 9, 2021

COLE, Chief Judge.

Plaintiffs Joy Eberline, Tracy Poxson, and Cindy Zimmermann are former cosmetology school students who sued defendants Douglas J. Holdings, Inc., Douglas J AIC, Inc., Douglas J. Exchange, Inc., Douglas J. Institute, Inc., Scott Weaver, and T.J. Weaver (collectively, "Douglas J"), the operators of the Michigan cosmetology schools that the plaintiffs previously attended. The plaintiffs claim that Douglas J owes them compensation under the Fair Labor Standards Act ("FLSA") for work performed during their time in school. The district court granted summary judgment to the plaintiffs on a subset of their claims, holding as a matter of law that the plaintiffs were owed compensation under the FLSA for certain cleaning and janitorial work they were required to complete during their time as students at Douglas J.

We determine that the district court properly focused its partial summary judgment analysis on the specific work for which plaintiffs seek compensation, rather than on the entirety of the vocational training program in which plaintiffs participated. It failed, however, to correctly apply our decision in Solis v. Laurelbrook Sanitarium & School, Inc. , which governs FLSA claims in an educational setting. See 642 F.3d 518, 529 (6th Cir. 2011). We therefore reverse the district court's order granting summary judgment to the plaintiffs and remand for proper application of Laurelbrook to the work at issue.

I. BACKGROUND

A. Michigan's Regulation of Cosmetologists

We begin by recounting the complex regulatory structure that Michigan imposes upon cosmetologists and the schools that train them. Michigan law requires people to obtain a license before they can perform cosmetology services for the public. See Mich. Comp. Laws § 339.1203a(1). Specifically, the law prohibits people from performing "any form of cosmetology services, with or without compensation, on any individual other than a member of his or her immediate family without a license." Id. Those services include hair care, skin care, manicuring, and electrology. Id. § 1201(d), (f). To be licensed, a person must meet several requirements. He or she must be at least 17 years old and of good moral character, have at least a ninth-grade education, complete either a 1,500-hour course of study in a school of cosmetology or a two-year apprenticeship at a licensed cosmetology establishment, and pass a licensing examination. Id. § 1207.

Cosmetology schools themselves must also be licensed. Id. § 1203b. To maintain its license, a cosmetology school must meet several requirements, including that it must follow a state-mandated curriculum. Id. § 1205. The distribution of instruction time included in a school's 1,500-hour cosmetology curriculum is set by state regulation. See Mich. Admin. Code R. 338.2161. The curriculum must include 425 hours of classroom instruction on theory, 965 hours of practical experience, and 110 hours that are not assigned to any specific topic. Id. Both the theoretical and the practical hours are further controlled in that they must be divided between several different cosmetology topics such as facials, manicuring and pedicuring, hairdressing, and hair coloring, as prescribed by regulation. Id.

B. Douglas J's Cosmetology Schools

Douglas J operates licensed cosmetology schools in Michigan. The plaintiffs in this case attended Douglas J's Ann Arbor, Grand Rapids, and East Lansing schools. At each school, Douglas J has classrooms that are used for theoretical instruction and operates a clinic salon where students work towards the 965-hour practical experience requirement set by the state. The clinic salons aim to "emulate a true salon setting," with "numerous styling stations ... and a complete skin and nail spa." (Acad. Catalogue of Douglas J, R. 21-8, PageID 312.) The salons are open to the general public, and customers pay for beauty services provided by students under the tutelage of Douglas J's instructors. The salons also have a retail floor where apparel, tools, merchandise, skin and hair care products, makeup, and other products are available for sale. Douglas J's curriculum materials state that this retail floor "gives students the opportunity to enhance their product knowledge and retail sales abilities—skills essential to a successful career in the beauty and wellness industry." (Id. )

Only students perform cosmetology services for customers in the salons, doing so under the supervision of licensed instructors. The instructors assist and observe the students working in the salon in order to evaluate their performance and ensure that the customers receive the service for which they paid. Ultimately, the students are graded for their work in the salon based on the technical execution of the service performed and the customer service experience provided.

Students sign an enrollment agreement with the school that does not include any mention of students being compensated for any of their time spent in salons, or for any other portion of their relationship with Douglas J. The plaintiffs in this case did not expect to be paid by Douglas J during their time at the school. The students also did not have an expectation of employment with Douglas J upon the completion of their educational training and knew that they would be responsible for finding employment as a cosmetologist after graduating.

Although students are not paid for their time in the salons, Douglas J does make a profit from the salons. These profits come from tuition paid by students, products purchased as required equipment by students, beauty products sold to customers in salons, and sales from salon services to the public. Douglas J employs the aforementioned licensed instructors and other guest-services personnel and also contracts with a janitorial service. Among the guest services personnel employed by Douglas J are aesthetics workers who are expected to sweep, dust, and polish the salons; clean and stock the shelves; clean windows; and generally keep the school clean.

C. Cleaning and Janitorial Activities

Students are scheduled to work in the salons during set times, during which they may not always have a customer to work with. Douglas J provides its instructors with a list of acceptable activities to assign to students during such times. Some of these tasks appear to be related to the training of students for a career in cosmetology. Those activities include working on techniques using mannequins, assisting fellow students who are working with customers, and working on group projects with other students. Other tasks may be less related to the school's purpose. 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.

Testimony from the students provides additional insight into the nature of these general cleaning and janitorial tasks. Eberline explained that students were required to wash, sort, and fold towels; sweep and dust the studio; clean glass surfaces; clean the break room microwave; and perform other jobs as needed. She added that students would not be permitted to leave until every station in the studio (not just the station used by the student) was so clean that "you could eat off of it pretty much." (Eberline Dep., R. 60-27, PageID 2325.) Poxson testified that students also were required to clean the break room, stock product shelves, and maintain shampoo and wax stations. She further described how students who were behind on their hours could also come in on days when the salon was closed to customers and help give the salon and classrooms a "deep cleaning." (Poxson Dep., R. 60-28, PageID 2404.) Zimmermann explained that students would empty the trash and clean the boards, tables, and floors in the school's classrooms as well. Instructors were encouraged to assign students these janitorial tasks and Douglas J's president testified that a student who refused to perform these tasks would be sent home for the day, denying that student of the opportunity to gain additional hours toward his or her state-imposed requirement on that day and necessitating that the student make up the hours on another day.

The amount of time spent on these activities varied by student. Eberline estimated that she spent a half-hour on these tasks each day, and nearly four hours on slower days. The plaintiffs extrapolate Eberline's estimates to conclude that she spent roughly 348 hours on these tasks over the course of her time at Douglas J. Using similar methods, they estimate that Poxson spent 304 hours doing these tasks and that Zimmermann spent at least 150 hours.

The plaintiffs argue that the cleaning and janitorial activities are not included in Douglas J's curriculum or in the state requirements for cosmetology schools.¹ Moreover, Douglas J does not provide classroom instruction on these tasks or supervise students as they perform them as it does for curriculum-related activities in the salons, because, unlike other tasks in the salon, student performance on these activities is not graded by Douglas J's instructors. To the extent that students did not complete the cleaning and janitorial tasks, they fell to paid workers.

Students, however, received academic credit for the time spent on these tasks in the sense that the time went toward their total hours of practical experience required for graduation. Eberline testified that the students’ logs for their hours—which specify how many hours were spent on particular tasks—did not include a...