## Facts

- Plaintiffs were cosmetology and hair-design students at Marinello Schools of Beauty in California and Nevada, operated for profit by B & H Education, Inc.
- The school provided classroom instruction and required clinical training in school-run salons that offered discounted services to the public.
- Students performed cosmetology services and non-technical tasks (e.g., cleaning and sanitation-related work) during clinic hours and were not paid.
- State licensing regimes in California and Nevada required substantial clinical hours and included sanitation and maintenance responsibilities as part of training; constant supervision of client work was not required by state regulation.
- Students enrolled to obtain the training and hours necessary to qualify for state licensing exams and understood they would not be compensated for clinical work.
- Plaintiffs alleged that significant time spent on menial and sometimes unsupervised tasks made them employees entitled to wages.

## Issues

1. Whether cosmetology students performing unpaid clinical and salon work at a for-profit school are “employees” under the FLSA.
2. Whether the students are “employees” entitled to wages under California and Nevada wage-and-hour law in light of those states’ cosmetology licensing schemes.
3. Whether the district court abused its discretion under Federal Rule of Civil Procedure 37 by striking certain student declarations as a discovery sanction.

## Decision

- The Ninth Circuit affirmed summary judgment for the school on the FLSA claims, holding the students were not employees.
- The Ninth Circuit affirmed summary judgment for the school on the California and Nevada wage-and-hour claims, holding the students were not employees under those laws in this educational/licensing context.
- The Ninth Circuit affirmed the Rule 37 sanction striking certain student declarations, finding no abuse of discretion and no material effect on the summary judgment outcome.

## Legal Principles

- In the student worker/intern context under the FLSA, employee status is determined under the economic-reality framework using a flexible “primary beneficiary” analysis focused on who primarily benefits from the relationship.
- Where students’ clinical work is tied to educational objectives and licensing requirements (including required hours and sanitation training), and the students receive the principal benefit of qualifying for licensure, the students are not employees for FLSA wage purposes.
- Performance of non-technical or menial tasks does not, by itself, convert students into employees when those tasks are part of required clinical training and licensure preparation.
- State wage-and-hour “employee” determinations may be informed by state statutory and regulatory schemes that presuppose unpaid clinical training as a component of cosmetology education and licensure qualification.
- A district court’s decision to strike evidence under Rule 37 is reviewed for abuse of discretion; exclusion is upheld where the sanction is within the court’s discretion and the excluded material would not materially affect summary judgment.

## Conclusion

The court held that cosmetology students’ unpaid clinic work at a for-profit school did not create an employment relationship under the FLSA or under California and Nevada wage laws because the students were the primary beneficiaries of the training required for licensure, and it also upheld the exclusion of late or improper declarations under Rule 37.


Benjamin v. B & H Educ., Inc., 877 F.3d 1139 (9th Cir. 2017)