Ninth Circuit Concludes Cosmetology Students Are Not Employees Of School

On December 18, 2017, the Ninth Circuit held in Benjamin v. B&H Education, Inc., F.3d, No. 15-17147, 2017 WL 6460087, that cosmetology students were not employees of their schools. In doing so, the Ninth Circuit joined the Second and Eleventh Circuits in adopting the primary beneficiary test to determine whether students are employees. The Benjamin case was the first to reach a decision from the Ninth Circuit and joined many other jurisdictions that had previously dismissed virtually identical cases (including a recent affirmance of summary judgment by the U.S. Court of Appeals for the Seventh Circuit).

The Benjamin plaintiffs were former students who alleged that under federal, California and Nevada law, they should have been paid wages as employees for the time they spent practicing skills in the schools' clinic classroom and performing concierge duties (e.g., cleaning, sanitizing, greeting clients, recommending hair products, etc.). U.S. District Judge Vince Chhabria for the Northern District of California granted summary judgment for the school, holding that "Plaintiffs were not employees under federal or state law because Plaintiffs were the primary beneficiaries of the educational program and they had not shown that [the cosmetology school] subordinated the educational function of its clinics to its own profit-making purposes." [Note: Duane Morris represented B&H Education in this case in the Northern District of California.]

The Ninth Circuit affirmed. With regard to the federal claims, the Benjamin court concluded that "the primary beneficiary test best captures the Supreme Court's economic realities test in the student/employee context." In doing so, the court rejected the Department of Labor's intern test as being "too rigid" and not in accord with case law. The Ninth Circuit then looked to nonexhaustive factors to conclude the students were not employees. Such factors included that: 1) no students had expected to be paid, 2) students "received hands-on training in the clinic and academic credit for the hours they worked," 3) the "clinical work corresponded to [the students'] academic commitments," 4) the students did not participate in the clinic program longer than was required by state...