Latest Case: Eberline v. Douglas J. Holdings, Inc. (Education Law)

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Eberline v. Douglas J. Holdings, Inc.

Docket: 19-1781

Opinion Date: December 17, 2020

Judge: R[ansey] Guy Cole, Jr.

Areas of Law: Education Law, Labor & Employment Law

The plaintiffs attended licensed Michigan cosmetology schools, each of which includes a clinic salon where students work toward the state’s 965-hour practical experience requirement. The salons are open to the public. Customers pay for beauty services provided by students and can purchase products available in the salon. The schools profit from the salons. Students are not compensated for their time. When not working on clients, students wash and fold towels, clean the studio, and perform other janitorial jobs. Students receive academic credit for the time spent on such tasks. The plaintiffs sued, seeking compensation under the Fair Labor Standards Act. The district court granted the plaintiffs partial summary judgment, holding that they were owed compensation for certain cleaning work. The Sixth Circuit held that the district court properly focused on the specific work for which plaintiffs seek compensation, rather than on the entirety of the training program, but failed to correctly apply circuit precedent governing FLSA claims in an educational setting. On remand, the court must apply the primary-beneficiary test. Where students in a training environment seek compensation for some of the work they perform during the educational relationship, the court should consider that the students received academic credit and should evaluate the relationship between the challenged activities and the curriculum. Among the specific factors to be considered: the lack of expectation of payment; the educational value of the tasks under scrutiny; the displacement of paid employees, and the school’s competitive benefit.