Eberline v. Douglas J. Holdings, Inc.

339 F. Supp. 3d 634
CourtDistrict Court, E.D. Michigan
DecidedOctober 1, 2018
DocketCase No. 14-cv-10887
StatusPublished
Cited by2 cases

This text of 339 F. Supp. 3d 634 (Eberline v. Douglas J. Holdings, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eberline v. Douglas J. Holdings, Inc., 339 F. Supp. 3d 634 (E.D. Mich. 2018).

Opinion

JUDITH E. LEVY, United States District Judge *636Three former students at defendants' cosmetology schools brought this putative class and collective action under the Fair Labor Standards Act ("FLSA") and state law. They allege that when they clean, do laundry, and restock products during the clinical training portion of defendants' curriculum, they are employees entitled to compensation. The key issues in this case are whether the plaintiff students or the defendant schools are the primary beneficiary of their relationship with one another, and whether certain tasks the students are required to complete-such as cleaning the clinic, classrooms, and breakroom; doing the laundry; and restocking the products-are so far beyond the scope of their education that the tasks cannot fairly be considered a part of the training.

The Court is now presented with cross-motions for summary judgment. Plaintiffs bring a motion for partial summary judgment, seeking a determination that they are employees when they perform the aforementioned tasks. Defendants bring a motion for summary judgment, arguing that all of the students' claims must fail because they are students and not employees within the meaning of the FLSA.

For the reasons set forth below, plaintiffs' motion for partial summary judgment is granted, and defendants' motion for summary judgment is denied in part. In light of the fact that plaintiffs clarified during oral argument that they are only seeking employee status for time spent on cleaning, doing laundry, and restocking products, there is no dispute on the remainder of the time spent in the clinic. Therefore, defendant's motion for summary judgment as to the remaining time and the other portions of the parties' relationship is granted in part.

I. Background

Plaintiffs are three former cosmetology students at defendants' schools. Joy Eberline attended defendants' Ann Arbor school and graduated in 2012. Cindy Zimmermann attended defendants' Grand Rapids institute part-time and also graduated in 2012. Tracy Poxson graduated from defendants' East Lansing school in 2013. Each passed the state cosmetology licensing exam after graduating.

Defendants are four companies owned and operated by individual defendants Scott Weaver, T.J. Weaver, and Kristi Bernhardt. Scott and T.J. Weaver are the only directors of the defendant companies. Scott Weaver is the defendant with primary decision-making authority over the companies. (Dkt. 60-4 at 14-16.) He also serves on the Michigan Board of Cosmetology. (Dkt. 60-4 at 8.) Kristi Berhnhardt was the Chief Financial Officer of the corporate defendants during the time period at issue in this litigation.

The four corporate defendants are Douglas J. Institute, Douglas J. AIC, Douglas J. Exchange, and Douglas J. Holdings, Inc. Douglas J. Institute, Inc. operates cosmetology schools in Ann Arbor, East Lansing, Grand Rapids, and Royal Oak, Michigan, as well as Knoxville, Tennessee. (Dkt. 60-3 at 2.) Douglas J. AIC, Inc. operates an additional cosmetology school in Chicago, Illinois. (Dkt. 60-4 at 14.) Douglas J. Exchange, Inc. operates salons in Ann Arbor and Rochester Hills, Michigan. (Id. at 31.) Douglas J. Holdings, Inc. owns each of the other defendant companies. (Dkt. 60-5.) Defendants Scott and *637T.J. Weaver each own half of Douglas J. Holdings, Inc. (Dkt. 60-6.)

Defendants' businesses are for-profit companies from which the Weaver defendants earn a considerable amount of money. For example, Douglas J. Institute earned a net profit of over $1.5 million each year between 2010 and 2014. (Dkt. 69-1.) The revenue driving this profit comes from tuition, kit sales,1 beauty product sales, and salon services sales to the public. (Dkt. 69-2 at 2; Dkt. 69-3 at 2.) Students are charged $17,850 for the full-time program and $17,000 for the part-time program, inclusive of the kit fee. (Dkt. 60-23; Dkt. 60-26.) The companies are set up such that the net profit flowed through Douglas J. Holdings to Scott and T.J. Weaver as income. (Dkt. 60-15 at 6.)

At the time, defendants employed various types of workers as part of their business model. One type of worker defendants employed was support staff. The support staff were broken into two positions: aesthetics and guest services. Defendants employed aesthetics personnel "to consistently ensure the Institute is kept clean and materials including towels and products are always available." (Dkt. 61 at 2.) These employees were primarily responsible for "keeping the place clean throughout the course of the day, [and] helping keep up with things such as laundry, any dishes, [and] cleaning." (Dkt. 60-4 at 19.) The printed job description for aesthetics personnel informed potential new hires that the role required "sweeping, dusting, polishing, window cleaning[,] shelf cleaning[,] ... load[ing] and unload[ing] [the] dishwasher[,] ... ensur[ing] [the] back-bar and stock areas are clean and tidy[,] [and] other general cleaning tasks as assigned." (Dkt. 61.)

The other support staff role in defendants' operations was guest services personnel. The guest services team primarily staffed the front desk to greet and assist clients when they came in the door. (Dkt. 60-34 at 5.) They were also responsible for keeping the waiting area "clean and tidy." (Dkt. 60-4 at 23.) The guest services training manual instructed staffers to "come out from behind the desk and hold doors, dust shelves, vacuum rugs, [and] clean windows" when they have down time. (Dkt. 60-47 at 4.) They were also expected to perform hourly "aesthetic checks," in which they would tend to guests and "vacuum all rugs (including elevator) and clean the glass at all sets of doors." (Id. at 5.)

The work of the support staff was bolstered by a nighttime janitorial service. Defendants hired Daenzer Building Services to clean the facilities six nights each week. (Dkt. 60-34 at 19.)

In addition to support staff, defendants employed licensed cosmetology instructors. (Dkt. 60-4 at 19.) These individuals had both a state-issued cosmetology license and a state-issued cosmetology instructor's license (Dkt. 60-34 at 8), and they oversaw the cosmetology students' time in the clinic and in the classroom. (Id. at 9.) Each time a student saw a client in the clinic, the appointment would begin with a consultation between the student, the instructor, and the client to ensure the student provided the client with all of the services the client sought. (Id. ) When the student finished, the instructor would review the student's performance to ensure it was adequate. (Id. )

The instructors also oversaw the work of student instructors. Student instructors are licensed cosmetologists who have returned to school to obtain an additional *638license to teach cosmetology. (Id. at 11.) They were not paid for their time on the floor2 and were expected to work hand-in-hand with the instructors to oversee the cosmetology students in the clinic. (Id. at 12.) Occasionally, a student instructor supervised the cosmetology students in lieu of a licensed instructor. (Dkt. 60-27 at 42.)

The instructors and student instructors supervised the cosmetology students' time in the clinic according to defendants' curriculum, which was based on Michigan state requirements for licensing cosmetologists.

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Related

Joy Eberline v. Douglas J. Holdings, Inc.
982 F.3d 1006 (Sixth Circuit, 2020)
Stansbury v. Faulkner
W.D. Tennessee, 2020

Cite This Page — Counsel Stack

Bluebook (online)
339 F. Supp. 3d 634, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eberline-v-douglas-j-holdings-inc-mied-2018.