From time to time, the Second Circuit puts further gloss on the legal doctrine that says some entities do not have to pay their interns any salary. This case falls under that category. The Second Circuit says a student at a for-profit cosmetology school who had to perform barbering and other cosmetology services to the public at discounted prices.
The case is Velarde v. GW GJ, Inc., decided on February 5. The seminal case in this area is Glatt v. Searchlight Pictures, 811 F.3d 528 (2d Cir. 2015), which says the intern is not entitled to any compensation under the Fair Labor Standards Act if the intern is the "primary beneficiary" of the relationship. If the intern's employer is the "primary beneficiary" of the relationship, then the entity is an employer under the FLSA and the intern has to receive compensation.
Velarde is the lead plaintiff in a potential class action. After finishing eight weeks in the classroom, plaintiff worked at the salon run by the school, performing cosmetology services for the public. He also had to perform janitorial and clerical work. Under state law, to offer cosmetology services in New York, you have to complete 1,000 hours of coursework in various subject areas, like hair styling and presumably shampoo, like the beauty school dropout in Grease.
Plaintiff said the beauty school was the primary beneficiary of the relationship because it derived revenue from the work he performed for paying customers. He says that any training and skills he received from providing those services are "besides the point." The Second Circuit (Cabranes, Carney and Caproni [D.J.]) disagrees. The Court first holds that the "primary beneficiary" test applies in cases involving vocational schools or vocation-related programs. It then holds that plaintiff was the primary beneficiary of this relationship because he received significant benefits from his work at the Salon, as he was required to complete 1,000 hours of coursework, and he did so under the supervision of the school's instructors. And the school actually had plaintiff work exactly 1,000 hours, consistent with state licensing requirements. While plaintiff says he also performed clerical and janitorial duties, the Second Circuit has already held that relatively menial or repetitive tasks may legitimately comprise part of the intern relationship for which the intern receives no pay. And, while plaintiff points out the Salon earned money from his cosmetology work, "the Academy has no obligation not to turn a reasonable profit on its operations" and "this is not a case in which a business uses the facade of a vocational school to deceive students into working unexpectedly long hours without compensation, replacing the labor of its paid employees, or working hours well beyond long-standing state requirements."