ATKINS v. CAPRI TRAINING CENTER, INC. et al

Filing 40

OPINION fld. Signed by Judge Susan D. Wigenton on 10/1/14. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

APRIL ATKINS,

Civil Action No. 2:13-cv-06820 (SDW)
Plaintiff,

v.

OPINION

CAPRI TRAINING CENTER, INC. d/b/a
CAPRI INSTITUTE, and MUENSTERSINTON,

October 1, 2014

Defendants.

WIGENTON, District Judge.
Before this Court are Defendants Capri Training Center, Inc. (“Capri”) and Anne. E.
Muenster-Sinton’s (“Muenster-Sinton”) (collectively referred to as “Defendants”) and plaintiff
April Atkins’s (“Atkins” or “Plaintiff”) filings regarding the following six pending motions: 1)
Motion to Conditionally Certify Collection Action and to Authorize Notice of Pendency and
Consent to Join (“Motion for Conditional Certification”); 2) Motion to Dismiss, which was
converted to one for Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure
56(c) (“Motion for Summary Judgment”); 3) Cross Motion to Stay (“Motion to Stay”); 4)
Motion to Strike Plaintiff’s April 25, 2014 Notice of Supplemental Authority (“Motion to
Strike”); 5) Motion to Strike Plaintiff’s July 31, 2014 Notice of Supplemental Authority
(“Motion to Strike II”); and 6) Cross Motion for Time to Conduct Discovery Pursuant to Rule
56(d) (“Cross Motion for Time to Conduct Discovery”).

1

This Court has jurisdiction pursuant to 28 U.S.C. § 1331. Venue is proper in this District
pursuant to 28 U.S.C. § 1391(b).

This Court, having considered the parties’ submissions,

decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78.
For the reasons set forth below, this Court GRANTS Defendants’ Motion for Summary
Judgment, DENIES the Cross Motion for Time to Conduct Discovery, and DENIES
Defendants’ Motions to Strike, Plaintiff’s Motion to Conditionally Certify, and Defendants’
Motion to Stay as moot.
BACKGROUND AND PROCEDURAL HISTORY
Capri is a for-profit corporation that includes beauty schools. (Compl. ¶ 10.) Atkins
attended one of four New Jersey licensed beauty schools owned by Capri. (Compl. ¶ 9; Def. Br.
1.) Muenster-Sinton owned and controlled Capri Institute and the Capri Training Centers.
(Compl. ¶ 71.) While she was a student, Atkins worked at Capri’s clinic (“the Clinic”) in Clifton,
NJ, and provided services for paying customers in an effort to satisfy her statutorily required
clinical training for a license in cosmetology. (Compl. ¶¶ 61, 66.) Atkins also performed
“janitorial, clerical, [and] logistical functions that were essential and necessary” to the Clinic’s
continued operation. (Compl. ¶ 68(d); Defs.’ Statement of Undisputed Facts Pursuant to Local
Rule 56.1 (“Defs.’ Facts”) ¶ 15.) Atkins logged over 500 hours at the Clinic and did not get paid
for services rendered. (Compl. ¶¶ 5, 66.) According to her academic record, Atkins attended
class for 27.5 hours per week. (Defs.’ Facts ¶ 16.) On August 3, 2012, Atkins completed the
training program at Capri and obtained her New Jersey license to practice cosmetology. (Defs.’
Facts ¶ 5.)
Atkins alleges that she and other students performing similar tasks are considered
“employees” of Defendants under the Fair Labor Standards Act (“FLSA”) and/or New Jersey

2

State labor laws, and are therefore legally entitled to wages for services provided. (See generally
Compl. ¶¶ 4-5.)
Procedural History
On November 12, 2013, Atkins, individually and on behalf of similarly situated plaintiffs,
commenced this action against Defendants. (Compl. ¶ 1.) On January 7, 2014, Plaintiff filed the
Motion for Conditional Certification regarding the collection action and authorization notice of
pendency and consent to join. (Dkt. No. 3.) On January 31, 2014, Defendants filed a Motion to
Dismiss Plaintiff’s Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure
to state a claim upon which relief may be granted. (Dkt. No. 13.) On February 18, 2014,
Defendants filed opposition and a cross motion to stay Plaintiff’s Motion for Conditional
Certification until the resolution of the then pending Motion to Dismiss. (Dkt. No. 17.) On April
25, 2014, Plaintiff filed a notice of supplemental authority in support of Plaintiff’s opposition to
Defendants’ Motion to Dismiss. (Dkt. No. 25.) On May 15, 2014, Defendants responded by
filing a Motion to Strike the supplemental authority. (Dkt. No. 26.) On June 10, 2014, this
Court converted Defendants’ pending Motion to Dismiss to one for summary judgment, and
subsequently the parties filed additional briefs regarding the Motion for Summary Judgment.
(Dkt. No. 30.) On June 24, 2014, Plaintiff filed opposition to the Motion for Summary Judgment
and a Cross Motion for Time to Conduct Discovery.

On July 7, 2014, Defendants filed

opposition. On July 31, 2014, Plaintiff filed a notice of additional supplemental authorities, and
on August 8, 2014, Defendants filed the Motion to Strike II to strike the supplemental authority
submitted on July 31, 2014. On August 12, 2014, Plaintiff’s filed opposition to the Motion to
Strike II, and on August 26, 2014, Defendants filed a reply to that motion.

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LEGAL STANDARD
Motion for Summary Judgment (Upon Conversion from Motion to Dismiss)
Pursuant to Federal Rule of Civil Procedure 12(d) “[i]f, on a motion under Rule 12(b)(6)
or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion
must be treated as one for summary judgment under Rule 56. All parties must be given a
reasonable opportunity to present all the material that is pertinent to the motion.” Fed. R. Civ. P.
12(d). The court has complete discretion to accept such materials beyond the pleadings. See In
re Kiwi Intern. Air Lines, Inc., 344 F.3d 311, 315 n.3 (3d Cir. 2003); Wright & Miller, Federal
Practice and Procedure: Civil 2d § 1366, at 491 (1990). However, should it so choose, the court
is required to convert the motion to one for summary judgment and provide the parties notice and
a reasonable opportunity to present all relevant material.

See, e.g., In re Rockefeller Ctr

Properties Sec. Litig., 184 F.3d 280, 287-89 (3d Cir. 1999); Rose v. Bartle, 871 F.2d 331, 339-43
(3d Cir. 1989).
Summary judgment is appropriate where the movant establishes that “there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). A factual dispute between the parties will not defeat a motion for summary
judgment unless it is both genuine and material. See Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 247–48 (1986). A factual dispute is “genuine” if “the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.” Id. at 248. The dispute is not “genuine” if it
merely involves “some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). A factual dispute is “material” if it “might
affect the outcome of the suit under the governing law.” Anderson, 477 U.S. at 248.

4

The moving party bears the burden to prove that if the evidentiary material of record
were reduced to admissible evidence in court, it would be insufficient to permit the nonmoving
party to carry its burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Once
the moving party meets its initial burden, the burden then shifts to the nonmovant who must set
forth specific facts showing a genuine issue for trial and may not rest upon the mere allegations,
speculations, unsupported assertions or denials of its pleadings. Shields v. Zuccarini, 254 F.3d
476, 481 (3d Cir. 2001). “The nonmoving party must go beyond the pleadings and, by affidavits
or other evidence, designate specific facts showing that there is a genuine issue for trial.” Ivan v.
Cnty. of Middlesex, 595 F. Supp. 2d 425, 447 (D.N.J. 2009) (citing Celotex, 477 U.S. at 324);
Fed. R. Civ. P. 56(e). “Conclusory statements, general denials, and factual allegations not based
on personal knowledge [are] insufficient to avoid summary judgment.” Olympic Junior, Inc. v.
David Crystal, Inc., 463 F.2d 1141, 1146 (3d Cir. 1972)(internal citations omitted).
“In considering a motion for summary judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence; instead, the non-moving party’s
evidence ‘is to be believed and all justifiable inferences are to be drawn in his favor.’” Marino v.
Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255).
Further, the nonmoving party is required to “point to concrete evidence in the record which
supports each essential element of its case.” Black Car Assistance Corp. v. New Jersey, 351 F.
Supp. 2d 284, 286 (D.N.J. 2004). If the nonmoving party “fails to make a showing sufficient to
establish the existence of an element essential to that party’s case, and on which . . . [it has] the
burden of proof,” then the moving party is entitled to judgment as a matter of law. Celotex, 477
U.S. at 322-23.

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Conditional Collective Action Certification
The Third Circuit has stated that “conditional certification is not really a certification. It
is actually the district courts exercise of [its] discretionary power, upheld . . . to facilitate the
sending of notice to potential class members, and is neither necessary nor sufficient for the
existence of a representative action under [the] FLSA.” Zavala v. Wal Mart Stores Inc., 691 F.3d
527 (3d 2012) (internal citation and quotation marks omitted); Adami v. Cardo Windows, Inc.,
CIV. 12-2804 JBS/JS, 2014 WL 320048 at *7 (D.N.J. Jan. 29, 2014); Symczyk v. Genesis
HealthCare Corp., 656 F.3d 189, 194 (3d Cir.2011).
A motion for conditional certification need not be ruled on immediately. See generally
Goldman v. RadioShack Corp., CIV.A. 2:03-CV-0032, 2003 WL 21250571 (E.D. Pa. Apr. 16,
2003). When a court is faced with the task of ruling on multiple motions, in the name of
administrative efficiency, the court may first address other pending motions before ruling on a
motion for conditional certification. Beery v. Quest Diagnostics, Inc., 12-CV-00231, 2013 WL
3441792 (D.N.J. July 8, 2013) (declining to rule on a motion to conditionally certify a collection
action until the pending motion to dismiss was resolved).
Motion to Stay
“[A] court has the discretion to stay a case if the interests of justice so require.” Forrest
v. Corzine, 757 F. Supp. 2d 473, 476 (D.N.J. 2010) (citing United States v. Kordel, 397 U.S. 1,
12 n.27 (1970)). However, the stay of a civil case is an extraordinary remedy, which requires the
court to balance competing interests. Ford Motor Credit Co. v. Chiorazzo, 529 F. Supp. 2d 535,
541-42 (D.N.J. 2008) (citing Landis v. N. American Co., 299 U.S. 248 (1936)); Walsh Sec., Inc.
v. Cristo Prop. Mgmt., Ltd., 7 F. Supp. 2d 523, 526 (D.N.J. 1998) (citations omitted). “The court
should consider whether the stay would prejudice the non-moving party and if it would further

6

the interest of judicial economy.” Hass v. Burlington Cnty, No. 08-1102 (JHR), 2009 WL
4250037 (D.N.J. Nov. 24 2009)(citing Chiorazzo, 529 F. Supp. 2d at 542 (denying the motion to
stay, concluding that the plaintiff would be prejudiced)). Additionally, the burden is on the
moving party to “make out a clear case of hardship or inequity in being required to go forward . .
. .” Landis, 299 U.S. at 255; CTF Hotel Holdings, Inc. v. Marriott Intern., Inc., 381 F.3d 131,
139 (3d Cir. 2004) (“The [moving] party must state a clear countervailing interest to abridge a
party’s right to litigate.”).
Motion for Additional Discovery Pursuant to Rule 56(d)
“By its very nature, the summary judgment process presupposes the existence of an
adequate record; therefore, the Supreme Court has explained that ‘any potential problem with . . .
premature [summary judgment] motions can be adequately dealt with under Rule 56([d]).”
Interstate Outdoor Adver. v. Zoning Bd. of the Twp. of Cherry Hill, 672 F. Supp. 2d 675, 677
(D.N.J. 2009) (quoting Catrett, 477 U.S. at 326)); Dowling v. City of Philadelphia, 855 F.2d
136, 139 (3d Cir. 1988) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). Federal
Rule of Civil Procedure 56(d) sets forth the procedure for a party who believes that additional
discovery is necessary before he can respond to a motion for summary judgment. Rule 56(d)
states:
If a nonmovant shows by affidavit or declaration that, for specified reasons, it
cannot present facts essential to justify its opposition, the court may:
(1) defer considering the motion or deny it;
(2) allow time to obtain affidavits or declarations or to take discovery; or
(3) issue any other appropriate order.
Fed. R. Civ. P. 56(d). The motion must be accompanied by a supporting affidavit specifying
“‘what particular information is sought; how, if uncovered, it would preclude summary
judgment; and why it has not previously been obtained.’” Pennsylvania Dep’t of Pub. Welfare v.
7

Sebelius, 674 F.3d 139, 157 (3d Cir. 2012) (quoting Dowling v. City of Philadelphia, 855 F.2d
136, 139 (3d Cir. 1988)); see also McKenna v. Healthease, Inc., -- Fed. App’x -- (3d Cir. July
15, 2014) (stating that a Rule 56(d) motion must state with specificity what information is being
sought); Interstate Outdoor Adver., 672 F. Supp. 2d at 677 (“[T]he party requesting a
continuance must first demonstrate how that discovery will create a genuine issue of material
fact.). 1
DISCUSSION
This Court will address each of the pending motions below.
Motion for Additional Time for Discovery
As an initial matter, this Court will first address the Cross Motion for Time to Conduct
Discovery. As a general rule, a “court is obliged to give a party opposing summary judgment an
adequate opportunity to obtain discovery.” Dowling, 855 F.2d at 139-40. However, a court may
deny such motions for discovery when the material sought would not be useful or the requests
are vague. See Duran v. Warner, No. 07-5994 (JBS), 2013 WL 4483518, at *5 (D.N.J. Aug. 20,
2013) (denying a continuance pursuant to Rule 56(d) when “[p]laintiff’s overbroad and vague
requests [were] not tailored to reveal any particular information” relating to defendant’s conduct,
and were “more akin to a fishing expedition designed to delay litigation”); Yocham v. Novartis
Pharm. Corp., 736 F. Supp. 2d 875, 879-880 (D.N.J. 2010) (rejecting a motion for further
discovery because the plaintiff failed to explain how the information sought would be useful to
oppose defendant’s motion for summary judgment).

1

Rule 56(d) was formerly Rule 56(f). See Superior Offshore Intern., Inc. v. Bristow Grp., Inc., 490 Fed App’x 492,
501 (3d Cir. 2012).

8

In the instant matter, Plaintiff requests a wide range of documents including, for example,
those related to the policy at Capri “requiring students to perform services on members of the
public in a salon setting”; the “policy of charging customers”; services offered; accounting
documents regarding profits and expenses incurred; “other” tasks “students were required to
perform in order to graduate”; the policy regarding “prohibiting students from practicing
cosmetology services on anyone but paying salon customers”; and the number of hours each
student worked. (Pl.’s Cross Mot. 15-16.) Additionally, Plaintiff also requested the following:
• Documents and/or testimonial evidence relating when, why, and
to what extent defendants implemented the policy of requiring
students to perform menial tasks unrelated to those skills required
to pass the state cosmetology exam or to practice cosmetology in a
beauty salon;
• Documents and/or testimonial evidence describing when and why
defendants implemented the policy of requiring students to
purchase their own equipment to use in defendants’ salons;
• Documents and/or testimonial evidence providing additional
insight regarding the relationship between defendants [and] their
students; and
• Documents and/or testimonial evidence regarding defendants’
purported “business” of training students to practice cosmetology,
including any evaluations thereof.
(Id. at 16.)

In total, Plaintiff included seventeen bulleted categories of materials (referring to
approximately 38 types of documents) in her request for discovery, which contains significant
overlap. As Defendants point out, several of the requested documents pertain to information
Plaintiff already has in her possession (such as what services students were required to perform).

9

Plaintiff’s vague and/or overbroad requests for documents are not sufficient for this Court
to grant additional time for discovery. See Malouf v. Turner, 814 F. Supp. 2d 454, 459-61 (3d
Cir. 2011) (“Vague or general statements of what a party hopes to gain through a delay for
discovery under Rule 56(d) are insufficient.” (citation omitted)). Further, Plaintiff has not
demonstrated that the information she seeks would support her claim. Atlantic Deli & Grocery
v. United States, No. 10-4363 (JBS/AMD), 2011 WL 2038758, at *3-4 (D.N.J. May 23, 2011)
(denying Rule 56(d) motion when the evidence sought was within the plaintiff’s possession, and
even information held by the defendant would not help in opposing summary judgment). Most
of the documents requested simply are not relevant to this Court’s inquiry in this matter. See
generally Taylor v. Hughes, 548 Fed. Appx. 822, 825 (3d Cir. 2013).
Additionally, the remainder of Plaintiff’s requests seek to support theories which were
not articulated in Plaintiff's Complaint, and thus would not impact the outcome of this suit. This
Court will not allow a fishing expedition for items not relevant to the analysis required in the
present matter. Plaintiff’s motion papers and submitted declaration do not provide an adequate
connection or explanation of how the discovery requested will support the allegations and
theories raised in the Complaint. As such, Plaintiff’s request for additional time for discovery
will be denied.
There is no genuine issue of material fact in dispute to preclude summary judgment. As
will be discussed below, even if Defendants did receive some profit, Plaintiff has not met the
necessary factors under the economic reality test or shown that the primary benefit of the
relationship was to Defendants. See generally Haybarger v. Lawrence Cnty. Adult Prob. &
Parole, 667 F.3d 408 (3d Cir. 2012); Solis v. Laurelbrook Sanitarium & Sch., Inc., 642 F.3d 518,
525 (6th Cir. 2011); Blair v. Wills, 420 F.3d 823, 829 (8th Cir. 2005).

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Next, the substantive matters before this Court regarding the Motion for Summary
Judgment will be addressed.
State Regulation of Cosmetology / Hairstyling Licensure
Generally, under New Jersey law, an individual may only render cosmetology or
hairstyling services if he or she is licensed to do so. N.J. Stat. Ann. § 45:5B-7. To obtain a
license to practice cosmetology or hairstyling, an individual must attend one of New Jersey’s
licensed beauty schools. See id. These beauty schools are regulated by the New Jersey State
Board of Cosmetology and Hairstyling (the “Board”). 2 See id. The Board statutorily mandates
students who are seeking licensure in cosmetology or hairstyling to complete a 1,200-hour
course. (Defs.’ Br. in Supp. of their Mot. to Dismiss (“Defs.’ MTD Br.”) 1.) The Board requires
that 849 of the 1,200 hours be in a clinical setting. (Id.) This clinical setting (a “clinic”) is
defined as “a designated portion of a licensed school in which members of the general public
may receive cosmetology and hairstyling services from registered students in exchange for a fee
which shall be calculated to recoup only the cost of materials used in the performance of those
services.” N.J. Stat. Ann. § 45:5B-3(h).
These clinics operate under very specific rules. See N.J. Stat. Ann. § 45:5B-14. For
example, clinics must expressly disclose to potential customers that they are beauty school
clinics and, accordingly, may not “[a]dvertise [or] operate … under another’s name or trade
name.” N.J. Stat. Ann. § 45:5B-14(b). In fact, “any school performing clinical work shall
display in a conspicuous place in the waiting room and senior room a sign readily visible and
legible, stating: SERVICES DONE HERE BY SENIOR STUDENTS ONLY.” N.J. Admin.
Code 13:28-6.27(a). “Senior Students,” defined by the Board as students who have completed at
least 600 of the 1,200 required hours for obtaining licensure, are exceptions to the general rule
2

Capri is also accredited by the National Accrediting Commission of Career Arts & Sciences.

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that only licensed individuals may render cosmetology or hairstyling services to the general
public. N.J. Stat. Ann. § 45:5B-7(f). Only Senior Students may provide services to customers at
clinics. Id. Accordingly, teachers, students who have not attained the rank of Senior Student, and
other professional cosmetologists cannot provide services at clinics. See id. Senior Students may
only provide services “from Monday to Saturday” and “during hours that do not conflict with
scheduled classes.” N.J. Admin. Code 13:28-6.27(e)-(f). For each service performed, Senior
Students receive credits towards graduation, and ultimately, licensure in cosmetology. 3 (Defs.’
Facts ¶ 9.) Furthermore, clinics are required to employ “a minimum of one licensed teacher for
every clinic area attended by up to 25 senior students” to ensure that the students are practicing
in a safe environment. N.J. Admin. Code 13:28-6.23(a)(1).
Whether an Employee / Employer Relationship Exists
The FLSA is the federal statute that regulates employment and fixes a minimum wage
that employers must pay employees. 29 U.S.C.A. § 201 et seq. Whether a trainee, apprentice,
student or learner is entitled to minimum wages turns on whether they were considered
“employees” under the FLSA. See generally Tony & Susan Alamo Found. v. Sec’y of Labor, 471
U.S. 290 (1985); Walling v. Portland Terminal Co., 30 U.S. 148 (1947). The determination of
whether an individual should be classified as an employee for purposes of the FLSA is a question
of law. Todaro v. Twp. of Union, 27 F. Supp. 2d 517, 533 (D.N.J. 1998). The FLSA defines the
term “employ” as “suffer or permit to work” and merely defines the term “employee” as “any
individual employed by an employer.” 29 U.S.C. § 203(e),(g). Because the FLSA and New
Jersey State labor laws use the same definitions of “employ” and “employee,” Plaintiff’s federal
and state claims rise and fall together. See N.J. Stat. Ann. § 34:11-56a1(f),(h); Thompson v. Real
Estate Mortg. Network, 748 F.3d 142, 147-48 (3d Cir. 2014). Accordingly, the same analysis
3

Defendants in this matter claim the Clinic is not a for profit salon business. (See Defs.’ SJ Br. 14).

12

can be used to determine whether an individual is considered an “employee” under the FLSA or
New Jersey labor laws. Rong Chen v. Century Buffet & Rest., No. 09-1687 (SRC), 2012 WL
113539 at *2-3(D.N.J. Jan. 12, 2012) (“The definitions for “employer” and “employee” under
the FLSA and [New Jersey Wage and Hour Law] are virtually identical.”); 29 U.S.C. §
203(d)(e); N.J.S.A. § 34:11–56a1(g),(h).
Although the other circuits vary in their treatment of the required analysis for
trainees/students, 4 the Third Circuit has utilized the “economic realities” test to assess the
existence of an employer/employee relationship under the FLSA. See Todaro, 27 F. Supp. 2d at
534; Davis v. Abington Mem’l Hosp., 817 F. Supp. 2d 556 (E.D. Pa. 2011) (denying summary
judgment when considering the meaning or employees versus volunteers); Haybarger v.
Lawrence Cnty. Adult Prob. & Parole, 667 F.3d 408, 418 (3d Cir. 2012) (addressing definition
of “employer” under the FLSA and the application of the economic reality test); Krause v.
Cherry Hill Fire Dist. 13, 969 F. Supp. 270, 274 (D.N.J. 1997) (discussing the economic realities
test regarding prior employees volunteer fire fighters and finding plaintiffs were employees;
however, noting that the economic realities test is of little guidance in distinguishing volunteers
from employees). 5 The Third Circuit has declined to extend this test to volunteers, and has not

4

See, e. g., Velez v. Sanchez, 693 F.3d 308, 330 (2d Cir.2012) (considering the primary recipient of benefits in the
FLSA context); Solis v. Laurelbrook Sanitarium & Sch., Inc., 642 F.3d 518, 525 (6th Cir.2011) (“[T]he ultimate
inquiry in a learning or training situation is whether the employee is the primary beneficiary of the work
performed.”); Blair v. Wills, 420 F.3d 823, 829 (8th Cir. 2005) (finding students’ chores at boarding school were not
work where they “were primarily for the students’ . . . benefit”); McLaughlin v. Ensley, 877 F.2d 1207, 1209 (4th
Cir. 1989) (“[T]he general test used to determine if an employee is entitled to the protections of the Act is whether
the employee or the employer is the primary beneficiary of the trainees’ labor.”)).
5
Despite the DOL’s efforts and guidelines, courts have not developed or utilized a uniform test to determine
whether a person is an “employee” under the FLSA. Therefore, other courts also seek guidance, in determining
whether an individual qualifies as an employee, from the Department of Labor’s Wage and Hour Administrator
(“WHA”). The WHA applies a six factor test—supposedly derived from Walling v. Portland Terminal—to
determine whether a trainee qualifies as an employee under the FLSA (all factors must apply in order for individual
not to be considered an employee):
(1) the training even though it includes actual operation of the facilities of the employer is similar to that
which would be given in a vocational school;

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spoken on whether the economic reality test applies to trainees/students. See Todaro, 27 F. Supp.
2d at 534.
Under the economic realities test, an employer/employee relationship exists if, as a matter
of economic reality, the entity functions as the individual’s employer. See Todaro, 27 F. Supp.
2d at 533-34; 51B C.J.S. Labor Relations § 1236. Courts should look to the economic realities of
the particular work environment and assess whether the alleged “employee” is economically
dependent upon the alleged “employer” for his livelihood. Davis, 817 F. Supp. 2d at 563; 51B
C.J.S. Labor Relations § 1236. Furthermore, a finding that the individual is dependent upon a
particular business or organization for his continued employment strongly suggests that an
employee/employer relationship exists. See Donovan v. DialAmerica Mktg., Inc., 757 F.2d 1376,
1385 (3d Cir. 1985). Throughout the assessment, courts should focus on the totality of the
circumstances. Haybarger, 667 F.3d at 418. Therefore, the assessment should be grounded on
economic reality, the underlying economic facts, and practical considerations rather than
technical concepts, legal classifications, or labels that the individual parties may have attached to
their relationship. See id.; 51B C.J.S. Labor Relations § 1236.
Several factors have been considered when determining whether an employer/employee
relationship exists under the economic realities test. These factors can include, for example,

(2) the training is for the benefit of the trainees;
(3) the trainees do not displace regular employees, but work under close observation;
(4) the employer that provides the training derives no immediate advantage from the activities of the
trainees, and on occasion his operations may actually be impeded;
(5) the trainees are not necessarily entitled to a job at the completion of the training period; and
(6) the employer and the trainees understand that the trainees are not entitled to wages for the time spent in
training
Kaplan v. Code Blue Billing & Coding, Inc., 504 Fed. App’x 831, 834-35, n.2 (11th Cir. 2013) (citing Wage and
Hour Div., U.S. Dep’t of Labor, Fact Sheet No. 71: Internship Programs Under the Fair Labor Standards Act 1
(2010)); see also Donovan v. Am. Airlines, Inc., 686 F.2d 267, 273 n.7 (5th Cir. 1982). But see Solis, 642 F.3d at 525
(6th Cir. 2011) (declining to apply WHA’s six factor test in training or educational setting because it is “overly rigid
and inconsistent with a totality-of-the-circumstances approach,” and instead utilizing a primary benefits test).

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1) the degree of the alleged employer’s right to control the manner
in which the work is to be performed; 2) the alleged employee’s
opportunity for profit or loss depending upon his managerial skill;
3) the alleged employee’s investment in equipment or materials
required for his task, or his employment of helpers; 4) whether the
service rendered requires a special skill; 5) the degree of
permanence of the working relationship; 6) whether the service
rendered is an integral part of the alleged employer’s business . . . .
Courts have repeatedly emphasized that this list is neither
definitive nor exclusive. The presence or absence of any of the
factors is not in and of itself dispositive.
Todaro, 27 F. Supp. 2d at 534 (citing DialAmerica, 757 F.2d at 1382) 6; see generally
Haybarger, 667 F.3d at 418.

Notably, the Third Circuit has not directly addressed the

applicability of the before mentioned factors in the context of whether students or trainees may
be considered employees under the FLSA. This Court utilizes the economic realities test for its
analysis, focusing on the totality of the circumstances and the economic facts. 7
Plaintiff puts forth two main arguments for why an employer/employee relationship
exists between she and Capri. First, Plaintiff alleges that she is an employee under the FLSA
because (1) Capri is “a for-profit enterprise [] where [Plaintiff’s] labor is essential” to its
operation and (2) the Clinic actually makes a profit. Despite Atkins’s argument, profitability
alone, or lack thereof, is not determinative when assessing the existence of an
employer/employee relationship under the economic realities test.
In this matter, Capri claims that the gross revenue generated by the Clifton area Clinic
totaled $41,416 during the 2012 fiscal year, and that amount does not include “cost of hair, nail,

6

Additionally, the Todaro court went on to state that “it is important to note that the factors outlined above have not
been developed for the purpose of distinguishing employees from volunteers, but rather are intended to measure and
balance the competing economic realities involved in an employee/independent contractor distinction. The economic
realities test presupposes a real economic exchange between the parties, and therefore is not as useful when
attempting to distinguish volunteers from employees, where “there is no economic relation to measure.” Todaro, 27
F. Supp. 2d at 534 (internal citations and quotation marks omitted).
7
This Court does recognize that under an analysis of the factors listed, Plaintiff would not be able to succeed at this
juncture. Additionally, even under a primary benefit analysis, which may consider similar issues to the factors
reviewed under the economic realities test, Plaintiff still would not be considered an employee under the FLSA.

15

face, body, or other products, nor does it take into account the cost of salaries for required
supervision in the Clinic, rent, utilities, etc.” (Declaration of Anne E. Muenster (“Muen. Decl.”)
¶ 18; Defs.’ Facts ¶ 10.) Further, the Clifton area Clinic alone employed a total of fourteen
instructors and one student teacher. (Defs.’ Facts ¶ 10.) According to Defendants, three of these
instructors were primarily assigned to assist students working at the clinic, and their combined
salaries for the 2012 fiscal year totaled $80,522. (Id.) As a result, Defendants argue that there
was no profit made on the Clinic. However, even assuming that there was a profit, given the
circumstances and the licensing requirements, the primary benefit of student training in the
Clinic is to the student, here Plaintiff. These students are not economically dependent on the
school, did not expect a job with the school or degree of permanence, and had no expectation of
being paid. However, the students require hands on supervised training for licensing in their
field.
Capri’s clinical program is not an entity that exists primarily for the creation of profit. See
N.J. Admin. Code § 13:28-6.29; N.J. Stat. Ann. § 45:5B-3(h) (stating that “the general public
may receive cosmetology and hairstyling services from registered students in exchange for a fee
which shall be calculated to recoup only the cost of materials used in the performance of those
services”). Plaintiff essentially alleges that Defendants are not in compliance with the statutory
limits and restrictions. (See Compl. ¶ 55 (stating that “Defendants have made a conscious
decision to charge a fee to the public for defendants’ salon personal services business that
exceeds the costs of the materials consumed.”)) Even if Plaintiff is correct, and Defendants were
charging more for their services than the cost of materials, an employee/employer relationship is
still absent from the equation. See Walling, 330 U.S. at 153 (where the court did not foreclose an
employer from gaining any benefit from the trainee’s work; rather, the Supreme Court stated that

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“[t]he FLSA was not intended to penalize [employers] for providing . . . instruction at a place
and in a manner which would most greatly benefit the trainees”). If Defendants were making a
profit from the Clinic services, Defendants may be violating the Board’s regulations; but the
existence of profitability, in and of itself, would not create an employer/employee relationship.
Rather, the economic realities test focuses on dependency, the expectation of continued work,
and a common sense view of the underlying facts and circumstances.
Second, Atkins argues that she should be considered an “employee” because Capri, not
herself, was the primary beneficiary of her labor. Atkins alleges this, in part, because the Clinic
required her to perform “janitorial, clerical, [and] logistical functions” that actually “hindered
[her] educational goals.” (Compl. ¶ 68(d); Defs.’ Facts ¶ 15.) These duties included washing and
folding towels, sweeping floors, cleaning equipment, and attempting to sell cosmetology
products to customers. (Pl. Opp. to Summ. J. 12-14.) Atkins further points to the fact that
“defendants required salon workers . . . to perform whatever services a paying customer ordered,
regardless of her educational needs and regardless of whether the student worker needed any
additional practice on the procedure” as proof that the Clinic was not operating for the benefit of
the students. (See id.)
Overall, this Court finds Atkins’s argument unpersuasive. The purpose of the Clinic is to
mimic a real beauty salon. The statutorily-mandated clinical program allows students to train
under the instruction of a professional in a safe environment while affording students the chance
to gain the experience and skills needed to succeed after graduation. The duties that Atkins was
required to perform at the Clinic are the same sorts of duties she may have to perform in a
regular salon, and she has not argued to the contrary. In fact, Atkins herself attests to the fact that
these duties were “essential and necessary” to the Clinic’s continued operation. (See Compl. ¶

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68(d).) Thus, these “janitorial, clerical, [and] logistical functions” may actually further the
educational goals of the clinical program, the Board, and Atkins herself, by providing training
for “essential and necessary” duties. Similarly, the claim that Atkins had to perform whatever
services a paying customer ordered seems to further the goals of the Clinic and training students.
The application of the economic realities test, in the immediate case, indicates that
Plaintiff is not considered an “employee” under either the FLSA or New Jersey State labor laws.
Considering the totality of the circumstances, it is clear that Plaintiff did not depend on Capri for
either her livelihood or continued employment particularly since Plaintiff was not paid for her
work at the Clinic. Additionally, the statutory scheme within which clinics must operate,
including Defendants’ Clinic, prevents the creation of an employer/employee relationship.
Plaintiff trained at the Clinic with the understanding that their relationship was strictly temporary
because only individuals who are considered Senior Students, and not those who have obtained
their license in cosmetology, are legally allowed to work at the Clinic. Further, students were
not guaranteed employment at Capri and Plaintiff has not alleged otherwise. The economic
reality of the situation, along with the statutory scheme in which the Clinic operates,
demonstrates that Plaintiff was merely a student trainee who was required, by statute, to hone her
soon-to-be professional skills at a clinic. As a student, Plaintiff was not entitled to coverage
under the FLSA 8 and Plaintiff is not entitled to wages for services performed at the Clinic.

9

Accordingly, this Court finds that no employer/employee relationship existed between Plaintiff
and Defendants under either the FLSA or New Jersey State labor law.

8
9

As previously mentioned, there is no indication that the discovery sought would significantly alter in this analysis.
It follows that Plaintiff’s claim for overtime is moot.

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Motions to Strike, Conditionally Certify Class, and Stay
Defendants filed two separate motions to strike two sets of supplemental authority filed
by Plaintiff on April 25, 2014 10 and July 31, 2014. 11 “The court may strike from a pleading an
insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R.
Civ. P. 12(f). Generally, if pertinent and significant authorities come to a party’s attention after
the party’s brief has been filed, the party may advise the court of the relevant authority through a
Notice of Supplemental Authority; however, a Notice of Supplemental Authority should not
advance new arguments that were absent from the movant’s complaint. See Beazer East, Inc. v.
Mead Corp., 525 F. 3d 255 (3d Cir. 2008) (citing Fed. R. App. P. 28 (j)).
While it should be noted that the supplemental authorities submitted were available to
Plaintiff and are largely distinguishable, this Court did review the submissions. Additionally,
Defendants previously filed a Motion to Stay and to Conditionally Certify. In light of the
discussion provided above, these four motions shall be dismissed as moot.

10

This included reference to (1) N.J.S.A. § 34:11-4.1(a), and the following two cases: Teleki v. Talk Mktg. Enters.,
Inc., 2012 N.J. Super. Unpub. LEXIS 1407 (App. Div. June 19, 2012); and Mulford v. Computer Leasing, Inc., 334
N.J. Super. 385, 393-394 (Law Div. 1999). These references were available to Plaintiff at the time the initial motion
papers were filed, but Plaintiff did not discover their existence until after that memorandum was filed. (Pl.’s Reply
to Mot. to Strike at 2.) Defendants argued that “Plaintiff [] mischaracterized her submission as a notice of
supplemental authority, when it is actually an impermissible sur-reply.” (See Dkt. No. 26; Defs.’ Mem. of Law in
Supp. of Mot. to Strike 1-2.)
11
The supplemental authority filed included the following: Jochim v. Jean Madeline Educ. Ctr of Cosmetology, Inc.,
et al., No. 13- 6564 (E.D. Penn. filed Nov. 12, 2013); and Ford, et al. v. Yasuda, et al., No. 13-01961 (PSG) (C.D.
Cal. filed Oct. 28, 2013). Both cases and/or the procedural posture are distinguishable from the instant matter.

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CONCLUSION
For the foregoing reasons, this Court GRANTS Defendants’ Motion for Summary
Judgment, DENIES the Cross Motion for Time to Conduct Discovery, and DENIES
Defendants’ Motions to Strike, Plaintiff’s Motion to Conditionally Certify, and Defendants’
Motion to Stay as moot.
s/Susan D. Wigenton, U.S.D.J.

Orig: Clerk
cc:
Parties
Magistrate Judge Mannion

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