RHONDA NESBITT, individually, and on behalf of all others similarly situated, Plaintiff - Appellant,
FCNH, INC.; VIRGINIA MASSAGE THERAPY, INC.; MID-ATLANTIC MASSAGE THERAPY, INC.; STEINER EDUCATION GROUP, INC.; STEINER LEISURE LTD.; SEG CORT LLC, d/b/a Steiner Education Group, Defendants - Appellees, and NATIONAL EMPLOYMENT LAWYERS ASSOCIATION AND ECONOMICS/BUSINESS PROFESSORS (WILLIAM H. KAEMPFER, NADELLE GROSSMAN, PAULA COLE, and MIRIAM CHERRY), Amici Curiae.
from the United States District Court for the District of
Colorado (D.C. No. 1:14-CV-00990-RBJ)
H. Miller (and Adam Harrison of Sawaya & Miller Law Firm,
on the briefs), Denver, Colorado, for Plaintiff - Appellant.
Wozniak of Greenberg, Traurig, L.L.P., Atlanta, Georgia (and
Jeffrey M. Lippa of Greenberg, Traurig, L.L.P., Denver,
Colorado, with him on the brief), for Defendants -Appellees.
A. Moss of Moss Law Practice and Hunter A. Swain of King
& Greisen, L.L.P., Denver, Colorado, for Amici Curiae.
McHUGH, KELLY, and MORITZ, Circuit Judges.
Rhonda Nesbitt is a former massage therapy student who
attended a for-profit vocational school operated by
Defendants-Appellees ("Steiner"). Ms. Nesbitt, on
behalf of a class of former students, brought suit claiming
the students qualified as employees of Steiner under the Fair
Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219,
and alleging Steiner violated the FLSA by failing to pay
minimum wage. The district court granted summary judgment in
favor of Steiner, holding that the students were not
employees of the schools under the FLSA. See Nesbitt v.
FCNH, Inc., 217 F.Supp.3d 1288, 1298 (D. Colo. 2016).
Our jurisdiction arises under 28 U.S.C. § 1291 and we
operated for-profit vocational schools in multiple states. 1
Aplt. App. 6-7; 2 Aplt. App. 129. Steiner schools'
curriculum included classroom and clinical education required
for one to become licensed as a massage therapist. 2 Aplt.
App. 130-31. The clinical component included approximately
100, fifty-minute massages, which counted toward the minimum
clinical hours necessary for students to acquire their state
licenses. Id. at 131-32. The massages were performed
at Steiner facilities on members of the public, who paid
discounted rates for the massages. Id. at 132.
Because the Steiner facilities did not have rooms dedicated
to massage training, the students would clear classrooms of
desks and chairs and erect massage tables surrounded by
privacy curtains for clinical training. 4 Aplt. App. 474-75,
482-83. Each student would lead his or her client to a booth
that included a massage table and chair with enough space for
the student to make a circuit around the massage table and
perform the massage. Id. at 475- 76. While the
massages took place, there ostensibly were clinic managers
and teaching assistants on site to supervise the students and
provide feedback on their massages. 2 Aplt. App. 131-32. In
theory, these supervisors were available to answer questions
from students and to facilitate the clinic's operations.
Id. The parties dispute the extent to which these
supervisors actually provided feedback or answered questions
during the clinic. Compare Aplt. Br. at 24-26,
with Aplee. Br. at 24-26. After the students
completed their massages, the clients were asked to provide
feedback on the massages they received, id. at 132,
though the parties dispute how often these clients actually
completed their feedback forms and how often feedback was
given to students. Compare Aplt. Br. at 28,
with Aplee. Br. at 27. Following each massage,
students would lead their client out and prepare their
workspace for the next client. See, e.g., 4 Aplt.
App. 438, 442-43, 447. They would typically repeat this
process for five clients each clinical day. See,
e.g., id. at 443, 447, 454. Ms. Nesbitt alleges
Steiner profited from the clinics with the students as free
labor. Aplt. Br. at 31.
Nesbitt brought her class-action suit under the FLSA in the
District of Colorado on April 7, 2014. 1 Aplt. App. 1.
Steiner moved to compel arbitration of the claims and to
prohibit litigation of the issues as a class. Id. at
39-53. The district court denied that motion, Nesbitt v.
FCNH, Inc., 74 F.Supp.3d 1366, 1375 (D. Colo. 2014), and
this court affirmed. Nesbitt v. FCNH, Inc., 811 F.3d
371, 381 (10th Cir. 2016).
remand, the district court addressed the issue of whether Ms.
Nesbitt and the students she seeks to represent qualified as
employees under the FLSA. The district court found they did
not. Nesbitt, 217 F.Supp.3d at 1298. The district
court determined that the six factors announced in Reich
v. Parker Fire Protection District, 992 F.2d 1023 (10th
Cir. 1993), when considered in their totality, resulted in a
finding that the students were not employees of Steiner.
Nesbitt, 217 F.Supp.3d at 1294. The district court
came to that conclusion because (1) the students received
vocational training from Steiner, (2) the training primarily
benefited the students because they were required to complete
hours of clinical time for their licenses, (3) the students
did not displace regular employees and worked under
supervision of Steiner instructors, (4) there was no genuine
issue of material fact regarding the profit Steiner made from
operating its schools, (5) the students were not entitled to
employment upon completion of their training, and (6) the
students and Steiner both understood that the students were
not entitled to wages during their time spent training.
See id. at 1294-98. Accordingly, the district court
granted summary judgment in favor of Steiner on the question
of Ms. Nesbitt's FLSA claim. Id. at 1298;
see also Nesbitt v. FCNH, Inc., No. 14-cv-00990-RBJ,
2017 WL 916453 (D. Colo. Mar. 2, 2017). This appeal followed.
review a district court's grant of summary judgment de
novo. Birch v. Polaris Indus., Inc., 812 F.3d 1238,
1251 (10th Cir. 2015). The legal determination whether an
individual is an "employee" under the FLSA is also
reviewed de novo. Reich, 992 F.2d at 1025.
FLSA requires that - subject to certain exceptions - every
employer pay its employees a specified minimum wage and
time-and-a-half for hours worked over forty in a workweek.
See 29 U.S.C. §§ 206-207. The FLSA defines
an employee as "any individual employed by an
employer." Id. § 203(e)(1). In 1947, the
Supreme Court distinguished between employees, who are
entitled to wages under the FLSA, and trainees, who usually
are not. See Walling v. Portland Terminal Co., 330
U.S. 148, 153 (1947). In that case, the Court held that
prospective railroad brakemen who received on-the-job
training, but were not paid during the training period, were
not entitled to wages under the FLSA. Id. From
Portland Terminal, the Department of Labor (DOL)
developed a ...