Court Rules Students Training in Clinics are Not Employees Under the FLSA

November 21, 2016 Advisory

In a decision relevant for any school that provides services to the public as a means to provide training for its students, the United States District Court for the District of Colorado recently ruled that such students are not employees for purposes of the Fair Labor Standards Act (FLSA).

The case, Nesbitt v. FCNH, Inc. (Civil Action No 14-cv-00990-RBJ), was brought by massage therapy students who attended the defendants’ vocational schools. The schools’ curriculum required the students to participate in clinical training under supervision, and the school operated a massage clinic open to the public. Students performed roughly 100 massages during the clinical program. Their clients were paying customers to whom the schools publicly advertised discounted massages. Enrollment documents and the schools’ catalog informed students that as unlicensed student massage therapists, they could not and would not receive compensation from the schools during this clinical component of their education. Despite this, the students argued that during the clinical curriculum they functioned as the schools’ employees under the FLSA and were entitled to unpaid wages for the time they were in the clinical program.

The Court applied the six-part test set out by the Tenth Circuit in Reich v. Parker Fire Protection Dist., 992 F.2d 1023, 1025–26 (10th Cir. 1993), and found that the “economic realities” of the students’ relationship to the school established that the students were not employees. The Court considered the following relevant:

  • That clinical training was both an accreditation requirement and necessary for state licensure as a massage practitioner.
  • That the schools met all state licensing requirements, which demonstrated the schools provided the required levels of supervision to retain such licensure.
  • Pre-clinic orientation, the presence of a supervising massage therapist on site for immediate consolation or assistance and the classroom discussion of feedback students received from clinic clients did not suggest an employer-employee relationship.

The Court succinctly summed up why it ruled against the students:

“Put another way, I look at the forest, not just the trees. Plaintiffs went to school to learn a skill and to qualify for a license to practice that skill professionally. They needed and presumably wanted clinical experience in order to accomplish these goals. They did not expect to be paid. For whatever reason some of the graduates now wish to turn the clock back and claim entitlement to payment for their clinical education. I find and conclude that they have no case under the Fair Labor Standards Act.”

Many schools operate programs that provide services to the public as a means to provide students with experience in career fields such as cosmetology, auto repair, culinary, medicine and dentistry. This decision reinforces that participation in such programs is for academic purposes and that participating students, even though they may be experiencing situations with paying customers similar to those they will see in their work lives, are not school employees.

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