/>iA lawsuit recently filed in the U.S. District Court for the Central District of California is testing the constitutional limits of California’s worker classification law. In the suit entitled Blu Nail Bar, Inc et al v. Newsom et al, a group of Vietnamese American-owned nail salons in Southern California are suing the state, alleging that the application of Assembly Bill 5 (AB 5) violates the Equal Protection Clause of the Fourteenth Amendment.
The plaintiffs argue that AB 5 discriminates against nail technicians by requiring them to be classified as employees, while exempting other beauty industry professionals such as barbers, hairstylists, and cosmetologists.
AB 5 was signed into law in September 2019 following the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court, which adopted the “ABC test” for determining independent contractor status. The law codified this standard and extended its application to the Labor Code, Unemployment Insurance Code, and Industrial Welfare Commission wage orders. It establishes a strict presumption that workers are employees unless all three prongs of the ABC test are met. Under this test: (1) the worker must be free from the control and direction of the hiring entity in both contract and practice; (2) the work performed must fall outside the usual course of the hiring entity’s business; and (3) the worker must customarily engage in an independently established trade, occupation, or business of the same nature as the work performed. If any one of these criteria is not satisfied, the worker must be classified as an employee.
The complaint alleges that the law disproportionately impacts Vietnamese American salon owners and manicurists. According to the plaintiffs, this burden falls unequally on a single racial and ethnic group, disrupting a longstanding business model in which manicurists operated as independent contractors, often renting space from a salon owner, setting their own hours, and managing their own clients.
Legal Argument
The lawsuit asserts that the differential treatment between manicurists and other similarly situated beauty professionals violates the Equal Protection Clause of the U.S. Constitution. Plaintiffs claim there is no rational basis for subjecting nail salons to stricter employment classification rules while exempting other beauty service businesses.
California Assemblymember Tri Ta is one of the supporters of the lawsuit. Tri Ta represents District 70, which consists of much of the area known as “Little Saigon”, the largest Vietnamese American community in the U.S. He has described the laws impact as “unjust” and introduced Assembly Bill 504 earlier this year, a bill aimed at aligning beauty industry licensing standards and ensuring that manicurists receive equal treatment under California employment law.
Implications for Employers
California employers should closely monitor this case, as it may affect not only classification standards but also potential civil rights considerations tied to employment regulation.
