If you were to run a search on the Irvine Company you will find that they have had many historical issues with tenants in the City of Irvine. The Irvine Company is privately owned by one man, Donald Bren and he owns a majority of the city’s real estate which includes housing, retail centers, schools, and parks. The organization seems like a corporate conglomerate but they operate more like an organized group of extortionists. They have used tactics to control their tenants and feel that they have the right to change the rules on their tenants and bypass government regulations whenever they deem fit for their own advantage. Of course, they have high-powered attorneys and government officials working for them. They even have their paid lobbyists to work the system so that they can make their own rules on city policies. Many of the Irvine tenants feel like they were misled or controlled by their leases and can never fight for their rights because they don’t have the money, time, and energy to go through the legal battle against one of the wealthiest real estate companies in America.

In a case of a business tenant operating in Irvine with multiple salon locations, a tenant of over 10 years in Irvine, Images Luxury Nail Lounge wanted to sell one of their locations after coming out of the pandemic in order to pay their debt. The Irvine Company would not allow them to reassign their lease and rejected all new tenant applications, even when the applicants had great credit but were told by the Irvine Company, “We just don’t like the applicants.” The reason the Irvine Company wants to hold Images hostage, is because they want to force Images to payout their entire lease terms before they would transfer the lease. They are bullying Images into staying so that they can guarantee their rent, otherwise, the Irvine Company would take over the business and Images would walk away with nothing. Just like any business owner, one would want to have the freedom to come and go and move into or out of a city but the Irvine company is making it challenging.

When Images first signed their lease at the Eastbluff location with the Irvine Company, Images was not informed of parking construction delays so this caused the grand opening of their salon to be postponed for over a year.

Then during COVID, Governor Gavin Newsom had required complete closures of salons but the Irvine Company told Images that they could go ahead and reopen and that the City would allow it. Images was informed that the Sheriff and city officials will not shut the business down but Images was afraid to open due to the fear of the Governor’s order, the County reopening guidelines, and safety for their patrons and employees so they remained closed, but this shows how The Irvine Company would disregard Government orders and public safety so that they can collect rent from their tenants. Irvine did not really help the businesses or tenants in their city during the pandemic by establishing a “rent relief” which was really only a deferral of rent of 90 days that made it difficult for many businesses to pay both the current rent and deferral in such a short period of time.

There are plenty of blogs, websites, and social media stories written by first-hand incidences of tenants similar to Images Luxury Nail Lounge complaining about the Irvine Company. Irvine tenants, whether they are business tenants or housing tenants feel extorted or misled into thinking that Irvine is one of the most “desirable” places to live and work but if you see the endless complaints on BBB’s website, and blogs by tenants being kicked out of their properties even when they have leases in place or an entire website dedicated to Irvine Company violating building codes and trying to cover it up, you’ll see that Irvine is not a desirable place to live or work and the Irvine Company is to blame.

Those who have been independent contractors or “gig” workers in California are familiar with Assembly Bill 5 (AB5). This is a legislation that went into effect on Jan. 1, 2020, and is supposed to regulate companies that hire gig workers such as Uber, Lyft, and DoorDash to reclassify them as employees. Under AB5, independent contractors must pass the strict three-pronged test (ABC Test). This caused issues for many independent contractors who did not consider themselves an employee and could not pass the ABC test. So in September 2020, Assembly Bill 2257 was passed, which rewrote a number of the requirements of AB5 and exempted a substantial list of job categories. Instead of the ABC Test, they must pass the Borello Test, which is not as strict and is used by the IRS.

Under the Borello Test, the most significant factor is whether the hiring company has control or the right to control the worker both as to the work done, the manner, and the means in which it is performed.

Then on September 30, 2021, AB1561 passes to amend AB2257, which allows licensed barbers, electrologists, cosmetologists, manicurists, and estheticians to  qualify as Independent Contractors if they meet the Borello test and also:

 (ii) Sets their own hours of work and has sole discretion to decide the number of clients and which clients for whom they will provide services.

(iii) Has their own book of business and schedules their own appointments.

(iv) Maintains their own business license for the services offered to clients.

(v) If the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.

(vi) THIS SUBPARAGRAPH SHALL BECOME INOPERATIVE, WITH RESPECT TO LICENSED MANICURISTS, ON JANUARY 2025

This last subparagraph (vi) only mentions “manicurists.” Why are manicurists singled out? Cosmetologists, Barbers, Estheticians, and Manicurists are all licensed and governed by the same State Board of Barbering & Cosmetology, so why do manicurists become inoperative under AB5 exemptions on January 1, 2025, and not the other licensed techs in the industry?  Is this discrimination against manicurists?

Financial Summit Inc., which contracts many licensed manicurists for salons in Southern California, became an advocate for manicurists due to the passing of this discriminating provision. When Financial Summit Inc. went public and drew attention to the unfair law, they were singled out and audited by EDD as a form of government retaliation. Financial Summit Inc. provided evidence to satisfy the Borello Test and requirements under AB1561 but was still fined $178K for 2017-2019, for the years conveniently right before the AB5 law passed.

Financial Summit Inc. had provided written contracts between them and their 1099 techs which were reported to the IRS. Each of the licensed techs under this contract had to provide their own liability & malpractice insurance. They were given their own keys to access the salons at any time and made appointments with their clients directly. The techs set their own schedules, bought their own tools and supplies, and charged their own rates.

So when Financial Summit Inc.’s attorney contested the fines, EDD threatened to audit 2020-2023 as well, even when the current AB1561 law allows licensed manicurists to qualify as Independent Contractors until 2025. Therefore, this action by EDD against Financial Summit is an act of totalitarianism.

A new bill AB1818 has been proposed by Senator Janet Nguyen to delete the January 1, 2025, inoperative date, thereby making licensed manicurists subject to this exemption indefinitely. You can fight the discrimination and help pass this bill by visiting https://fastdemocracy.com/bill-search/ca/20212022/bills/CAB00024067/#billtexts to vote and provide public comments.

“This whole thing started in the state of California, the first community spread, in a nail salon. I just want to remind everybody of that and that I’m very worried about that.” This statement made by Governor Gavin Newsom of California after the reopening of businesses with restrictions, during one of his daily media briefings on COVID-19 in early May 2020, was made without any factual data or evidence; when the whole world knew that the Corona Virus started in Wuhan, China. After nail salons first re-opened on June 22, 2020, with restrictions and safety measures imposed by the State Public Health Office, they struggled to bounce back due to Newsom’s flagrant statement, but he never apologized for his remark.

Less than 3 weeks later, on July 13, 2020, Dr. Angell, the then State Public Health Officer issued an order directing all salons in the State of California to again cease salon and hair care services. As a result, many salons were unable to recoup the cost of implementing the safety measures imposed.

On or around August 9, 2020, Dr. Angell supposedly resigned from her role. It’s alleged that Dr. Angell disagreed with Governor Newsom’s political ploy of shutting down California without science and instead was trying to politically damage the then United States Administration in the run-up to the 2020 Presidential election. Dr. Angell also disagreed with California’s reporting of her office’s COVID-19 data tracking following a technical glitch that caused a delay in reporting virus test results. Her replacement, Dr. Pan, implemented a statewide order that abandoned the previous re-opening plan order and dictated that counties would be classified according to a new plan entitled “Blueprint for a Safer Economy” under which a color-coded “tier” system would be used. Under this new color-coded tiered system, each California county is placed in one of four tiers: Purple, Red, Orange, and Yellow—ranging from most to least restrictive, respectively.

Unlike the previous staged reopening plan the new order does not provide any criteria under which California’s businesses and economy would be permitted to fully reopen. Under the respective tiers established, salons were required to: (1) cease indoor salon services (Purple tier); (2) limit indoor salon services capacity to 25% (Red tier); or (3) limit salon services capacity to 50% (Orange and Yellow tiers).

Specifically, the State of California did not initially include Hollywood studios in the “Essential Workers” list issued in March 2020. But a revised listing, declaring that workers involved in “the entertainment industries, studios, and other related establishments” be essential. Explicitly under the revised listing, the State Board of Barbering & Cosmetology licensed services in these Hollywood studios were allowed to perform their work, while those same licensed professionals were prevented from doing the same services in a non-Hollywood studio salon.

The Professional Beauty Federation of California filed suit in Los Angeles federal court to pressure the administration of Gov. Gavin Newsom to reopen hair and nail salons. In a press release, PBFC President Ted D. Nelson said that the beauty industry has “stood in solidarity” with California’s mission to flatten the curve and that the state has “met that noble goal.” Nelson added that an extension of the state’s shutdown is not necessary to continue to combat the pandemic and believes it will result in “devastating consequences to the livelihood and businesses of tens of thousands of California citizens. We understand that not all salons and stylists will want to reopen under the current threat of this pandemic. Nothing in our legal challenge will force anyone to act against their will. We just believe that the formal education/training of our stylists warrant our safe reopening under additional ‘social distancing’ protocols, which our State Board and industry stakeholders have been putting together for weeks.”

A day later, Newsom announced hair salons and barber shops would be allowed to reopen — but not nail salons. This didn’t make any sense to nail salon owners when hair stylists worked face-to-face with customers more, if not the same as a nail technician did. All salons; hair, barber, and nails required the same personal protective equipment and had the same guidelines enforced by the State Board of Barbering & Cosmetology, so why were nail salons being isolated?

Because nail salons had to remain closed while other salons were allowed to open, the Vietnamese community was outraged. According to the Pro Nails Assn., California was home to 11,000 nail salons, with 80% owned by Vietnamese Americans, and as reported by the California Health Nail Salon Collaborative, 69% of over 400,000 licensed manicurists are Vietnamese in California. The Vietnamese community felt they were targeted for racial discrimination. Can a Governor just say what he wants without any evidence, make remarks that are discriminatory, get immunity, and not be held responsible just because he’s in office? Would he have said this if it was towards an industry that’s majority black-owned businesses? Vietnamese Americans’ livelihoods were at stake and they were infuriated by Newsom’s words and decision-making. In August of 2021, many Vietnamese Americans wanted to recall Newsom and blamed him for their unemployment because for most of them, doing nails is all they know and it was what supported their entire family.

Although the pandemic is behind us, many salons have closed down permanently and the economy is still struggling to bounce back but one salon has not forgotten. Images Luxury Nail Lounge has not yet forgotten how Newsom damaged the Vietnamese community and nail salon businesses by making his disparaging and untrue statement and the unfair treatment of nail salon businesses. Images Luxury Nail Lounge was forced to close and reopen their 6 locations 3 times during the pandemic and lost about 125 nail technicians. Even after fully reopening, they could not recover completely and had to let go of 3 locations due to the lack of customers and technicians and may be closing down more or possibly all their locations.

Now Images Luxury Nail Lounge is suing Newsom for damages to their business due to abrupt opening and closing and the unfair treatment of nail salons under the “Blueprint for a Safer Economy” color-coded “tier” system. Newsom may have never thought that his one un-credible statement would continue to be so detrimental and continue to haunt him after all these years.

Reference Articles:

https://news.yahoo.com/californiaicles-governor-says-community-spread-022240370.html

https://www.politico.com/states/california/story/2020/07/19/vietnamese-americans-nail-salons-california-shutdown-1300932

https://news.yahoo.com/did-coronavirus-spread-nail-salon-130000120.html

https://calmatters.org/california-divide/2020/09/coronavirus-shutdown-nail-salons/

https://www.yahoo.com/video/beauty-salons-threaten-sue-california-140530448.html

https://www.yahoo.com/video/nail-salon-coronavirus-community-spread-234658946.html