Occupational Licensing

Tennessee's Cosmetology Board Thinks It Can Regulate a Software Company

Project Belle connects customers with licensed cosmetologists. Competitors have asked state regulators to shut it down.

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Ingram Publishing/Newscom

Armand Lauzon owns a software company, but on Monday he'll have to stand before the Tennessee Board of Cosmetology and Barber Examiners to explain why he should be allowed to stay in business.

Lauzon doesn't cut or color hair, doesn't shape or polish nails and doesn't apply makeup. He doesn't perm, pluck, wax, or weave. He doesn't frost tips or French them.

Yet unless the Board of Cosmetology and Barber Examiners—which, for better or worse, has regulatory power over anyone who wants to do engage in any of those activities for money—changes course, it could force Lauzon's company out of businesses and make him pay a fine to the state.

Lauzon's business is—to steal a hackneyed Silicon Valley expression—basically "Uber, but for cosmetologists." He's the founder and CEO of Project Belle, a website that allows licensed cosmetologists to schedule appointments with prospective clients. Instead of going to a salon, customers can have hairstylists or makeup artists come directly to their homes or businesses.

The idea came from his cousin, a professional cosmetologist and new mother who found it difficult to maintain full hours at a salon while also caring for her family. Seeing how sharing economy powerhouses like Airbnb and Uber were changing how people looked for lodging and transportation, Lauzon realized there was an opportunity for a similar service to do the same thing to the salon industry.

The convenience is an obvious selling point for customers, but Lauzon says the cosmologists using his service benefit too. They can set their own schedules, don't have to pay fees to rent space in a salon or spa and determine their own pricing (Project Belle takes 15 percent off the top, similar to how Airbnb operates).

Project Belle launched in September 2015 and started booking customers in December. Just nine months later, the website lists more than 50 licensed cosmetologists in the Nashville area. More than 200 customers have booked over 500 appointments this year.

On July 14, though, the bad news arrived in the mail. A brief letter from the state Department of Commerce and Insurance told Lauzon he was violating the Tennessee Cosmetology Act of 1986, ordered him to immediately shutter his website and pay a $500 fine.

A review of Project Belle's website "revealed that (Lauzon) is allowing licensed hair stylists, aestheticians and manicurists to do in-home work to the public in the State of Tennessee without possessing a valid cosmetology shop license," wrote Laura Martin, assistant general counsel for the cosmetology board.

Lauzon's attorney, Daniel Horwitz, says that the board's entire claim that Project Belle requires a cosmetology license in order to conduct business in the state is based on the false assumption that the business is providing cosmetology services.

"It is not," he wrote to the board in August. "Project Belle has never provided any cosmetology services to any customer in Nashville or anywhere else. It also has no plans to do so in the future."

This isn't just a semantic point.

The board's decision to take action against Project Belle raises some interesting questions about the scope and authority of regulatory agencies like this one. If a state cosmetology board is able to regulate a business like Project Belle, is it also able to regulate any business that serves to connect professionals with customers? Could a similar board, if it wanted to, regulate how cosmetologists advertise their services in third party publications like the Yellow Pages or a newspaper?

Or, could it be that the board is using its regulatory power at the behest of private businesses who don't want to compete with Project Belle?

That seems to be case. Attached to the cease-and-desist letter the board sent to Lauzon in July was a single complaint filed by Karen Kops. Kops is the co-owner of Poppy & Monroe, a businesses that sells organic skin care products in Nashville.

"I'm writing to advise you of a local company, www.projectbelle.com, offering and advertising for cosmetologically services on location which I believe is outside of current state law rules," Kops wrote in an email dated February 22, 2016. "As a business owner with a brick and mortar shop adhering to all state law requirements, I find this type of competition highly disturbing."

Those last eight words really caught Lauzon's attention. He bristles at the notion that competition could be "disturbing" but he also takes the complaint as something of a badge of honor.

"I think we are disruptive, but that's a good thing" he says, drawing a parallel between Project Belle's business model and how other so-called "disruptors" like Uber and Airbnb have benefitted consumers by providing greater convenience and competition, while facing similar challenges from regulatory agencies trying to protect established businesses.

It's unclear if the state board received other complaints about Project Belle. The one from Kops was the only complaint filed as part of the legal action taken by the board in July, and Horwitz says he's never seen any other official complaints. A spokesman for the state board did not answer Reason's inquiries about whether other complaints existed or why Kops' email prompted the board's investigation.

As such, it appears that the state board tried to force Lauzon out of business on the basis of a single complaint from a potential competitor.

"Economic protectionism, which is the motivation for the Board's actions here, is never a legitimate state interest," says Keith Diggs, an attorney with the Institute for Justice, a libertarian law firm that frequently challenges overreaching government regulations that limit economic freedom. Though IJ is not involved in the legal dispute between the state board and Project Belle, the organization says it is monitoring the situation.

Diggs says the board's action against Lauzon are not just wrong, but probably unconstitutional. A 2002 decision in the U.S. Circuit Court of Appeals struck down a similar Tennessee law prohibiting selling caskets without a funeral director's license. That licensing law was a "naked attempt to raise a fortress protecting the monopoly rents that funeral directors extract from consumers," Judge Danny Boggs wrote in that case.

Even if the state board believes it has a legitimate reason to prevent Project Belle from competing with brick-and-mortal salons in Tennessee—and believes it has the authority to regulate a website—there's still the question of whether it should.

On its website, the Tennessee State Board of Cosmetology and Barber Examiners says its primary objective is "the safety and welfare of the public."

The cease-and-desist order does not explain how Project Belle jeopardizes the public's safety or welfare. The investigation consisted merely of a review of the company's website, according to the letter sent to Lauzon in July.

Lauzon says Project Belle takes public welfare "very seriously." All cosmetologists listed on Project Belle are licensed by the state and go through a vetting process before they can schedule appointments with clients. Applicants must provide a work history, proof of ID and show their state license; then must submit to an in-person interview with Project Belle staff before setting up a profile on the website. Once online, customers can give reviews and feedback—steering future users towards top notch professionals and away from anyone who isn't doing a good job.

On Monday, Lauzon will climb the steps to the Davy Crockett Tower in downtown Nashville and make his case to the state board. He hopes to convince the bureaucrats that they don't have a good reason, or good authority, to shut down Project Belle.

"We don't want ancient laws being interpreted by a bureaucracy to stop us from bring services to those people," he says.

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  1. I wonder how many of these entrepreneurs nodded in agreement while reading in their history textbooks about how the pre-New Deal Supreme Court was in the tank for business interests and the freedom to make contracts?

    1. We could sure use a bit of the pre-New Deal jurisprudence right about now.

      1. (hopefully based on privileges and immunities not due process this time around)

        1. Or skip the 14th altogether and go straight to the 9th.

          1. That’s a rule of construction for the powers granted to the feds.

            Anyway, I think that the 9th generally covers the ground of privileges and immunities – rights which are recognized historically as belonging to Americans.

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  2. “Once online, customers can give reviews and feedback?steering future users towards top notch professionals and away from anyone who isn’t doing a good job.”

    ABLEISTS! WE NEED SOME MUSCLE OVER HERE!

    *calls the state regulators*

    /shitty salon owner

    1. He definitely merits punishment for his rudeness. /soave

    2. Student’s free expression rights trampled on a public college campus!

      1. Tristan Rettke, an 18-year-old freshman, wore overalls and a gorilla mask and, wandering barefoot while holding a burlap sack with a Confederate flag and a marijuana leaf on it, offered bananas to students who were protesting

        He could have just attended a soccer match in Europe and no one would have raised an eyebrow.

  3. “Safety and welfare”? For cosmetologists? Give me a break.

    Just glancing at the requirements on the TN.gov website, the licensure requirements are unbelievably steep.

    1500 hours (over 8 months full time) of training at a cosmetology school, A test, and fees. All for a job that that pays anywhere from $10-16 dollars an hour.

    1. Hey, if those Salons can’t pay a living wage they don’t even deserve to exist

    2. the requirements are silly but sometimes the pay is good a friend of mine is a colorist who makes $300 to $600.00 per session and she has several in a day. not bad pay but who are the fools paying her?

    3. In theory, its about standards and safety.

      In practice, its about anti-competitive practices and government power.

      Why would people pay for services that endanger their safety or hurt their welfare? They wouldn’t. So we don’t need government licensing, we need educated customers.

      Since the government controls most schools….

      1. It’s hard to remember our Wild Wild West pre-cosmetology license world where big cosmetology would knowingly endanger our lives with make up artists and hair stylists negligently murdering half their customers while people kept funneling in the salons like lemmings all to turn a profit. Good thing we are now safe from all that thanks to these benevolent state legislatures.

        1. I know, right. The progtards really believe that business would love to kill most of their customers, if only given the chance.

          It would be a goddamn bloodbath in Tennessee if it weren’t for the Cosmetology Board. /S

  4. Hurray! This is what good government looks like.

    1. Government is just a word for things we do together, like fucking over people making an honest living.

      1. Government is just a word for things we do together if by “we” you mean “a bandit gang” and by “things we do” you mean “extortion, robbery, blackmail, and murder”.

  5. Dude, what the fuck Tennessee??? It seems like every other thing I read about the place has to do with inane regulatory burdens or extraordinary taxes.

    1. The lack of a state income tax drives their government crazy.

      1. They still need all that money somehow.

    2. Tennessee is not a conservative bastion. Not only is Nashville home to progressive hordes, the rest of the state has quite a few RINOs in office there. These licensing schemes are right up their alley.

      The big downside to Taxifornia and NY having mass exoduses of residents, is they have to live somewhere. they move to low tax states and vote. They vote to destroy freedom, low taxes and

      1. [cont’d] low government intervention.

  6. Kops is the co-owner of Poppy & Monroe, a businesses that sells organic skin care products in Nashville.

    Poppy & Monroe could use some negative publicity.

  7. A review of Project Belle’s website “revealed that (Lauzon) is allowing licensed hair stylists, aestheticians and manicurists to do in-home work to the public in the State of Tennessee without possessing a valid cosmetology shop license,” wrote Laura Martin, assistant general counsel for the cosmetology board.

    Uh, a review of any website that doesn’t actively prevent “licensed hair stylists, aestheticians and manicurists to do in-home work to the public in the State of Tennessee without possessing a valid cosmetology shop license” could just as easily be said to be ‘allowing’ the activity. Hopefully Lauzon or his lawyer make a similar statement to the dullards they’re being compelled to face.

    1. Yeah, are they suing Yelp, too?

      1. Poppy + Monroe is on Yelp, BTW…

  8. I’ve got a minor nit to pick on this. And I say a minor nit, because none of what I’m saying diminishes his claim, or the idea that regulators have any say in this whatsoever. But he’s not a “software company” any more than Domino’s Pizza is a software company.

    I understand the impulse to look at a company that uses hip, mobile tech and apps to connect consumers to niche services, but that doesn’t really make them a tech company. Dominos pizza has reputedly one of the most advanced IT models in the world with pioneering virtual technology and cloud services that let it respond to increased demand during major national events such as The Superbowl etc., and then shrinking those cloud services back to normal demand levels and so forth.

    This guy is a… cosmetology services company that uses an app.

    1. This guy is a broker. He takes a cut of each sale for connecting a buyer and a seller.

      1. Exactly, he could genericize his app to multi-services.

        Domino’s makes pizza, they dont just broker pizza from a nearby place.

        1. Pizza Brokerage. I smell a business method patent coming on. 😉

          1. Combine with uber and you could get a pizza delivered from any store.

            1. Ok, you’re listed as co-inventor.

            2. Might as well throw brews in with service too.

              1. You’d better find some deep pockets to get through the alcohol licensing requirements while you’re not making any money at this.

            3. Add in groceries and “escorts” and I’ll invest.

              1. There’s already GrubGub/Seamless.

                https://en.wikipedia.org/wiki/GrubHub

                You might have to get the booze through Drizly.

                https://en.wikipedia.org/wiki/Drizly

    2. They provide no cosmetology services, Paul. None. As noted below, by Kinnath, they are merely brokers. That’s like saying the phone answering service you hire to take after-hours calls is providing services.

      1. You say broker, the government hears “human trafficker”.

      2. My larger point is being misunderstood. As Robc commented, they can be compared to Uber.

        Fine, drop the Domino’s analogy. Uber is not a software company. They’re a ridesharing company/broker. Microsoft is a software company.

        The fact that you develop an app to help deliver your services doesn’t really make you a tech company.

        1. I think we can agree that he is not a cosmetologist. The Cosmetology Board regulate cosmetologists.

    3. Yeah, no he is a tech company.

      If he were actually offering some form of cosmetology service directly he’d be a cosmetology company with an app, but all he is is an app.

      1. See my post above. He uses technology to provide a brokerage service.

        1. You need to look up the term “brokerage” because you obviously don’t understand what it means.

    4. Its a slippery slope because Google and all sorts of companies offer location, advertising and services to numerous manufacturing and service industries even though Google et al. are not in those industries. In other words, unless you actually cut hair or do nails, you are not a cosmetologist.

      This guy’s company connects cosmetologists and customers.

  9. He hopes to convince the bureaucrats that they don’t have a good reason, or good authority, to shut down Project Belle exist.

    Obviously, Project Belle failed to make the appropriate bipartisan donations.

  10. Diggs says the board’s action against Lauzon are not just wrong, but probably unconstitutional. A 2002 decision in the U.S. Circuit Court of Appeals struck down a similar Tennessee law prohibiting selling caskets without a funeral director’s license. That licensing law was a “naked attempt to raise a fortress protecting the monopoly rents that funeral directors extract from consumers,” Judge Danny Boggs wrote in that case.

    It would probably be difficult to craft but there ought to be a federal law requiring states to pay progressive damages if they keep doing the same illegal shit, ie – first case regular damages, second case five-fold damages, third case ten-fold, etc.

    1. 4th case Criminal Charges against the state government agents responsible for the obviously unconstitutional decision

  11. If I were in Lauzon’s shoes, I’d send a one-line response: “Go read the first amendment and fuck off, slavers.”

    -jcr

    1. This isn’t a first amendment problem. This is about what power the state has to regulate brokerages. And they do it all the time. The issue here is the wrong piece of government is using the wrong justification to regulate this brokerage.

    2. If Libertarian/libertarian interpretations of the Constitution were popular enough where that would work, the board wouldn’t exist in the first place.

      So it’s safe to assume, as the board does exist, that response would do nothing effective and may make things worse.

      To make a long story short: as a minority view point, libertarians/Libertarians need to do a better job of selling their views to others. Treating others with contempt and ridicule is not an effective form of persuasion.

  12. I find this type of competition highly disturbing.

    A lesser known Darth Vader quote from when he was still transitioning from whiny prequel pussy to iconic badass?

    (Teenage Anakin was, after all, a known statist.)

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  14. RE: Tennessee’s Cosmetology Board Thinks It Can Regulate a Software Company
    Project Belle connects customers with licensed cosmetologists. Competitors have asked state regulators to shut it down.

    Of course Tennessee’s Cosmetology Board can regulate a software company.
    Why is it I’m the only one that can see the connection between software and cosmetology?

  15. Wait, not only is Poppy & Monroe on Yelp, there’s a button on the page that allows a Yelp user to schedule and appointment.

    THAT MAKES YELP A COSMETOLOGY COMPANY!

    1. Yes, the hypocrisy is amazing here.

  16. On Monday, Lauzon will climb the steps to the Davy Crockett Tower in downtown Nashville and make his case to the state board.

    The irony, it burns.

    1. ++++1

  17. My god this quote is priceless!
    “Karen Kops changes her nails at least once a week. Her choice of polish depends on her mood. “Sometimes I want to be a little sweet; sometimes I want to be a little badass,” she says. “

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  19. You mean to say it can’t?
    Why it’s the government and isn’t that what the government does – regulate everything from our thoughts to our farts?

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  21. Poppy & Monroe is on yelp. Just in case anyone you know had a bad experience and wants to drop by and leave a one star review

  22. Why would he even comply? He’s just enabling them. Get a lawyer, take the state to court. And then move your business somewhere they want it.

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