That is not a just government, . . . where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens . . . free use of their faculties, and free choice of their occupations.
- James Madison (1792)1
On November 1, 1991, the Institute for Justice filed a lawsuit challenging the constitutionality of the District of Columbia's cosmetology licensing scheme. As enforced, the cosmetology regulations threaten to drive a thriving African hair styling salon out of business, and to destroy employment and training opportunities for low-income individuals along with it.
The ramifications of this lawsuit extend far beyond the individuals involved. Occupational licensing laws in all fifty states and the District of Columbia restrict entry into hundreds of professions. These laws often far exceed legitimate public health and safety objectives, and instead operate to exclude competition from newcomers. As a result, these laws have the effect of cutting off the bottom rungs of the economic ladder, thereby preventing aspiring entrepreneurs from earning their share of the American Dream.
The lawsuit on behalf of Taalib-Din Abdul Uqdah, Pamela Ferrell, and Cornrows & Co. is the opening salvo in an effort to reinvigorate judicial protection for "economic liberty"-the basic civil right of every American to pursue a business or profession free from arbitrary or excessive government regula-tion. Economic liberty is an essential part of our nation's promise of opportunity.
History and Scope of Occupational Licensing
Nearly 1,000 occupations are regulated by the states. In 490 instances, individuals must secure licenses to engage lawfully in their professions.2 Occupations subject to licensing requirements range from the obvious-such as doctors and lawyers-to professions in which the need for regulation or restrictions on entry is not at all clear, such as bee keepers, lightning rod salesmen, shorthand reporters, fence installers, and septic tank cleaners. Barbers and beauticians are subject to licensing in all jurisdictions.3
Occupational licensing traces its origins to the guilds of the Middle Ages.4 In this country it has a particularly sordid pedigree. Following the Civil War, southern governments enacted "black codes" designed to prevent newly emancipated blacks from engaging in trades they had learned as slaves. These efforts to deny basic economic liberty to blacks inspired federal civil rights legislation guaranteeing freedom of contract and private property rights, rights that were ultimately encompassed within the guarantee of "privileges or immunities of citizenship" under the Fourteenth Amendment.
But in the 1873 Slaughter-House Cases, the Supreme Court ruled by a 5-4 vote that the Fourteenth Amendment does not protect an individual's right to pursue a trade or profession free from arbitrary or unequal government regulation. This decision, which remains on the books, opened the floodgates for the infamous "Jim Crow" laws, which severely impaired basic economic liberty for blacks.5
Licensing of cosmetologists commenced in 1920, and spread rapidly during the New Deal. Like many occupational licensing laws, cosmetology licensing was sought for protectionist purposes by practitioners within the affected industry. The National Hairdressers' and Cosmetologists' Association crafted and promoted a "model bill," ostensibly to protect health and safety, but with the intent and effect of limiting entry into an increasingly competitive occupation.6
Occupational licensing laws today cover about 10 percent of all jobs. Many of the laws go far beyond health and safety objectives, and instead impose rigid and unreasonable requirements that are unnecessary to skillfully provide services to the public. As economist Walter Williams observes, these laws "discriminate against certain people," particularly "outsiders, latecomers and [the] resourceless," among whom "blacks are disproportionately represented."7
A case in point is cosmetology licensing in Missouri. As elsewhere, would-be hairstylists must satisfy extensive educational requirements and pass both a practical ("hands-on") and written examination. The written component tests such esoteric matters as the chemical composition of certain bones. A recent study by Stuart Dorsey found that "the less educated, blacks, apprentices, and other specific groups are more likely than others to fail written licensing examinations, even though they do not appear to be less able than other workers," noting by example that black candidates pass the "hands-on" test at the same rate as whites but fail the written portion at vastly disproportionate rates. Dorsey concludes that these findings "suggest that occupational licensing can restrict the labor market opportunities of groups of workers whose alternatives are already limited."8
The fact that occupational licensing laws are typically enforced by boards comprised of practitioners within the regulated industry exacerbates the inherent exclusionary effect of occupational licensing laws. In essence, this arrangement confers the coercive power of government upon a cartel whose vested interest lies in excluding as many competitors as possible. A report for the U.S. Department of Labor charged that cosmetology boards "made up almost exclusively of practitioners from the regulated occupation [seem] quite ready to place the prejudices and narrow interests of the occupation ahead of the public interest." The report recommended placing responsibility for health and safety concerns under the auspices of local health departments.9
Cosmetology Licensing in the District of Columbia
The current District of Columbia cosmetology law was enacted by Congress in 1938 at the height of the Depression. The legislation was inspired by the Washington chapter of the national cosmetology trade association, and was backed strongly by "a small organization of proprietors of exclusively large beauty shops."10 The only testimony supporting the bill came from officials of the trade association. A representative of small beauty salons charged that
[t]his bill . . . is sponsored by the owners of the remaining number of exclusive and once high-priced beauty shops that remember the tremendous prices they once received from their fashionable patrons-and I fear that these same persons hope to get control of the situation in the legislation as proposed, limit or control competition, and perhaps somehow get back into the rich green pastures of yesterday.11
The District of Columbia's Health Officer was equally dubious. "In the title of the bill . . . where the language 'for the protection of the public health' occurs," he testified, "I believe that this should be eliminated, to make it quite clear that this is a bill that means to protect primarily the guild interests."12 The Commissioners of the District of Columbia argued that the Department of Health was adequate to safeguard public health and safety, and objected to the creation of a board of cosmetology to "regulate trade practices [that] do not vitally affect the health of the . . . public."13 Rep. Martin Dies closed the debate by proclaiming that
[i]n the guise of sanitation and health, the bill gives the board dictatorial powers which are not needed to accomplish the avowed purposes of the bill, but which may be used to narrow the field of competition so that competent and worthy people will be denied an opportunity to make a living. No one opposes any sane measure to promote health and sani-tation. This is not such a bill.14
Today's cosmetology licensing regulations do not differ substantially from the version passed in 1938. The District of Columbia cosmetology board is comprised of five cosmetologists, and has applied its regulatory scope broadly to require licensing of any practitioner who works in any manner with hair. The law and implementing regulations require an applicant for a cosmetology license to complete at least 1,500 hours of prescribed training (more than eight months at full time) in one of the handful of licensed cosmetology schools, which charge $3,500 - $5,000 for these courses. Applicants must then pass a practical and written examination, covering hairstyles such as "finger waves" and "pin curls" that have not been popular for 40 years. The Board is authorized to issue limited certificates for specialized services, but has done so only for manicurists. Violations of the cosmetology regulations are punishable by fines and up to 90 days in jail.
In 1985, the District of Columbia Bar issued a study highly critical of the District's cosmetology regulatory regime. The study concluded that the practice of cosmetology in the District of Columbia is strongly overregulated, proportional to the benefits of regulation. Beauticians and beauty schools are subjected to heavy training and examination requirements that are unrelated to consumer safety and health.
. . . Under the circumstances, heavy licensing and regulations for cosmetology have imposed an improper barrier to the practice of cosmetology, without offering significant consumer protection.
The study noted that unlicensed operations did not receive more complaints or safety problems than licensed shops, and indeed that the Board of Cosmetology was extremely lax in inspecting shops or in assisting consumers who file complaints. The study recommended eliminating the licensing examination and creating a civil remedy for aggrieved consumers.15 No changes were made in the Board of Cosmetology's regulations or practices in response to the study.
The Current Controversy
Taalib-Din Uqdah and Pamela Ferrell launched Cornrows & Co. in 1980 to provide high-quality African hair styling to customers in the District of Columbia. The business specializes in hair braiding, extensions, and cornrows, and it trains and employs highly trained braiders to create intricate and artistic hair styles that trace their origins thousands of years to Africa.
A classic example of bootstraps capitalism, Cornrows & Co. soon flourished, providing a popular service to the community, paying tens of thousands of dollars in taxes annually, and creating jobs and training opportunities for the unemployed.
Almost immediately, the Board of Cosmetology commenced a ten-year campaign of harassment. Although Ms. Ferrell holds a valid cosmetology license, the Board repeatedly threatened to shut down Cornrows & Co. for its failure to license the hair salon, its training program, and its hair braiders.
Although the definition of cosmetology in the District of Columbia law does not specify hair braiding, the Board of Cosmetology has imposed the full range of regulatory requirements on Cornrows & Co. As a result, in order to lawfully offer hair braiding services, would-be practitioners must invest thousands of hours and thousands of dollars in a training program that will not at all prepare them for their chosen profession. For example, the cosmetology examination requires extensive knowledge of chemicals, while African hairstyling is entirely chemical-free. Conversely, the cosmetology licensing examination does not require any training in hair braiding or related techniques. The hair braiders employed by Cornrows & Co. are not eligible to take the test, because the training program provided by Cornrows & Co. itself is not eligible for a license, and because the students are not trained in procedures that are necessary for the examination but irrelevant to the services they provide.
Mr. Uqdah and Ms. Ferrell have patiently sought to accomodate the District of Columbia government. Their business consis-tently meets or exceeds health, safety, and ethical standards. They do not object to reasonable regulation, but only to exces-sive and arbitrary regulation that impairs their ability to pursue their chosen profession. Mr. Uqdah and Ms. Ferrell went so far as to hire a lawyer to draft proposed regulations for African hair styling, but these proposals repeatedly have been rejected or ignored by the government. Likewise, Mr. Uqdah and Ms. Ferrell have requested limited registration for their spe-cialization from the Board of Cosmetology, which has denied their requests. At every turn, the good faith efforts of Mr. Uqdah and Ms. Ferrell to operate a legitimate business have been thwarted.
Finally, in 1989, the District of Columbia imposed $1,000 in fines for operation of a beauty salon and training program without a license. In September 1991, the District of Columbia Board of Appeals upheld the fines. If Mr. Uqdah and Ms. Ferrell do not comply, they will be subject to incarceration. The enforcement of the cosmetology licensing regime presents the Uqdahs with a Hobson's choice: shut down their business or go to jail.
No American should face such a choice. The legal challenge by the Institute for Justice goes to the very core of cherished consti-tutional values: the right of individuals to earn an honest living. Filed on Fifth Amendment due process and equal protection grounds, the lawsuit seeks a declaration that the enforcement of the cosmetology law and regulations, in a manner that unreasonably impairs the ability of Mr. Uqdah and Ms. Ferrell to operate a legitimate business, is unconstitutional. If successful, this lawsuit will establish a precedent that will give hope to aspiring entrepreneurs that America remains a land of opportu-nity.
Prepared for the Institute for Justice by Clint Bolick and David Legge
The Institute for Justice advances a rule of law under which individuals control their destinies as free and responsible members of society. Through strategic litigation, training, and outreach, the Institute secures greater protection for individual liberty, challenges the scope and ideology of the Regulatory Welfare State, and illustrates and extends the benefits of freedom to those whose full enjoyment of liberty is denied by government.
For more information contact:
Institute For Justice
1717 Pennsylvania Avenue, N.W.
Arlington, VA 22203
1. Quoted in James A. Dorn, "Judicial Protection of Economic Liberties," in James A. Dorn and Henry G. Manne, eds., Economic Liberties and the Judiciary (Fairfax, VA: George Mason University Press, 1987), p. 4.
2. S. David Young, The Rule of Experts: Occupational Licensing in America (Washington, DC: Cato Institute, 1987), pp. 4-5.
3. See Young; Simon Rottenberg, ed., Occupational Licensure and Regulation (Washington, DC: American Enterprise Institute, 1980); and Benjamin Shimberg, et al., Occupa-tional Licensing: Practices and Policies (Washington, DC: Public Affairs Press, 1973).
4. Lee Benham, "The Demand for Occupational Licensure," in Rottenberg, pp. 13-14.
5. Clint Bolick, Unfinished Business: A Civil Rights Strategy for America's Third Century (San Francisco: Pacific Research Insti-tute, 1990), pp. 47-76.
6. Testimony of Harry Cohen, Hearing before the House Committee on the District of Columbia on H.R. 3891, March 15, 1937, p. 43.
7. Walter Williams, The State Against Blacks (New York: McGraw-Hill, 1982), p. xvi.
8. Stuart Dorsey, "The Occupational Licensing Queue," Journal of Human Resources (Summer 1980), pp. 424-428.
9. Shimberg, pp. 164-166.
00. Letter from Harry Cohen, District Beauticians' Association, to U.S. Senate District of Columbia Committee Chairman, dated June 17, 1937.
11. Cohen testimony, House Committee hearing, p. 41.
22. Statement of Dr. George H. Ruhland, House Committee hearing, p. 8.
33. Report on H.R. 6685 by the Commissioners of the District of Columbia to Sen. William H. King, June 25, 1935.
44. Congressional Record, 75th Congress, June 14, 1937, page 5682.
55. District of Columbia Bar, Regulation of Cosmetologists in the District of Columbia and accompanying summary (1985).