“I came to this country because it offered better opportunities to start a business and make my dreams come true. But for years, Louisiana worked to keep me and my employees from making a living.”
That is how Lata Jagtiani, who emigrated from India, frames her yearslong struggle to sustain her family-owned business in Louisiana under a senseless state licensing scheme.
Now, after a two-year court battle, state regulators have cut back the needless red tape that inhibited her business.
Jagtiani opened the Threading Studio & Spa in 2012 and, as the name conveys, offered threading: a traditional Eastern hair removal technique that is in high demand in the United States.
Since 2010, the Louisiana Board of Cosmetology has required anyone who performs threading to get a state esthetician’s license. That demands hundreds of hours of instruction, three exams, and thousands of dollars. It does not teach threading.
Jagtiani’s licensed colleagues could not thread because they hadn’t learned how. To keep her threading business going, Jagtiani employed unlicensed threaders.
As a result, the board fined her and ordered her to fire the unlicensed employees.
Predictably, her business suffered.
Surely, the fired workers suffered.
With the help of the Institute for Justice, a nonprofit law firm, Jagtiani sued the board, claiming that the licensing requirement violated the state’s constitutional protections of equal protection and due process.
Two others joined Jagtiani as plaintiffs in the case: Ushaben Chudasama, a threader who emigrated from India in 1993, and Panna Shah, a threader who emigrated from India in 2006.
According to the the Institute for Justice, “the Louisiana Supreme Court has recognized that laws that restrict the right to earn a living must be rationally related to a legitimate government interest.”
Forcing immigrants to pay thousands of dollars to spend time in classes that won’t teach a trade they already know hardly seems rational.
After a state district court last year rejected the board’s motion to dismiss the lawsuit, the board began to rethink its rules.
Earlier this year, the board created a threading permit to allow Jagtiani, Chudasama, Shah, and other threaders to work following a basic sanitation exam.
When the first threaders received the new permits, the Institute for Justice attorney who represented the threaders, Renée Flaherty, called it “a great day for hundreds of hardworking Louisianans who want to earn an honest living in a time-honored profession many learned as children.”
The new rule, Flaherty said, “will remove pointless and burdensome barriers to working as an eyebrow threader in Louisiana. The state’s cosmetology board has done the right thing by ending its unconstitutional licensing scheme.”
The victory in Louisiana followed another Institute for Justice case, Patel v. Texas Department of Licensing and Regulation (2015), where the Texas Supreme Court ruled that similar eyebrow threading licensing requirements violated the Texas state Constitution.
The Louisiana board deserves kudos for changing its policy, but many burdensome occupational licensing laws remain on the books.
These rules can be used to protect the public’s health and welfare, but too often they are employed to eliminate competition.
“Since 1950,” notes Heritage Foundation senior legal fellow Paul J. Larkin Jr., “the percentage of the domestic workforce in positions subject to a licensing requirement has multiplied 500 percent and now stands at no less than 25 percent of the economy.”
Many of these rules bear no credible relationship to public health and safety—such as licenses for florists, plumbers, and motion picture projectionists—yet they cover so many different jobs that they are “now one of the nation’s principal forms of economic regulation.”
And these rules can have steep administrative, civil, and criminal penalties.
For example, Arizona requires at least 1,000 training hours and an exam before someone can use even a blow dryer to style hair. Failure to comply can result in up to six months in prison and fines.
Fortunately, state lawmakers are beginning to realize the economic and societal costs of these regulations often outweigh any purported benefit.
In fact, Louisiana lawmakers are considering a bipartisan bill that would call for a review of all state licensing schemes. House Bill 562 provides that “the right of an individual to pursue a lawful occupation is a fundamental right,” and “where the state finds it necessary to displace competition, it shall use the least restrictive regulation to protect consumers from present, significant and empirically substantiated harms threatening public health and safety.”
That would go far to protect the state’s workers from anti-competitive rules.
Virginia also has taken bipartisan steps toward reducing the regulatory burden on economic activity in the state. In March, Gov. Ralph Northam, a Democrat, approved a three-year review of state regulations with a goal of eliminating as much as 25 percent of the net current requirements “to access government services or operate and conduct business.”
That also provides an opportunity for lawmakers to clear out the undergrowth of arbitrary licensing rules.
Hopefully other states will follow these states’ lead and reinvigorate the fundamental right to earn a living.
