By Ray Downs
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By Sean Kelley
Salon owner Steven Preston Kootman enjoys a bird's-eye view of his business even when he's at home in the Moorlands neighborhood of Clayton. All he has to do is turn on his computer. There, displayed in black and white, is a live video broadcast from the cameras he's installed at his Preston Salon.
Translucent curtains spill from the ceiling of the stylish parlor. Polished chrome and mirrors decorate the walls. Not captured on film, but evident to anyone who steps foot in the salon, is the soft beat of house music and the sweet scent of European shampoos and pomades.
With its combination of good looks and prime real estate, Preston Salon located at the corner of Hanley Road and Wydown Boulevard has long drawn distinguished clients, especially professional athletes. Cardinals outfielder Jim Edmonds used to get his hair clipped there, as did Mark McGwire. Rams running back Marshall Faulk was also a regular. But on this Thursday morning, just a few days before the Christmas rush, the salon is empty save for one client.
For the moment, though, Kootman isn't fazed by the lack of business. Outfitted in designer jeans and a tight black T-shirt, he's focused on the grainy video of his employees displayed on the computer monitor. The salon owner is in the middle of a protracted legal battle with three former employees who, he alleges, violated non-compete agreements, stole company trade secrets and illegally lured away customers when they left his salon to work for his competitor.
Worse still is his sinking suspicion that more traitors are in his midst. "I call them 'sleeper cells,'" explains the 50-year-old Kootman as he jostles the controls of the video cameras to observe two employees conversing inside the salon. "They get these ideas that they can make wild amounts of money elsewhere, and then they plant their bad seeds with other stylists. Their goal, I'm sure, is to destroy the salon industry."
To the casual observer, Kootman's diatribes may seem a tad paranoid, but don't tell that to scores of other St. Louis salon owners who share his concerns. Behind the fluffed and primped veneer of the beauty biz, they say, is a cutthroat industry where corporate sabotage, client poaching and tax dodging have become as commonplace as blond highlights and hair extensions.
Fueling the seamy underside of the hair-care industry, claims Kootman, is the rise over the past twenty years of "rental-booth" salons. Unlike traditional hair studios, where hairdressers work on commission, stylists at rental-booth salons operate as their own bosses, paying rent to the studio but keeping whatever they charge their customers. All three stylists in Kootman's lawsuits left Preston for establishments that operate as rental-booth salons.
"They don't take into consideration the time and money I spent training them and helping them build up a clientele," Kootman says. "If you go into a store and walk out with armloads of clothes you didn't pay for, that's stealing. Well, this is the same thing. Instead of clothes, they're stealing customers."
In the first of his lawsuits, scheduled for trial next week in St. Louis County, Kootman claims his business suffered more than $450,000 in damages and lost revenue when former employee Christy Parson quit to set up shop at a rival's studio less than a mile from Preston Salon. The non-compete agreement he had with Parson, maintains Kootman, prohibited her from working within ten miles of his salon for a period of one year following her resignation from his studio.
In court documents, Kootman claims that the stylist illegally contacted many of his clients, including Rams outside linebacker Pisa Tinoisamao, who became Parson's first customer at her new place of employment. All told, says Kootman, the hairdresser took dozens of customers with her when she left. Parson declined to comment for this article, as did her lawyer, Noel Sevastianos, who would only say, "The truth will come out in the trial."
Tom Blumenthal, a Clayton-based attorney representing hairdressers Heather Penberthy and Tonya Portell in a suit Kootman has filed against them, calls the salon owner's claims "completely without merit." Kootman is seeking more than $700,000 in damages from Penberthy, Portell and J'ai Transforme Salon in Creve Coeur, where the stylists currently work.
"It seems pretty clear in this industry that the customer in almost every case believes they're dealing with the hairstylist, not the salon," says Blumenthal, who will argue his case before a St. Louis County jury in February. "If that is true, then the salon does not have a legally protected interest to enforce a non-compete agreement."
The attorney further charges that Kootman harassed Penberthy and Portell into leaving the salon by installing video cameras, illegally deducting wages and purposefully mismanaging their bookings. In addition, Blumenthal cites case law comparing non-competes such as those imposed by Kootman to "serfdom."
But many salon owners say non-compete contracts are the rule, not the exception.
"The industry has grown up," explains Cary O'Brien, owner of the St. Charles salon and spa that bears his name. "Twenty-five years ago, people were cutting hair in their kitchen. Now it's a business. We have computer systems, health care, retirement-savings plans, paid vacations and insurance for employees. The non-competes are simply a way of protecting that business."
O'Brien says that he, too, has taken his share of stylists to court for violating non-compete agreements. He doesn't rule out more lawsuits so long as the number of rental-booth salons continues to rise. As a board member of The Salon Association, an Arizona-based lobbying arm of the hair-care industry, O'Brien says rental-booth studios now comprise nearly 90 percent of the salon industry nationwide. In Missouri, rental-booth operations account for fewer than half of all hair studios, according to the state's cosmetology licensing board, but the gap is quickly narrowing.
The reason for the rising tide of rental booths is simple, says O'Brien. "At its roots, it's a tax issue. Rental booths promise stylists more money, but it's only because there is no third-party salon owner making sure the employees pay their taxes," he explains. "Many of these rental booths operate on cash only no checks, no credit cards nothing for the IRS."
Even more troubling, says Denise Edgar, owner of D-Zine Hair & Art Studio in University City, is the dubious manner in which rental-booth salons solicit the stylists in her employ they send recruitment letters directly to D-Zine.
"Then there are the fake appointments," Edgar adds. "They'll book an entire wedding party for haircuts and coloring, and then no one will show up. Their objective is to get your employees so frustrated that they'll leave for another salon."
A non-compete can guard against such subterfuge. At the same time, clarifies Edgar, the contracts are not meant to be "leg irons" for employees who have justifiable reason to leave an employer.
Kootman says his goal is not to prevent his former stylists from earning a living; he just doesn't want them interfering with his business. On that issue, the salon owner remains as prickly and defiant as the spiked and tussled coiffure atop his head.
"They say I'm the Big Bad Wolf and I'm lawsuit-crazy," Kootman says. "Well, I'm here to say Little Red Riding Hood is not as innocent as she sounds. This isn't a fairy tale. It's business, and they broke the rules."
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