The Ninth Circuit affirmed the district court’s orders granting partial summary judgment, damages, and injunctive relief to the United States Secretary of Labor against nail salon owners Nicole Brown and Asia Trinh for violations of the Fair Labor Standards Act (FLSA). The court held that the district court did not abuse its discretion in imposing discovery sanctions under Federal Rule of Civil Procedure 37(e) and 37(b)(2) for the defendants’ deletion of electronically stored information, failure to produce records in native format, and other vexatious conduct during discovery. The appellate court found these sanctions were no greater than necessary to cure the prejudice caused by the spoliation of text messages and surveillance footage critical to establishing workers’ hours and control. Additionally, the court affirmed the exclusion of unauthenticated exhibits and documents not filed in compliance with local rules. Regarding the merits of the FLSA claims, the court applied de novo review and concluded that the nail technicians were employees rather than independent contractors because the defendants exerted near-complete control over their work schedules, assignments, and discipline, provided equipment and space, and controlled customer relations. The court further determined that Brown and Trinh qualified as “employers” under the FLSA due to their significant ownership interest and operational control. The court affirmed the finding of willful violations based on evidence that the defendants attempted to evade compliance by coaching employees on how to respond to investigators and backdating agreements, which triggered the three-year statute of limitations. Consequently, the district court’s award of back wages, liquidated damages, and a permanent injunction prohibiting future FLSA violations was upheld. The practical consequence is that the judgment in favor of the Secretary of Labor stands, requiring the defendants to pay the assessed damages and comply with the permanent injunction. The defendants’ appeals regarding sanctions, evidentiary rulings, and other procedural arguments were rejected, leaving the district court’s orders fully effective.