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Glen v. Galardi South Enterprises, Inc.

United States District Court, N.D. Georgia, Atlanta Division

March 23, 2015

SAMETHA GLEN and SIDNEY DAVIS, individually and on behalf of all persons similarly situationed, Plaintiffs,
v.
GALARDI SOUTH ENTERPRISES, INC., GALARDI SOUTH ENTERPRISES CONSULTING, INC., PONY TAIL, INC. d/b/a Onyx, TERRI GALARDI, and MICHAEL KAPP, Defendants.

OPINION AND ORDER

WILLIAM S. DUFFEY, Jr., District Judge.

This matter is before the Court on Defendants Galardi South Enterprises, Inc.'s, Galardi South Enterprises Consulting, Inc.'s, Pony Tail, Inc.'s, doing business as "Onyx, " Terri Galardi's, and Michael Kapp's Motion to Dismiss [24] ("Motion to Dismiss"). Also before the Court are Plaintiff Sametha Glen's ("Glen") and Sidney Davis' ("Davis") (together, "Plaintiffs") "Rule 15 and 21 Motion for Leave to File Second Amended Complaint" [25] ("Motion to Amend") and Motion for Conditional Certification of Collective Action and Issuance of Court Approved notice to the Collective Action Class Members [26] ("Motion for Conditional Certification").[1]

I. BACKGROUND

On November 6, 2013, Plaintiffs filed their Complaint [1], alleging that Defendants violated 29 U.S.C. §§ 206 and 207 of the Fair Labor Standards Act ("FLSA") for failing to pay the minimum wave or overtime wages to Plaintiffs and others similarly situated. On December 11, 2014, Plaintiffs filed their First Amended Complaint [4] ("First Amended Complaint") against Defendants.

Plaintiffs allege that they are both current employees of Defendants, and are employed at a club called Onyx, located in Atlanta, Georgia. (Amended Complaint ¶¶ 6-7). Plaintiffs allege that Defendant Terri Galardi ("Galardi") is the controlling shareholder and exerts day-to-day operational and management control over Galardi South Enterprises, Inc. ("GSE"), Galardi South Enterprises Consulting, Inc. ("GSEC") and Pony Tail, Inc. ("Pony Tail") which, in turn, own and operate Onyx. (Id. ¶ 9). Plaintiffs allege that Michael Kapp ("Kapp") is the Chief Operating Officer of GSEC and directs day-to-day operations of Pony Tail and Onyx. (Id. ¶ 14).

Plaintiffs allege, in their First Amended Complaint, that Defendants employ female entertainers at their nightclubs located throughout the United States, and that Defendants categorize these entertainers as independent contractors. (Id. ¶¶ 17-18). Plaintiffs allege that, under the FLSA, they are not independent contractors but rather employees and that Defendants categorize them as independent contractors to avoid paying wages and overtime to Plaintiffs and similarly situated persons. (Id. ¶ 18). Plaintiffs allege that Defendants do not require the entertainers to have any specialized background and that Defendants: (1) establish specific work schedules for the entertainers; (2) require entertainers to dance at specified times and in a specific manner on stage and for customers; (3) control the entertainers' attire and interactions with customers; (4) set the price the entertainers are allowed to charge for dances; (5) require entertainers to attend meetings at Defendants' business; and (6) established uniform written guidelines and policies governing entertainers conduct at Defendants' clubs. (Id. ¶¶ 19-23, 27).

Plaintiffs allege further that Defendants require Plaintiffs and the other entertainers to pay Defendants a specific amount, referred to as a "tip out" or "bar fee" to work a given shift. (Id. ¶ 28). The fee is generally at least $60 per shift. (Id. ¶ 30). If any of the entertainers are late for a shift, fail to appear for a shift, or otherwise violate Defendants' policies, they are charged additional fees or fines. (Id. ¶ 31). Plaintiffs allege that these bar fees, other fees, and fines are unlawful kickbacks under the FLSA. Plaintiffs allege that they and other entertainers were not paid wages for their work, did not receive overtime wages when they worked more than forty (40) hours per week, and that none of the entertainers are considered exempt employees under the FLSA. (Id. ¶¶ 34-40).

On March 17, 2014, Defendants filed their Motion to Dismiss, asserting that Plaintiffs entered into binding arbitration agreements (the "Arbitration Agreements") with Onyx and that Plaintiffs' claims are, thus, required to be dismissed.[2]

On March 17, 2014, Plaintiffs filed their Motion to Amend. Plaintiffs' Proposed Second Amended Complaint [25-1] ("Second Amended Complaint") clarifies the identity of Plaintiffs and Defendants, and seeks (i) to add Crystal Morris ("Morris") as a named plaintiff, and (ii) to add Trop, Inc. ("Trop"), doing business as "Pink Pony, " and Dennis Williams ("Williams") as named defendants. The Second Amended Complaint also adds allegations that Morris is a former employee of Defendants, and was employed at a club called Pink Pony, located in Atlanta, Georgia. (Second Amended Complaint ¶ 8). Plaintiffs further allege that Williams is the Chief Financial Officer ("CFO") and Secretary of Trop and Pony Tail, the CFO of GSEC, the Secretary of GSE, and the general manager of Pink Pony. (Id. ¶ 17). Plaintiffs allege that GSE and GSEC, collectively or separately, under the direction and control of Galardi, Kapp, and Williams, own, direct, and control Pony Tail and Trop and, through these entities, own, direct, and control Onyx and Pink Pony. (Id. ¶ 12). Plaintiffs allege that both Pony Tail and Trop are shell corporations through with GSE, GSEC, Galardi, Kapp, and Williams control Onyx and Pink Pony, respectively. (Id. ¶¶ 13-14). Plaintiffs' Second Amended Complaint provides greater detail concerning their factual allegations against Defendants, as well as Trop and Williams, and seeks to assert a collective action against Defendants, Trop, and Williams, on behalf of all current and former entertainers who worked at Onyx or Pink Pony.

On March 17, 2014, Plaintiffs filed their Motion for Conditional Certification, requesting that the Court: (1) conditionally certify this case as a collective action; (2) approve the proposed notice attached as Exhibit 1 to the Motion for Conditional Certification; (3) order Defendants to provide contact information for all potential class members within five (5) days of its Order; (4) permit Plaintiffs to issue notice by mail, email, and via dedicated website with additional notice as warranted; and (5) order Defendants to post notice at Onyx and Pink Pony in laminated poster format with all pages of the notice visible simultaneously.

On May 8, 2014, the parties filed their Joint Motion to Stay Discovery Deadlines Pending the Court's ruling on (1) Defendants' Motion to Dismiss and (2) Named Plaintiffs' Motion for Conditional Certification [54] ("Joint Motion for Stay"). On June 16, 2014, the Court granted [56] the Joint Motion for Stay.

II. DISCUSSION

A. Legal Standard for Motion to Amend Complaint and to Add Parties

Rule 15(a) of the Federal Rules of Civil Procedure allows a plaintiff to file one amended complaint as a matter of course, if the amended complaint is filed either within 21 days of service of the original complaint or within 21 days of the defendant's filing of a responsive pleading or Rule 12 motion to dismiss. See Fed.R.Civ.P. 15(a)(1). Amended complaints outside of these time limits may be filed only "with the opposing party's written consent or the court's leave." See Fed.R.Civ.P. 15(a)(2).

Rule 15 of the Federal Rules of Civil Procedure provides that "[t]he court should freely give leave [to amend] when justice so requires." Fed.R.Civ.P. 15(a)(2). Absent "undue delay, bad faith, dilatory motive or undue prejudice, leave to amend is routinely granted." Forbus v. Sears Roebuck & Co. , 30 F.3d ...


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