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Burrell v. Toppers International Inc

United States District Court, M.D. Georgia, Athens Division

April 18, 2017

CHRISTIE BURRELL, individually and on behalf of all others similarly situated, Plaintiff,
v.
TOPPERS INTERNATIONAL, INC., DARNELL LEWIS GARDNER, and SANDRA GARDNER, Defendants.

          ORDER

          CLAY D. LAND CHIEF U.S. DISTRICT COURT JUDGE

         ORDER During the pretrial conference in this matter, the Court denied Plaintiffs' partial summary judgment motion in an oral ruling from the bench. Min. Order, Apr. 4, 2017, ECF No. 78. Plaintiffs filed a motion for reconsideration. The motion (ECF No. 80) is granted to the extent set forth in this Order.

         I. Plaintiffs Are Employees, Not Independent Contractors

         Defendant Toppers International, Inc. is an adult night club. Plaintiffs are entertainers at the club, and they contend that Toppers improperly classified them as independent contractors and did not pay them minimum wage as required by the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219. It is undisputed that Toppers does not pay any wages to entertainers, and it does not include entertainers in payroll. Pretrial Order Ex. A, Material Undisputed Facts ¶ 7, ECF No. 79-1. Instead, entertainers rely solely on tips from customers to earn money for their work at Toppers. Id. ¶ 8. Plaintiffs argue that the undisputed facts demonstrate that they are employees within the meaning of the FLSA, not independent contractors. The Court agrees.

         “To determine whether an individual falls into the category of covered ‘employee' or exempted ‘independent contractor, ' courts look to the ‘economic reality' of the relationship between the alleged employee and alleged employer and whether that relationship demonstrates dependence.” Scantland v. Jeffry Knight, Inc., 721 F.3d 1308, 1311 (11th Cir. 2013). “This inquiry is not governed by the ‘label' put on the relationship by the parties or the contract controlling that relationship, but rather focuses on whether ‘the work done, in its essence, follows the usual path of an employee.'” Id. (quoting Rutherford Food Corp. v. McComb, 331 U.S. 722, 729 (1947)).

         The courts consider six main factors in determining the economic reality of the parties, and the Court will address each factor in turn.

         A. Nature and Degree of Control

         The first factor is “the nature and degree of the alleged employer's control as to the manner in which the work is to be performed.” Id. at 1312. It is undisputed that Toppers exercised significant control over the manner in which the entertainers' work was performed. Toppers set the entertainers' schedules and would not permit entertainers to work busy shifts unless they also worked slower shifts. Material Undisputed Facts ¶¶ 38-41. Entertainers were fined if they arrived late, left early, missed a shift, or missed a stage call. Id. ¶¶ 42-43, 55. Entertainers had to pay a mandatory “house fee” at the beginning of each shift, a mandatory “tip out” at the end of each shift, and various fees to other individuals who worked at Toppers. Id. ¶¶ 35, 37, 61-63. Toppers set minimum prices for table dances and lap dances, had rules on how entertainers danced on the main stage, and required entertainers to share tips with other entertainers who shared the main stage with them. Id. ¶¶ 5, 56-57, 59. Toppers had rules on entertainers' apparel, hair, and nails. Id. ¶¶ 51-52. Toppers also had written policies and procedures, and entertainers could be disciplined-including terminated-for violating those policies and procedures. Id. ¶¶ 66, 68-69. Based on all of these undisputed facts, Toppers exercised significant control over the work of its entertainers. This factor weighs in favor of finding that the entertainers are employees.

         B. Opportunity for Profit or Loss

         The second factor is “the alleged employee's opportunity for profit or loss depending upon [her] managerial skill.” Scantland, 721 F.3d at 1312. Although the entertainers could negotiate the rate customers paid them for dances (above the minimum rate set by Toppers), they had limited opportunities to increase their profit. And, other than the mandatory fees they had to pay to dance at Toppers, the entertainers had no risk of loss. In contrast, Toppers had extensive control over the entertainers' opportunity for profit because Toppers controlled the location, facilities, marketing, and inventory of beverages for the club. And Toppers had a much bigger risk of loss than the entertainers because Toppers was responsible for all rents, utilities, maintenance, insurance, and advertising for the club. Thus, this factor weighs in favor of finding that the entertainers are economically dependent on Toppers and are therefore its employees.

         C. Investment in Equipment

         The third factor is “the alleged employee's investment in equipment or materials required for his task, or his employment of workers.” Scantland, 721 F.3d at 1312. At Toppers, entertainers are responsible only for their own makeup, hair, and apparel. Material Undisputed Facts ¶ 77. Toppers was responsible for all other investments necessary for the entertainers to do their work, including the facility, stage, marketing, bar, and security. This factor weighs in favor of finding that the entertainers are economically dependent on Toppers and are therefore its employees.

         D. Special Skill

         The fourth factor is “whether the service rendered requires a special skill.” Scantland, 721 F.3d at 1312. It is undisputed that no prior experience or formal training is required to work as an entertainer at Toppers. Material Undisputed Facts ΒΆΒΆ 78-79. Rather, it appears that the only criteria on which entertainers are selected are physical attractiveness ...


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