United States District Court, N.D. Georgia, Atlanta Division
OPINION AND ORDER
MICHAEL L. BROWN, UNITED STATES DISTRICT JUDGE
Brezzy Hurst (“Plaintiff”) was a dancer and
entertainer at The Follies club. She filed suit against
Defendants claiming they violated the Fair Labor Standards
Act (“FLSA”), 29 U.S.C. § 201 et
seq. Specifically, she claims Defendants Surrey White,
Steven Youngelson, and WBY, Inc. misclassified her as an
independent contractor rather than an employee and failed to
pay her minimum wages as required by the FLSA. Defendants and
Plaintiff filed opposing motions for summary judgment as to
whether Plaintiff was an employee under the FLSA and whether
Defendants White and Youngelson were employers under the Act.
(Dkts. 86, 87.) Plaintiff also moved for summary judgment as
to enterprise coverage, the creative-professional exception
to the FLSA, the offset defense, and violation of the
FLSA's minimum wage provisions. The Court grants
Plaintiff's motion (Dkt. 86) and denies Defendants'
motion (Dkt. 87).
judgment is appropriate when “the movant shows that
there is no genuine dispute as to any material fact and that
the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). “No genuine issue of material fact
exists if a party has failed to ‘make a showing
sufficient to establish the existence of an element . . . on
which that party will bear the burden of proof at trial.'
” Am. Fed'n of Labor & Cong. Of Indus.
Orgs. v. City of Miami, 637 F.3d 1178, 1186-87 (11th
Cir. 2011) (quoting Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986)). An issue is genuine when the evidence
is such that a reasonable jury could return a verdict for the
nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249-50 (1986).
moving party bears the initial responsibility of asserting
the basis for her motion. Catrett, 637 F.3d at 323.
The movant is not, however, required to negate the
non-movant's claim. Id. at 324. Instead, the
moving party may meet her burden by “
‘showing' - that is, pointing to the district court
- that there is an absence of evidence to support the
non-moving party's case.” Id. After the
moving party has carried its burden, the non-moving party
must present competent evidence that there is a genuine issue
for trial. Id.
court must view all evidence and factual inferences in a
light most favorable to the non-moving party. Samples v.
City of Atlanta, 846 F.2d 1328, 1330 (11th Cir. 1988).
But “the mere existence of some alleged
factual dispute between the parties will not defeat an
otherwise properly supported motion for summary judgment; the
requirement is there be no genuine issue of
material fact.” Anderson, 477 U.S. at
Follies is a restaurant and bar in Chamblee, Georgia, where
women dance in the nude to entertain men. (Dkt. 87-1.) The
Follies has between 60 and 100 female entertainers with
varying numbers working at any one time. (Dkt. 98 at
¶¶ 23, 60.) Plaintiff worked as an adult
entertainer at The Follies from around November 2010 through
April 2014. (Dkt. 86 at ¶ 5.) Defendants treated
Plaintiff as an independent contractor, allowing her to keep
money men paid her to dance for them rather than paying her
the minimum wage required by the FLSA. (Dkt. 98 at
¶¶ 8, 36.) Plaintiff claims Defendants
misclassified her as an independent contractor under the FLSA
and should have treated her as an employee, including by
paying her the minimum wage. (Dkt. 29; 86-6.) Plaintiff filed
this lawsuit to recover unpaid wages.
Employee or Independent Contractor
FLSA distinguishes between employees and independent
contractors. Employees are entitled to be paid a minimum wage
and overtime wages; independent contractors are not.
Scantland v. Jeffry Knight, Inc., 721 F.3d 1308,
1311 (11th Cir. 2013). The purpose of the act is to
“protect those whose livelihood is dependent upon
finding employment within the business of others.”
Mednick v. Albert Enterprises, Inc., 508
F.2d 297, 300 (5th Cir. 1975). The determination of whether a
worker is an employee or an independent contractor is a
question of law for the court. Patel v. Wargo, 803
F.2d 632 n.1 (11th Cir. 1986). In making this determination,
courts apply the so-called “economic reality test,
” looking beyond labels that the parties may have used
and assessing the level of economic independence that the
worker actually had from the employer. The ultimate question
is whether the worker is so dependent upon the business that
she “come[s] within the protection of the FLSA or [is]
sufficiently independent to lie outside its ambit.”
Usery v. Pilgrim Equip. Co. Inc., 527 F.2d 1308,
1311-12 (5th Cir. 1976). Courts often frame this inquiry as
“whether the individual is ‘in business for
[her]self.' ” Stevenson v. Great Am. Dream,
Inc., No. 1:12-cv-3359, 2013 WL 6880921, at *2 (N.D.Ga.
Dec. 31, 2013).
Court may consider several factors to evaluate the economic
reality, including “(1) the nature and degree of the
alleged employer's control as to the manner in which the
work is to be performed; (2) the alleged employee's
opportunity for profit or loss depending upon his managerial
skill; (3) the alleged employee's investment in equipment
or materials required for his task, or his employment of
workers; (4) whether the service rendered requires a special
skill; (5) the degree of permanency and duration of the
working relationship; [and] (6) the extent to which the
service rendered is an integral part of the alleged
employer's business.” Scantland, 721 F.3d
at 1312. These factors are not exclusive, and no single
factor must control. Rather, these factors guide the
Court's analysis of economic dependence - the ultimate
question being whether the worker was dependent upon finding
employment in the business of another or whether the employee
was capable of running an independent business.
Usery, 527 F.2d at 1311.
conducting this analysis, a court should not assume that a
worker is an independent contractor because he or she has
some characteristics of an independent contractor.
Mednick, 508 F.2d at 302. To make this assumption
would be to allow employers to get around the goals of the
FLSA by granting some independence to workers who are, in
reality, dependent upon their employer's business.
Usery, 527 F.2d at 1311. So when the analysis can go
either way, a court must err on behalf of the worker by
applying an expansive definition of the term
other courts have considered the relationship between adult
entertainers and the clubs where they perform, nearly
universally finding adult entertainers to be employees.
See Hanson v. Trop, Inc., 167 F.Supp.3d 1324, 1328
(N.D.Ga. Mar. 3, 2016); Vaughan v. M-Entm't
Properties, LLC, No. 1:14-CV-914, 2016 WL 7365201, at *6
(N.D.Ga. Mar. 15, 2016) (collecting cases). This Court agrees
with the weight of authority and, after applying the
economic-reality test to the undisputed facts of this case,
concludes that Plaintiff was an employee under the FLSA.
The Nature and Degree of Control
first factor is the nature and degree of the alleged
employer's control over how the alleged employee performs
her work. Other courts have found that clubs with adult
entertainment have control over the work environment of their
entertainers. Hanson, 167 F.Supp.3d at 1328 (finding
control based in part on the club “setting minimum
prices for services, requiring entertainers to tip club
employees, and requiring entertainers to report their
earnings to the club”); Vaughan, 2016 WL
7365201, at *12 (finding control based in part on the fact
that the club “exercises significant control over the
atmosphere, clientele and operation of the club”)
(internal citations omitted); Stevenson, 2013 WL
6880921 (finding control when plaintiff controlled her own
hours on the basis that “in the total context of the
relationship . . . the right to set hours [does not indicate]
such lack of control by [the defendant] as would show these
operators are independent from it.”) (alternations in
original) (internal citations omitted). Defendants argue that
those cases are irrelevant because Plaintiff had more control
over her work than those plaintiffs.
of that comparison, the undisputed facts show that The
Follies exercised significant control over Plaintiff's
work. When Plaintiff arrived at the club, she was required to
park her car with the valet attendant and leave her key with
him. (Dkt. 79 at 22:22-24.) She was then required to check in
with the house mom and pay a “house fee.” (Dkts.
84 at 138:22-25; 98 at ¶ 47.) Defendants used the house
fee to control the shifts that dancers worked. The amount of
the fee depended on the time an entertainer arrived to work
and the time she left. (Id. at ¶ 48.) Leaving
earlier meant paying higher house fee. (Id.) For
example, dancers who chose to leave before the 3:00 a.m.
closing time paid a higher fee than dancers who chose to stay
until 3:00 a.m. This structure certainly incentivized dancers
to stay later into the night, entertaining patrons and
keeping them at The Follies until closing time.
also controlled the conditions under which Plaintiff worked.
Defendants required Plaintiff to purchase two drink tickets
(called “Follies Dollars”) every shift she
worked. (Dkts. 84 at 30:9-14; 77-1.) She could use the
tickets for her own drinks or could sell them to customers.
(Dkt. 100 at 10.) But, she had to buy them.
Plaintiff's income came from table dances that she
performed for club patrons. (Dkt. 84 at
206:23-24.) She was not free to set the prices she
charged customers for table and VIP dances. (Dkt. 98 at
¶ 44.) Defendants set minimum prices for those dances,
and she could not deviate from them. (Dkt. 79 at 43:13-18.)
They also set the cover charge that customers had to pay for
entry into the club. (Dkt. 98 at ¶¶ 13-15.)
Plaintiff had no ability to waive or alter the charge for her
“customers.” Defendants also “had ultimate
control over which individuals were allowed to enter The
Follies as customers.” (Id.) Indeed,
Defendants prohibited women from coming into the club to see
Plaintiff perform unless accompanied by a man. (Dkt. 98 at
¶ 17.) Defendants hired bartenders, waitresses, DJs, and
security guards. (Dkt. 79 at 71:22-72:8.) They set the hours
of operation. (Id. at 68:11-13.) They also
determined what behavior was or was not appropriate at the
club. (Dkt. 86-3 at ¶ 4.)
once she arrived at work, Plaintiff was not free to leave. As
explained above, upon arrival at work, she had to leave her
car key with the club's valet attendant. At the end of
the night, she was required to take a breathalyzer test in
the presence of a house mom or manager. If she passed the
test, they gave her a “See Ya” pass. (Dkts. 84 at
336:8- 20; 79-1.) She had to present her See Ya pass to the
valet attendant to get her keys back so she could leave.
(Dkts. 84 at 87:9-12; 79 at 50:6- 13.) Defendants instructed
the valet attendants not to give dancers (including
Plaintiff) the keys to their cars unless they presented a See
Ya pass. At closing time, The Follies also required Plaintiff
and the other dancers to remain inside until all the
customers had left the parking lot. (Dkt. 84 at 85:4-86:2.)
claims she also had to tip out the bar tenders, DJ, and house
mom, and get them to sign her See Ya pass to confirm she paid
them before she could leave. (Dkt. 84 at 335-337.) The See Ya
pass - created by Defendants - has spaces for their
signatures, thus supporting her claim. (Dkt. 79-7.) In
addition, the DJs kept “sign-in sheets” that
listed each dancer and included a space for each dancer
labeled “tipped out.” (Dkts. 79-11; 79-12; 79-13;
79-14.) It also had a note stating “[t]here will be no
arguing or getting angry with [the e]ntertainers. If they do
not tip correctly, have the Manager talk with them.”
(Id.) This document supports Plaintiff's claim
that she was required to tip the DJ and that The Follies
manager had some level of control over her if she failed to
do so. Indeed, the documents are consistent with
Plaintiff's testimony that she once failed to tip the DJ
but The Follies' manager allowed her to come back to work
without any punishment. (Dkt. 84 at 226:17-228:3.)
dispute that they required Plaintiff and other dancers to pay
these other workers. (Dkt. 100 at 11.) In support of this,
Defendants cite Plaintiff's admission that the house moms
sometimes allowed her to leave without paying them. She
explained, however, that in these situations the house mom
expected Plaintiff to pay the amount owed on her next shift.
(Dkt. 84 at 286:16-23.) Defendants also presented an
affidavit from a former dancer and current house mom, Abigail
Dunahoo, who averred that tipping was voluntary and customary
but not mandatory. (Dkt. 87-7 at ¶ 9.) A genuine issue
of fact exists as to whether tipping was mandatory or simply
customary. Likewise, a genuine issue of fact exists
as to whether Plaintiff was required to perform onstage. She
claims she was; Defendants claim she was not. (Dkt. 92-2 at
undisputed, however, that, before she could get her keys and
leave, Plaintiff had to pass a breathalyzer test in the
presence of a house mom, pay her house fee, and present a See
Ya pass to confirm she had done both. (Dkt. 79-16 at ¶
55.) If Plaintiff did not pass the breathalyzer test, the
club would keep her car keys and send her home in a cab or
with a friend. (Dkt. 84 at 333:19-21.) On occasion, when The
Follies closed at 4 a.m. and 100 entertainers needed to check
out simultaneously, Plaintiff had to wait to leave for an
hour and a half. (Id. at 83:22-25.)
these rules - requiring Plaintiff to pay a house fee,
requiring her to purchase and resell drink tickets,
controlling which customers she could entertain, setting
minimum prices she could charge for services, controlling the
hours of operation, requiring her to jump through hoops to
leave, and charging her higher fees if she left early -
allowed Defendants to control the circumstances under which
Plaintiff was allowed to work. They are relevant to the
control analysis and weigh in favor of a finding that
Plaintiff was an employee of Defendants rather than an
independent contractor working for herself.
same factors also have been cited by other courts in finding
exotic dancers to be employees. Reich v. Circle C.
Investments, Inc., 998 F.2d 324, 328 (5th Cir. 1993)
(finding that instructing dancers to charge minimum prices
for dances indicated control); McFeeley v. Jackson St.
Entm't, LLC, 47 F.Supp.3d 260, 269 (D. Md. 2014)
(finding that setting the hours of operation for the club
indicated control); Thompson v. Linda And A.,
Inc., 779 F.Supp.2d 139, 148 (D.D.C. 2011) (finding that
having dancers pay a house fee to dance demonstrated
control); Reich v. Priba Corp., 890 F.Supp. 586, 592
(N.D. Tex. 1995) (finding that dictating the atmosphere of
the club demonstrated control).
argue that the control they exerted over Plaintiff was
insufficient to qualify her as an employee. Defendants point
to the disputes about whether she was required to tip DJs and
bartenders and whether she was required to perform on stage.
They also point to the fact that Plaintiff had no set hours
and requirements as to the number of shifts she had to work
each week. (Dkt. 88 at 16.) Regardless of these details, the
inquiry remains “whether a . . . dancer's freedom
to work when she wants and for whomever she wants reflects
economic independence, or whether these freedoms merely mask
the economic reality of dependence.” Harrell v.
Diamond A Entm't, Inc., 992 F.Supp. 1343, 1349 (M.D.
Fla. 1997). The fact that Defendants did not require
Plaintiff to work certain hours does not mean they did not
control the circumstances under which she worked. An
employee's “right to set hours [does not indicate]
such lack of control [by defendant] as would show these
operators are independent from it.” Usery, 527
F.2d at 1312.
also argue that the house fee did not operate as a
“carrot or a stick” that pressured dancers to
remain at the club. Instead, they claim that it was
“essentially a charge for renting floor space.”
(Dkt. 98 at ¶ 139.) They claim that the fees
“increase at certain times because the demand per
square foot increases with the number of entertainers willing
to compete for that space and [they] charge more during times
that entertainers are willing to pay more.”
(Id.) The notion that Plaintiff rented floor space
is absurd - Defendants' silly attempt to redefine reality
to avoid the consequences of their conduct. Neither Plaintiff
nor any dancer controlled any section, portion, or square
footage of the club. They walked throughout it, performing
wherever customers wanted them to dance. Defendants
introduced no document or evidence to suggest there was any
assessment of supply and demand, square footage, or space
used in setting the house fees.
house fees depended on two things - when dancers got to the
club and when entertainers left the club. (Dkt. 79 at
74:11-14, 81:15-20, 82:23-83:1.) They incentivized the
entertainers to be there during particular hours. Dancers who
chose to leave the club before 3:00 a.m. paid more money than
those that chose to leave after 3:00 a.m. (Dkt. 98 at ¶
48.) A supply and demand system would not penalize
entertainers for wanting less time to perform. Defendants
also argue that this payment arrangement benefited
entertainers as they could take a nap at the club or make
more money by continuing to perform. (Dkt. 97 at 11.)
Regardless of the potential advantages to entertainers for
staying at work longer, requiring dancers to pay more for
leaving early exerts control.
next argue that the breathalyzer requirement did not
establish control because the only consequence of failing the
test was having to take a cab home. (Dkt. 97 at 13.) The
Court rejects this argument. The breathalyzer requirement
placed a constraint on Plaintiff's ability to leave upon
her own initiative. It might also have increased public
safety (making it a good policy) but it exerted control over
Plaintiff's working conditions.
claim the club's managers did not routinely enforce
minimum price requirements for dances. As a result, they
claim the minimum prices requirement did not actually exert
any control over Plaintiff. (Dkt. 97 at 12.) Defendants set
this rule, and absent evidence that Plaintiff knew Defendants
did not enforce it (and no such evidence has been presented),
the rule controlled her behavior. The requirement of minimum
prices, enforced or not, controlled Plaintiff's work at
the club. See Vaughan, 2016 WL 7365201 at *7
(“However, simply because a manager may be kind, and
may decide not to strictly enforce every rule on every
occasion, does not change the fact that the manager is
exercising control over the subordinate.”).
next contend that that their control of the hours, employees,
and clientele had no impact on Plaintiff's earning
potential and thus did not constitute a form of control.
(Dkt. 97 at 9.) The Court rejects this argument.
“Defendants created and control the atmosphere and
surroundings at [the club], the existence of which dictates
the flow of customers into the club. An entertainer can be
considered an independent contractor only if she exerts such
a control over a meaningful part of the business that she
stands as a separate economic entity.” Reich,
890 F.Supp. at 592 (internal citations and quotations
omitted). And here, “the entertainer's economic
status is inextricably linked to those conditions over which
defendants have complete control.” (Id.)
Plaintiff had no control over when customers could enter the
building, which customers could enter, what cover charge they
paid, or the minimum fee for a dance. Defendants exercised
complete control over this important aspect of the business -
true that Defendants did not control some elements of
Plaintiff's work. (Dkt. 97 at 6.) Plaintiff, for example,
was not required to dance for customers while at the club,
but rather could spend her time drinking, playing games,
talking to customers, or even taking a nap. (Id.)
She also decided how to dress, whether to wear a wig, and how
to interact with customers. (Id.) “The mere
fact that [the club] has delegated a measure of discretion to
its dancers about how best to entertain its customers does
not necessarily mean that its dancers are elevated to the
status of independent contractors. Indeed, one could say that
the nature of [an entertainer's] job requires some
measure of discretion and flexibility.”
Harrell, 992 F.Supp. at 1349. Certainly, every
dancer has discretion in how she interacts with a customer.
This discretion, however, does not reflect economic
independence. Instead, it “merely mask[s] the economic
reality of dependence.” Id. Plaintiff was
dependent on Defendants' customers and Defendants
controlled most of the terms of her interaction with them,
including key terms like who she could entertain (only
customers The Follies admitted) and the prices she could
charge (no less than minimum charge The Follies set).
repeatedly argue that they exerted less control over
Plaintiff than other strip clubs exert over their dancers.
They argue, for example, that they did not fine Plaintiff if
she was late or wore something they did not like, impose
shift requirements, require Plaintiff to perform stage
dances, or impose a plethora of written rules. (Dkt. 87-1 at
¶¶ 42, 46, 130.) That may be true. But, no single
type of control is required to make someone an employee. Try
as they might, they did not, in fact, build the better
mousetrap. The undisputed facts of this case show that
Defendants exerted significant control over how Plaintiff
sold her services at the club.
Opportunity to Make a ...