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Cooper v. Parker Promotions, Inc.

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

February 14, 2019

ROBERT F. COOPER, AMALIZZ MATHEWS, WHITNEY DOWDELL, LAKIESHA GOODINE, and KIRA SYKES, Plaintiffs,
v.
PARKER PROMOTIONS, INC., d/b/a Club Fetish, and NICHOLAS PARKER, Defendants.

          ORDER

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

         Defendants operate an adult establishment called Club Fetish. Plaintiffs worked at the club. They filed this action pursuant to the Fair Labor Standards Act, 29 U.S.C. §§ 201-219 (“FLSA”), seeking to recover unpaid minimum and overtime wages from Defendants for the years 2014 to 2017. Presently pending before the Court are the parties' motions for summary judgment. For the reasons set forth below, these motions (ECF Nos. 49 & 50) are granted in part and denied in part.

         SUMMARY JUDGMENT STANDARD

         Summary judgment may be granted only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In determining whether a genuine dispute of material fact exists to defeat a motion for summary judgment, the evidence is viewed in the light most favorable to the party opposing summary judgment, drawing all justifiable inferences in the opposing party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A fact is material if it is relevant or necessary to the outcome of the suit. Id. at 248. A factual dispute is genuine if the evidence would allow a reasonable jury to return a verdict for the nonmoving party. Id.

         DISCUSSION

         Preliminarily, the Court notes that the parties agree on the following three issues: (1) that Plaintiffs who were dancers were not exempt “creative professionals” under the FLSA (assuming that Plaintiffs were covered employees); (2) that Defendants are not entitled to any setoff of unpaid wage liability; and (3) that Defendants are entitled to summary judgment on Plaintiff Goodine's overtime claim. Accordingly, summary judgment is granted in favor of Plaintiffs on issues (1) and (2) and in favor of Defendants on issue (3). The Court addresses the motions for summary judgment regarding the other issues in the remainder of this Order.

         The FLSA requires that an “employee” who is “engaged in commerce” or “is employed in an enterprise engaged in commerce” must be paid by her “employer” a minimum hourly wage and a wage of one-and-a-half times her regular rate for each hour that she works in excess of forty hours per week. 29 U.S.C. §§ 206(a), 207(a)(1).

         To recover unpaid wages under the FLSA, an individual must prove that she is an “employee” who “is covered by the Act” and that her “employer” did not pay the required wages. Collar v. Abalux, Inc., 895 F.3d 1278, 1281 (11th Cir. 2018). The statute of limitations for non-willful FLSA violations is two years, and the statute of limitations for willful FLSA violations is three years. 29 U.S.C. § 255(a). Even if an employer violates the FLSA by failing to pay covered employers required minimum and overtime wages, the employer may reduce its liability by establishing a “good faith” affirmative defense. See 29 U.S.C. § 260.

         Defendants argue that Plaintiffs were not covered by the FLSA for 2014, 2015, and 2016-meaning Plaintiffs were not “engaged in commerce” or “employed in an enterprise engaged in commerce”-and Defendants seek summary judgment on this basis. In addition, all parties seek summary judgment on the following two issues: (1) whether Plaintiffs were “employees” under the FLSA (and not independent contractors); and (2) whether Nicholas Parker, as the owner of Parker Promotions, Inc., was Plaintiffs' “employer” within the meaning of the FLSA. Defendants alone seek summary judgment on Plaintiffs' claim that the alleged FLSA violations were willful. And Plaintiffs alone seek summary judgment on Defendants' good faith affirmative defense.

         I. Were Plaintiffs Covered by the FLSA for 2014 to 2016?

         To be covered by the FLSA, an employee must be “engaged in commerce” or “employed in an enterprise engaged in commerce.” 29 U.S.C. §§ 206(a), 207(a)(1). Thus, the FLSA “provides two types of coverage: individual and enterprise.” Collar, 895 F.3d at 1281. Plaintiffs Dowdell, Goodine, Mathews, and Sykes worked as dancers (“Dancer Plaintiffs”). They rely on both individual and enterprise coverage. Plaintiff Cooper, who worked as a security guard, relies only on enterprise coverage. Defendants do not dispute that there is at least a genuine fact dispute as to whether enterprise coverage existed for 2017. But Defendants seek summary judgment on this issue for 2014, 2015, and 2016, arguing that there was no enterprise coverage for those years. As discussed below, viewing the evidence in the light most favorable to Plaintiffs, the non-moving parties on this issue, genuine fact disputes exist on whether there was enterprise coverage for all the relevant years (2014 to 2017). The Court finds it unnecessary to address whether individual coverage also existed.

         Enterprise coverage requires proof that Parker Promotions “has employees who, among other things, are ‘engaged in commerce' as well as proof that [Parker Promotions] ‘is an enterprise whose annual gross volume of sales made or business done is not less than $500, 000 (exclusive of excise taxes at the retail level that are separately stated).'” Collar, 895 F.3d at 1281 (quoting 29 U.S.C. § 203(s)(1)(A)). Defendants do not dispute that some of Club Fetish's employees engaged in commerce by serving alcohol. Defendants, however, assert that the club's annual gross sales did not exceed $500, 000 for 2014, 2015, and 2016.

         “Annual gross sales ‘consist[] of [the] gross receipts from all types of sales made and business done during a 12-month period.'” Id. (alterations in original) (quoting 29 C.F.R. § 779.259(a)). “To determine the amount of annual gross sales, the employer is required to use the same annual accounting method, based on either a calendar year or a fiscal year.” Id. In this case, Defendants' bookkeeper calculated annual gross sales for Club Fetish based on a calendar year. Defendants' bookkeeper calculated that the annual revenue for Parker Promotions in 2014 was $302, 557.00, and that is the amount of gross sales or receipts reported to the Internal Revenue Service (“IRS”). Parker Dep. Pl.'s Ex. 49, 2014 Form 1120S, ECF No. 49-12 at 2. Defendants' bookkeeper calculated that the annual revenue for Parker Promotions in 2015 was $268, 577.00, and that is the amount of gross sales or receipts reported to the IRS. Id., 2015 Form 1120S, ECF No. 49-12 at 13. Defendants' bookkeeper calculated that the annual revenue for Parker Promotions in 2016 was $214, 263.00, and that is the amount of gross sales or receipts reported to the IRS. Id., 2016 Form 1120S, ECF No. 49-12 at 21.

         Plaintiffs pointed to evidence that these revenues are based on beverage sales but do not include door entry fees for the club. Hanson Dep. vol. 2, 84:10-22, ECF No. 49-10. The club used “nightly sheets” to keep track of revenue from its cash registers and door fees. Using the nightly sheets that Defendants provided for 2016 and 2017, Plaintiffs calculated that the club's revenue from these sources was $421, 584.00 in 2016 and ...


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