Bonton v. Centerfold Entertainment Club, Inc. et al
Filing
72
OPINION AND ORDER as set forth. Signed by Honorable P. K. Holmes, III on August 9, 2017. (hnc)
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IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HOT SPRINGS DIVISION
DEANNA MILLER, individually and on
behalf of all others similarly situated
v.
PLAINTIFF
No. 6:14-CV-6074
CENTERFOLD ENTERTAINMENT CLUB, INC.;
and JESSIE ORRELL, individually and as officer
and/or director of Centerfold Entertainment Club
DEFENDANTS
OPINION AND ORDER
On July 17, 2017, the Court held a bench trial in this action and took the matter under
advisement. The Court heard testimony from Defendant Jessie Orrell, opt-in Plaintiff Michelle
Johnson, opt-in Plaintiff Kristina Garton, Plaintiff Deanna Miller (collectively, “Plaintiffs”), and
Diana Day. 1 Several exhibits were also received into evidence. After carefully considering the
evidence at trial and the legal arguments made, and based upon observation of the witnesses and
an opportunity to weigh their credibility, the Court now makes its findings of fact and conclusions
of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure. For the reasons set forth
below, the Court concludes that Plaintiffs were employees entitled to coverage under the Fair
Labor Standards Act (“FLSA”), that Defendants violated the FLSA by not paying Plaintiffs a
minimum wage, and that Plaintiffs are entitled to damages.
I.
Procedural History
This case was originally filed on June 4, 2014 by Tamatrica Bonton. The complaint alleged
that while Ms. Bonton and others performed as exotic dancers for Defendants, they were not paid
a minimum wage or overtime compensation in violation of the FLSA, 29 U.S.C. § 201, et. seq.,
1
Ms. Day’s deposition was taken under the name of Nichole Phillips, but she stated at trial
that she prefers to be referred to as Ms. Day.
1
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and the Arkansas Minimum Wage Act (“AMWA”), Ark. Code Ann. § 11-4-201, et. seq. Ms.
Miller filed notice of her consent to join on the next day. (Doc. 5). On October 9, 2014, the Court 2
granted conditional collective action certification of the FLSA class under 29 U.S.C. § 216(b) so
that notice could be disseminated to potential plaintiffs. (Doc. 12). An amended complaint was
then filed on November 20, 2014, adding Ms. Miller as a named Plaintiff with her own individual
claims under the FLSA and AMWA. (Doc. 17). On May 19, 2015, the Court granted Rule 23
class certification on the AMWA claim. (Doc. 37). On September 17, 2015, the Court granted
attorneys Josh Sanford and Josh West’s motion (Doc. 44) to withdraw as counsel for Ms. Bonton,
and the Court subsequently terminated Ms. Bonton’s individual claims and converted her to an
opt-in Plaintiff after it became apparent that she was no longer interested in pursuing her claims as
a class representative. (Doc. 57). Ms. Garton and Ms. Johnson filed notices of their consent to
join the collective action on December 15, 2015. (Docs. 51, 52). On December 28, 2015, the case
was reassigned to the undersigned. The Court sua sponte decertified the Rule 23 class action on
March 10, 2017 (Doc. 64). On July 17, 2017, a bench trial was held. The Court heard evidence
at trial for Ms. Miller, Ms. Garton, and Ms. Johnson. Because Plaintiffs’ counsel has withdrawn
from representing Ms. Bonton, and she did not appear at trial to pursue her claims, Ms. Bonton’s
claims will be dismissed without prejudice as to their refiling.
II.
Findings of Fact 3
Mr. Orrell is the owner and sole shareholder of Centerfold Entertainment Club, Inc. (the
“Club”). Defendants obtained and maintained a permit to operate the Club as a sexually-oriented
business. The Club is located in Hot Springs, Arkansas and provides adult entertainment in the
2
Hon. Robert T. Dawson.
Pursuant to Federal Rule of Civil Procedure 52(a), the Court finds the following facts to
be established by a preponderance of the evidence.
3
2
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form of exotic dancers. Defendants also hired managers, waitresses, and doormen. Ms. Miller,
Ms. Garton, and Ms. Johnson performed as exotic dancers at the Club. Ms. Miller performed at
the Club as an exotic dancer from June 2011 until November 2012, except for approximately two
months during her pregnancy. Ms. Garton performed at the Club as an exotic dancer from August
2011 until July 2014, when she was fired for dancing at a private party. Ms. Johnson performed
at the Club as an exotic dancer from 2006 until June 2014. She also worked at the Club as an
assistant manager for approximately four months during that period.
As part of their job at the Club, Plaintiffs would perform dances on stage pursuant to a
stage rotation, give personal dances to patrons called “lap dances,” and spend time with patrons
who purchased the dancer a “lady’s drink.” Defendants had a stage rotation policy of requiring
dancers to perform their stage dances for two songs. Defendants set a policy that lap dances would
cost $20 for one dance and $50 for three dances, and that ladies’ drinks would cost $20.
Defendants required the dancers to pay the disc jockey (“DJ”) ten percent of what the dancers
made during stage dances. For lap dances and ladies’ drinks, Defendants required the dancers to
evenly split proceeds with the Club. Dancers were not allowed to handle any money other than
their tips. Plaintiffs did not receive any wages or other form of compensation from the Club for
their work there.
When Plaintiffs performed stage dances, they would request certain songs from the DJ who
would play those songs through a computer if they were available. When the Club had Internet
connection, the DJ would play songs through YouTube. When Internet was unavailable, music
would be chosen by the DJ from a play list, potentially streamed via iTunes or through a computer
hard drive. Defendants did not allow dancers to select rap music for their stage dances.
Dancers were subject to numerous fines if they did not comply with policies set by
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Defendants. Dancers would be fined for arriving late or leaving a shift early. Dancers were
required to wear shoes on stage, although Mr. Orrell would make exceptions to this rule.
Defendants maintained a store at the Club from which dancers could purchase costumes or shoes,
though dancers could also purchase costumes elsewhere. While on stage, dancers were not allowed
to go over the stage. Dancers were not allowed to go outside in their costume. Dancers could not
leave the Club with a customer, and they were forbidden from dancing at other clubs or private
parties. The penalty for being caught outside with a customer was a $500 fine. The penalty for
dancing at another club or a private party was either termination or up to a $500 fine.
Decisions about the Club’s facilities, interior décor and design, budget, and policies, all
were made by Defendants. Some dancers advertised their services over social media, but
Defendants controlled all of the Club’s advertising, including maintaining the Club’s Facebook
page and online job announcements. Ms. Johnson would send text messages to regular customers
to let them know when she was working at the Club.
All of the Club’s managers were personally hired and supervised by Mr. Orrell. He also
maintained his own table at the Club. While he previously supervised at the Club four to six nights
a week, the frequency of his visits declined due to health concerns. As a result of his health
deteriorating, Mr. Orrell went to the Club approximately once every three weeks. Nevertheless,
Mr. Orrell installed live video surveillance at the Club so that he could supervise Club activities
while at home.
Dancers were required to work a minimum of four days a week unless they had another
job, in which case they were allowed to work a minimum of three days a week. The Club was
generally open Monday through Saturday every week. Despite their record-keeping obligations,
Defendants have no records as to the tenure, hours worked, or the amount of money in tips
4
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collected by Plaintiffs during their time at the Club.
III.
Discussion
A.
FLSA Coverage
The Court must first determine whether there is FLSA coverage in the instant matter. The
FLSA mandates that every employer pay each of his or her employees a minimum wage and
overtime compensation for any workweek that the employees are (1) “engaged in commerce 4 or
in the production of goods for commerce” (individual coverage) or (2) “employed in an enterprise
engaged in commerce or in the production of goods for commerce” (enterprise coverage). 29
U.S.C. §§ 206(a), 207(a). Plaintiffs do not contend that enterprise coverage exists, but claim that
individual coverage exists for each of them.
For individual coverage, “[t]he burden of proof lies on employees to establish that they
were engaged in interstate commerce, or in the production of goods, and that such production was
for interstate commerce.” Joseph v. Nichell’s Caribbean Cuisine, Inc., 862 F. Supp. 2d 1309, 1312
(S.D. Fla. 2012) (citations omitted). As evidence of individual coverage, Plaintiffs stated that they
performed dances for customers who visited from outside the state of Arkansas, danced on
furniture from outside the state, regularly handled beverages that came from outside the state,
danced to music that originated from out of state, and wore costumes and stilettos that came from
outside the state. The test “is not whether the employee’s activities affect or indirectly relate to
interstate commerce but whether they are actually in or so closely related to the movement of the
commerce as to be a part of it.” McLeod v. Threlkeld, 319 U.S. 491, 497 (1943). Plaintiffs’
proffered activities are not closely enough related to interstate commerce for purposes of individual
4
“‘Commerce’ means trade, commerce, transportation, transmission, or communication
among the several States or between any State and any place outside thereof.” 29 U.S.C. § 203(b).
5
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coverage. See McLeod, 319 U.S. 491 at 494 (“[H]andlers of goods for a wholesaler who moves
them interstate on order or to meet the needs of specified customers are in commerce, while those
employees who handle goods after acquisition by a merchant for general local disposition are
not.”); Joseph, 862 F. Supp. 2d at 1314 (“whether the customers Plaintiff served at Defendant’s
restaurant were local or from out-of-state is immaterial to establishing individual FLSA coverage).
Nevertheless, testimony elicited at trial confirms that individual coverage exists. Plaintiffs
were required to regularly use the Internet to perform their dances. Individual coverage exists for
dancers who “regularly use the instrumentalities of interstate commerce in [their] work.” Thorne
v. All Restoration Servs., 448 F.3d 1264, 1266 (11th Cir. 2006). Furthermore, “[i]t is well-settled
that ‘[t]he internet is an instrumentality of interstate commerce.’” Foster v. Gold & Silver Private
Club, Inc., 2015 WL 8489998, at *6 (W.D. Va. Dec. 9, 2015) (citing United States v. Hornaday,
392 F.3d 1306, 1311 (11th Cir. 2004); AvePoint Inc. v. Power Tools, Inc., 981 F. Supp. 2d 496,
512 (W.D. Va. 2013). When Plaintiffs performed stage dances, they would request songs from
the DJ who would often stream the music over the Internet via YouTube. 5 Whether on stage or
providing a private dance, dancers are hired by the Club to dance, and music is an indispensable
part of a dancer’s work. The music regularly streamed over the Internet while Plaintiffs performed
at the Club, and their use of an instrumentality of interstate commerce is sufficient for individual
coverage for each of the Plaintiffs in this action.
As an additional basis for individual coverage, Ms. Johnson regularly texted her clientele
to let them know when she would be performing at the Club. Individuals whose work involves
5
Ms. Day testified that the music was played from a hard drive. Having listened to her
testimony on the stand and observed her demeanor in the process, the Court determines Ms. Day’s
testimony lacks credibility. Earlier during trial, when asked whether Plaintiffs danced to music
that originated from outside of Arkansas, Mr. Orrell testified that the music “[c]omes over the
Internet.”
6
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the continued use of the interstate mails, telegraph, telephone or similar instrumentalities for
communication across state lines are covered by the FLSA. 29 C.F.R. § 776.10(b); Schmidt v.
Peoples Tel. Union of Maryville, Mo., 138 F.2d 13, 15 (8th Cir. 1943). Testimony at trial also
confirmed that some of the dancers advertised their services on social media. While it is not clear
whether Ms. Garton engaged in this activity, 6 Ms. Johnson also qualifies for individual coverage
based on her use of a telephone to advertise her work at the Club.
B.
Plaintiffs’ Employment Status
Having found that FLSA coverage exists, the Court next considers whether Plaintiffs were
employees of the Club. The FLSA defines an employee as “any individual employed by an
employer,” and states that “employ” includes “to suffer or permit to work.” 29 U.S.C. §
203(e)(1), (g). The Supreme Court has interpreted “employ” under the FLSA to be defined with
“striking breadth.” Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326 (1992); see also
Hodgson v. Taylor, 439 F.2d 288, 290 (8th Cir. 1971) (“The definition of employee under the Act
is very broad and comprehensive.”). The Eleventh Circuit has described the statute’s definition of
an employee as the “the broadest definition [of employee] that has ever been included in any one
act.” Antenor v. D & S Farms, 88 F.3d 925, 929 n.5 (11th Cir. 1996).
Courts typically employ the economic realities test to determine whether an individual is
an employee under the FLSA. See, e.g., Whitworth v. French Quarter Partners, LLC, 2014 WL
12594213, at *3 (W.D. Ark. June 30, 2014). “In determining whether an entity functions as an
individual’s employer, courts generally look to the economic reality of the arrangement.” Blair v.
Wills, 420 F.3d 823, 829 (8th Cir.2005) (citing Goldberg v. Whitaker, 366 U .S. 28, 33 (1961)
(“[T]he ‘economic reality’ rather than ‘technical concepts’ is to be the test of employment”)).
6
Ms. Miller stated that she did not personally advertise her services.
7
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Under this test, the Court looks “to the ‘economic reality’ of all of the circumstances concerning
whether
the
putative
employee
is
economically
dependent
upon
the
alleged
employer.” Whitworth, 2014 WL 12594213, at *3. Factors the Court will consider are: (i) the
degree of control exercised by the Club over the business operations, (ii) the relative investments
of the Club and dancers, (iii) the degree to which the dancers’ opportunity for profit and loss is
determined by the Club, (iv) the skill and initiative required by the dancers in performing the job,
(v) the permanency of the work relationship, and (vi) the extent to which the work performed by
the dancers is an integral part of the Club’s business. See, e.g., Harrell v. Diamond A Entm’t,
Inc., 992 F.Supp. 1343, 1348 (M.D. Fla. 1997); 51 A.L.R. Fed. 702, § 2.5 (collecting cases).
“[T]he final and determinative question must be whether the total of the testing establishes the
personnel are so dependent upon the business with which they are connected that they come within
the protection of the FLSA or are sufficiently independent to lie outside its ambit.” Usery v.
Pilgrim Equip. Co., 527 F.2d 1308, 1311-12 (5th Cir. 1976). If, after applying the six factors and
viewing them in their totality, Plaintiffs have “shown that there is no doubt as to the relationship
between the parties, the court may determine as a matter of law that the worker is an employee or
independent contractor.” McFeeley v. Jackson St. Entm’t, LLC, 47 F. Supp. 3d 260, 268 (D. Md.
2014), aff’d. 825 F.3d 235 (4th Cir. 2016) (citations omitted).
1.
Degree of Control
In examining the degree of control exercised by the Club, the key inquiry is whether the
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, 992 F. Supp. at 1349 (citing Reich v. Priba Corp., 890 F. Supp. 586, 592 (N.D. Tex.
1995)); see also Mednick v. Albert Enters., Inc., 508 F.2d 297, 303 (5th Cir. 1975) (“An employer
8
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cannot saddle a worker with the status of independent contractor, thereby relieving itself of its
duties under the FLSA, by granting [her] some legal powers where the economic reality is that the
worker is not and never has been independently in the business which the employer would have
[her] operate”). The Court looks “not only at the [C]lub’s rules and guidelines regarding the
dancers’ performances and behavior, but also to the [C]lub’s control over the atmosphere and
clientele”’ McFeeley, 47 F. Supp. 3d at 268 (internal quotation and citation omitted). “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.” Usery, 527 F.2d at
1312-13.
The Court finds that the Club exerted a significant amount of control over business
operations and that Plaintiffs were not separate economic entities. Plaintiffs had no authority to
hire, fire, discipline, order goods, enter into contracts, set prices, or create policies—the Club
retained this authority exclusively. Plaintiffs did not advertise for the Club, even though Ms.
Johnson advertised her personal services to certain clients. Mr. Orrell installed video surveillance
at the Club so that he could oversee Club activities even when he was not there. The Club required
Plaintiffs to work four nights a week unless they had another job, in which case they were required
to work three nights a week. The Club also required dancers to adhere to a stage rotation and
overall routine. The dancers were required to wear shoes unless granted an exception from
management, and the dancers were not allowed to handle money.
Additionally, the Club’s authority to discipline its dancers (especially over their dancing
elsewhere) is indicative of its control. The Club’s exertion of control over its dancers includes
“fining dancers for absences and tardiness; enforcing behavioral rules; setting minimum
performance fees; and requiring dancers to sign in upon arrival.” McFeeley, 47 F. Supp. 3d at 268
9
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(citations omitted). Here, the Club set the minimum fees for dances and drinks. The Club imposed
fines for dancers going over the stage, going outside with a customer, or for being late to a shift.
If they were caught dancing at another club or a private party, dancers would either be terminated
or face up to a $500 fine. The penalty for being caught outside with a customer was a $500 fine.
The penalty for dancing at another Club or a private party was either termination or up to a $500
fine. That Ms. Garton was fired for dancing at a private party is strong evidence of the Club’s
control over business operations. Due to the significant control exerted by the Club, the Court
finds this factor weighs heavily in favor of Plaintiffs’ being employees.
2.
The Relative Investments of the Parties
Mr. Orrell purchased the Club approximately 20 years ago for roughly $100,000, and he
remains its sole shareholder and owner. The Club also purchased and maintains a sexuallyoriented business permit. While the dancers are responsible for their own costumes and stilettos,
this does not compare to the amount expended by Defendants in operating the Club. Compared to
the considerable investments of the Club, Plaintiffs’ investments are relatively minor and
indicative of their employment. See Reich v. Circle C. Investments, Inc., 998 F.2d 324, 328 (5th
Cir. 1993) (finding that a dancer’s investments in costume and locks to pale in comparison to an
employer that “owns the liquor license, owns the inventory of beverages and refreshments, leases
fixtures for the nightclub (e.g., the stage and lights), owns sound equipment and music, maintains
and renovates the facilities, and advertises extensively.”). This factor weighs in favor of Plaintiffs’
being employees.
3.
The Dancers’ Opportunity for Profit and Loss
The Court finds that the Club is “structured in such a way that the dancers will never have
the same opportunity for profit as the owner of the business.” Whitworth, 2014 WL 12594213, at
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*5. This is because “Plaintiffs have no ownership interest in the club, and they bear no risk of
economic loss. The worst a dancer can do on any given night is to make no money if she receives
no tips or dance fees.” 7 Id. Furthermore, Defendants are responsible for the hours, location,
advertising, management, maintenance, and aesthetics of the Club. Because of their significant
role in bringing business into the Club, Defendants have a better opportunity for profit and loss.
Priba Corp., 890 F. Supp. at 593 (“[E]ntertainers do not control the key determinants of profit and
loss of a successful enterprise.”); Clincy v. Galardi S. Enters., Inc., 808 F. Supp. 2d 1326, 1346
(N.D. Ga. 2011) (“Defendants are primarily responsible for attracting customers to the Club, as
decisions about marketing and promotions for the Club, its location, its maintenance, aesthetics,
and atmosphere, and food and alcohol availability and pricing are made by Defendants and/or their
employees, not the entertainers.”). This factor also weighs in favor of Plaintiffs’ being employees.
4.
The Degree of Skill and Initiative Required by the Dancers
“Many other courts have previously found that little specialized skill is required to be a
nude dancer,” and this Court agrees. 8 Thompson v. Linda And A., Inc., 779 F. Supp. 2d 139, 149
(D.D.C. 2011) (citations omitted). Dancers at the Club received no training, and the Club rarely
turned down individuals who applied to be a dancer. As for initiative, the Court finds that a
“dancer’s initiative is essentially limited to decisions involving her costumes and dance routines.”
Circle C. Investments, Inc., 998 F.2d at 328. This factor weighs in favor of Plaintiffs’ being
employees.
5.
Permanency of the Working Relationship
“The more permanent the [working] relationship, the more likely it is that a court will find
7
Mr. Orrell confirmed at trial that the dancers do not share in the Club’s profit and loss.
While the Court has little doubt that some exotic dancers are quite skilled, Plaintiffs have
demonstrated that the Club required only minimal skill from its dancers.
8
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a worker to be an employee.” Thompson, 779 F. Supp. 2d at 150. While the exotic dancing
profession is generally regarded as being a rather transient one, Plaintiffs in this case worked for
the Club for extended periods of time. Defendants argue that because dancers were allowed to
also work elsewhere, the working relationship was impermanent. However, “[t]hat dancers were
free to work at other clubs or in other lines of work … [does] not distinguish them from countless
workers in other areas of endeavor who are undeniably employees … for example, waiters, ushers,
and bartenders.” Hart v. Rick’s Cabaret Int’l, Inc., 967 F. Supp. 2d 901, 921 (S.D.N.Y. 2013).
Stated another way, “[e]ven if the freedom to work for multiple employers may provide something
of a safety net, unless a worker possesses specialized and widely-demanded skills, that freedom is
hardly the same as true economic independence.” McLaughlin v. Seafood, Inc., 861 F.2d 450,
452-53 (5th Cir. 1988). As a result, courts tend to accord this factor limited weight. See Hart, 967
F. Supp. 2d at 921. Nevertheless, because each of the Plaintiffs worked the Club approximately
between one and eight years, and they were still required to work three nights a week when they
held other employment, the Court holds that this factor also weighs in favor of Plaintiffs’ being
employees.
6.
The Extent to Which the Work is an Integral Part of the Business
There would be no entertainment for the Centerfold Entertainment Club without the exotic
dancers. Id. ((“No reasonable jury could conclude that exotic dancers were not integral to the
success of a club that marketed itself as a club for exotic dancers.”). Just as with all of the other
factors, this factor also favors employment. The Court concludes that Plaintiffs were employees
of the Club for purposes of the FLSA.
C.
Mr. Orrell’s Employer Status
Because the Court has found Plaintiffs to be employees, it must next determine whether
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Defendants qualify as employers under the FLSA. Defendant Centerfold Entertainment Club, Inc.
is clearly an employer. The primary issue is whether Mr. Orrell is also an employer under the
FLSA. Employer is defined under the statute as “any person acting directly or indirectly in the
interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). “The Eighth Circuit has
held that a corporate officer with operational control of the corporation’s day-to-day functions is
an employer within the meaning of the FLSA.” Simms v. Northport Health Servs. of Ark., L.L.C.,
2013 WL 2102974 (W.D. Ark. May 14, 2013) (citing Wirtz v. Pure Ice Co., Inc., 322 F.2d 259,
262-63 (8th Cir. 1963)).
The Court finds that Mr. Orrell is an employer under the FLSA because he had operational
control of the Club’s day-to-day functions. Mr. Orrell owned a club called Bottoms Up prior to
purchasing Centerfold Entertainment Club approximately 20 years ago. He learned how to run
the Club from friends and his own experience. He remodeled the Club at his sole discretion and
was the sole decision maker for decorating, maintenance, and the layout of the Club. Mr. Orrell
had his own table at the Club. More recently, Mr. Orrell implemented an arm band policy at the
club. That Mr. Orrell had a security camera system installed at the Club so that he could oversee
Club activities from his home is evidence of his operational control. Mr. Orrell had sufficient
control over the Club that he was an employer for FLSA purposes.
D.
Statute of Limitations
Because Plaintiffs were employees of the Club and Defendants were their employers under
the FLSA, Defendants violated the FLSA by failing to pay Plaintiffs any wages or other form of
compensation for their work at the Club. In order to determine what is now owed to Plaintiffs, the
Court must first determine the applicable statute of limitations. An FLSA cause of action “may be
commenced within two years after the cause of action accrued … except that a cause of action
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arising out of a willful violation may be commenced within three years after the cause of action
accrued.” 29 U.S.C. § 255(a).
A “willful” violation is one where “the employer either knew or showed reckless disregard
for the matter of whether its conduct was prohibited by the statute.” Jarrett v. ERC Properties,
Inc., 211 F.3d 1078, 1082 (8th Cir. 2000) (quoting McLaughlin v. Richland Shoe Co., 486 U.S.
128, 133 (1988)). “Reckless disregard of the requirements of the [FLSA] means failure to make
adequate inquiry into whether conduct is in compliance with the Act.” 5 C.F.R. § 551.104. The
willfulness standard requires more than mere negligence or a “good-faith but incorrect assumption
that a pay plan complied with the FLSA.” Richland Shoe, 486 U.S. at 135. The employees bear
the burden of establishing willfulness. Fenton v. Farmers Ins. Exch., 663 F.Supp.2d 718, 728 (D.
Minn. 2009).
The Court finds that Defendants’ violation of the FLSA was willful. This decision is
informed by the Club’s failure to keep any records regarding Plaintiffs’ tenure at the Club, the
hours they worked during any given week, or the amount of money in tips the dancers received
while working. Additionally, Defendants never informed Plaintiffs of any of the provisions of
minimum wage laws. Having listened to Mr. Orrell’s testimony and observing his demeanor at
trial, the Court concludes that the Club’s purpose in failing to keep records and inform dancers of
the relevant wage laws was to willfully violate the FLSA. As a result, the limitations period for
each Plaintiff is three years.
Defense counsel argued at trial that this case was never properly commenced and Plaintiffs’
claims are barred by the statute of limitations because Ms. Miller only filed a consent to join form
(Doc. 5) before the filing of the amended complaint (Doc. 17) whereby she became a named
Plaintiff. Defendants contend that Ms. Miller—as the only remaining named Plaintiff—also
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needed to file a consent to join form after the filing of the amended complaint and within the
limitations period. Typically, the statute of limitations for each Plaintiff in an FLSA collective
action runs when he or she files written consent with the court effectively joining the lawsuit rather
than when the named Plaintiff files the complaint. 29 U.S.C. § 256(b). The section of the FLSA
relating to collective actions reiterates that “[n]o employee shall be a party plaintiff to any such
action unless he gives his consent in writing to become such a party and such consent is filed in
the court in which such action is brought.” § 216(b). Thus, it is clear that a suit does not commence
for limitations purposes until a consent is filed. Defendants are correct that this also applies to a
named Plaintiff. See Acosta v. Tyson Foods, Inc., 800 F.3d 468, 472 (8th Cir. 2015) (because the
complaint alleged an FLSA collective action, the named plaintiff “was required to file a written
consent to proceed as a party plaintiff,” and his failure to do so should have resulted in dismissal
of the FLSA claim); Gomez v. Tyson Foods, Inc., 799 F.3d 1192, 1194 (8th Cir. 2015) (same).
Here, though, both Ms. Miller’s original consent filed before the amended complaint and
her declaration filed right after the amended complaint are sufficient. First, that Ms. Miller filed
her consent while she was not a named Plaintiff and before the filing of the amended complaint
does not prevent her from meeting the requirements of § 256(b). See Aaron v. City of Wichita,
Kan., 1993 WL 93337, at *7 (D. Kan. Mar. 9, 1993) (“The date for recalculation for any plaintiff
who did not file a consent with the original complaint is the day his or her opt-in consent was filed
with the court.”) (emphasis added) (reversed on other grounds). Second, Ms. Miller’s signed
declaration filed in support of Plaintiffs’ first motion for Rule 23 class certification clearly sets
forth her status as a named Plaintiff in this case and describes the basis for her wage claim.
(Doc. 18-1). This declaration indicates Ms. Miller’s consent to proceed as a named Plaintiff in the
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FLSA collective action and also meets the requirements of § 256(b). 9
See, e.g., Butler v.
DirectSAT USA, LLC, 55 F. Supp. 3d 793, 800 (D. Md. 2014) (finding a declaration in support of
conditional certification sufficient to constitute written consent, in line with other courts that have
required “only that the signed document verify the complaint, indicate a desire to have legal action
taken to protect the party’s rights, or state a desire to become a party plaintiff”) (citing
cases); Callari v. Blackman Plumbing Supply, Inc., 988 F. Supp. 2d 261, 281–82 (E.D.N.Y. 2013)
(“[C]ourts have generally not taken a strict approach with regard to the form of the written consent,
at least with respect to named plaintiffs,” and a filed declaration in which “the Plaintiff clearly
identifies himself as the named Plaintiff in this action” is sufficient.) (citations omitted); Lee v.
Vance Exec. Prot., Inc., 7 F. App’x 160, 166-67 (4th Cir. 2001), 2001 WL 108760, at *6 (“The
purpose of the consent forms is ‘to make ... uncertain plaintiffs certain, and actual participants, so
that defendants could know the parties and the charges with which they were to be faced.”)
(quotation and citation omitted).
Ms. Miller filed notice of her consent to join on June 5, 2014. (Doc. 5). Ms. Garton and
Ms. Johnson filed notices of their consent to join the collective action on December 15, 2015.
(Docs. 51, 52). Under Federal Rule of Civil Procedure 15(c)(1)(B), an amended pleading “relates
back” to the date of the original pleading when the amendment asserts a claim or defense that
“arose out of the conduct, transaction, or occurrence set out ... in the original pleading.” Because
the amended complaint asserts individual FLSA and AMWA claims by Ms. Miller against the
Club, the amended pleading relates back as to her, for limitations purposes, to the date of her
original consent to join on June 5, 2014. For opt-in Plaintiffs Ms. Garton and Ms. Johnson,
9
The Court will use the earlier date, that of Ms. Miller’s notice of her consent to join
(Doc. 5), for calculating damages.
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their subsequently filed consents do not relate back because their FLSA actions commenced “on
the subsequent date on which [their] written consent [was] filed in the court.” § 256(b); see
also Lee v. Vance Exec. Prot., Inc., 7 Fed. App’x 160, 167 (4th Cir. 2001) (“In other
words, consents not filed with the complaint do not relate back.”).
E.
AMWA Coverage
Plaintiffs have also asserted claims under the AMWA based on the same conduct. Apart
from the AMWA’s more relaxed provisions related to coverage, “[t]he FLSA and the AMWA
impose similar minimum wage and overtime requirements on employers and, in cases involving
claims brought under both acts, the courts have concluded that their parallel provisions should be
interpreted in the same manner.” Carter v. Primary Home Care of Hot Springs, Inc., 2015 WL
11120563, at *2 (W.D. Ark. May 14, 2015). For the same reasons set forth above, the Court finds
that Plaintiffs are employees and Defendants are employers under the AMWA, and that
Defendants violated the AMWA by failing to pay Plaintiffs a minimum wage. However, there can
be no double recovery. Because the federal minimum wage was higher than the Arkansas
minimum wage for all periods relevant to this lawsuit, damages will be calculated based solely on
the federal minimum wage claims under the FLSA.
F.
Tip Credit
Defendants have not argued for a tip credit to reduce the damages awarded to each Plaintiff,
and the Court will not allow one. In order to qualify for a tip credit of up to fifty percent of the
minimum wage requirements, (1) the employer must inform the tipped employees of the provisions
of 29 U.S.C. § 203(m); and (2) tipped employees must retain all the tips they receive except those
tips included in a tipping pool among employees who customarily receive tips. See Priba Corp.,
890 F. Supp. at 595. Defendants bear the burden of proving they are entitled to the tip credit.
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Pedigo v. Austin Rumba, Inc., 722 F. Supp. 2d 714, 722 (W.D. Tex. 2010). Because that burden
has not been satisfied, there will not be a tip credit to the damages awarded.
G.
Damages
Plaintiffs will be awarded back wages for a temporal period extending three years
preceding the filing of their consents to join during which they were employed by the Club. During
this period, the federal minimum wage was $7.25 per hour. Plaintiffs are also entitled to liquidated
damages in an amount equal to the back pay awarded because the Club has not met its burden of
showing that it acted in good faith and had reasonable grounds for believing its actions were not
in violation of the FLSA. See 29 U.S.C. §§ 216 & 260; Braswell v. City of El Dorado, 187 F.3d
954, 957 (8th Cir. 1999) (An award of liquidated damages “is mandatory unless the employer can
show good faith and reasonable grounds for believing that it was not in violation of the FLSA.”).
Further, where, as here, “an employer has not kept adequate records of wages and hours,
its employees cannot be penalized by being denied a recovery of back wages on the ground that
the precise extent of their uncompensated work cannot be proved.” Dole v. Alamo Found., 915
F.2d 349, 351 (8th Cir. 1990). “Rather, the employees are to be awarded compensation on the
most accurate basis possible.” Id. (citing Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680,
687-88 (1946)). Plaintiffs bear the burden of proving the extent of back wages to which they are
entitled, but they may satisfy that burden by “just and reasonable inference.” Anderson, 328 U.S.
at 687-88. “The burden then shifts to the employer to come forward with evidence of the precise
amount of work performed or with evidence to negative the reasonableness of the inference to be
drawn from the employee’s evidence.” Id. Plaintiffs have adequately estimated the relevant time
periods in which they were employed by the Club and have given an average number of hours they
worked in a week during that period. However, Defendants have somewhat-successfully shown
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that these estimates are unreasonable, so the Court will award each Plaintiff the amounts listed
below.
1.
Deanna Miller
Ms. Miller testified that she estimates she was employed by the Club from June 5, 2011
until January 1, 2012, and again from March 1, 2012 until November 1, 2012. She claims to have
worked four days a week during her employment at the Club, at an average of 34 hours a week. 10
During this time, though, Ms. Miller also worked at Vision’s and Paper Moon, two other
entertainment clubs. She also worked at other clubs while on vacation or while traveling, which
Ms. Miller testified was not often. She would also miss work, but claims to have made up the
majority of missed time. Additionally, the Club would not open on rare occasions. Calling into
question Ms. Miller’s credibility, Defendants pointed out at trial that she previously fabricated a
medical letter that was presented in the Hot Springs District Court to avoid punishment while she
was on probation, and that she was also untruthful in her deposition about participating in other
lawsuits. Given Ms. Miller’s concurrent employment at two other entertainment clubs that would
presumably operate during the same hours, her unaccounted-for missed time, and valid questions
about her credibility, the Court determines that her estimation is unreasonable.
Ms. Miller was required to work at the Club three nights a week, but the Court does not
believe she worked any more than that given that she also worked at Vision’s and Paper Moon
during the same period, presumably those clubs operating during the same hours. As a result, the
Court will reduce her hours worked per week from the estimated 34 to 18, representing three days
10
The Court also heard testimony from Ms. Day on the issue of damages, and she testified
that the average number of hours worked by each Plaintiff in a given week was significantly less
than what Plaintiffs report. Ms. Day was not a credible witness, and her testimony on this matter
provides no assistance to the Court in determining the hours worked by each Plaintiff.
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a week of six hour shifts. The Court determines that the Club was likely open an average of six
hours a night during the relevant time periods. Additionally, the Court will reduce Ms. Miller’s
65 total weeks of employment to 60 weeks in order to account for missed time from work,
including travel and dates that the Club did not open. Ms. Miller’s 18 hours per week is multiplied
by the federal minimum wage of $7.25 for 60 total weeks of employment. Ms. Miller is entitled
to back wages in the amount of $7,830.00, plus an additional $7,830.00 in liquidated damages.
2.
Kristina Garton
Ms. Garton testified that she estimates she was employed by the Club from August 8, 2011
until July 3, 2014. However, because her consent to join was not filed until December 15, 2015,
the relevant period of employment for Ms. Garton is from December 15, 2012 until July 3, 2014.
She claims to have worked 48 hours a week during approximately the first eight months of this
period, which would entitle her to overtime compensation as well. From August 9, 2013 until July
3, 2014, Ms. Garton claims to have worked 40 hours a week. Thus, Ms. Garton claims to have
worked either five or six days a week for the entirety of her employment, and the Club was only
open six days a week. Within that period, though, there were rare occasions in which the Club
would not open, Ms. Garton would miss work on certain days, and she also cleaned houses during
this same time period. Calling into question Ms. Garton’s credibility, Defendants pointed out that
she receives public assistance in the form of ARKids First but also claims to have made roughly
$52,000 a year as an exotic dancer because of how much she worked. Because of the valid
questions about Ms. Garton’s credibility and her unaccounted-for missed time, the Court
determines that her estimation is unreasonable.
The Court finds that Ms. Garton likely worked at the Club four nights a week, with an
estimated six hour shift each night. As a result, the Court will reduce her hours worked per week
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and finds that a more reasonable estimation is 24 hours a week for the relevant time period.
Additionally, the Court will reduce her 80.7 total weeks of employment by four weeks, to account
for missed time from work, including time traveling and dates that the Club did not open. Ms.
Garton’s 24 hours per week is multiplied by $7.25 for 76.7 total weeks of employment. Ms. Garton
is entitled to back wages in the amount of $13,345.80, plus an additional $13,345.80 in liquidated
damages.
3.
Michelle Johnson
Ms. Johnson testified that she estimates she was employed by the Club from sometime in
2006 until July 31, 2014. However, because her consent to join was also not filed until December
15, 2015, the relevant period of employment for Ms. Miller is from December 15, 2012 until July
31, 2014. Ms. Johnson claims to have worked for the Club an average of 40 hours per week during
this time. Yet, Ms. Johnson worked numerous other jobs while she was employed at Centerfold.
She testified that she worked as many as two or three full-time jobs at one time. She would also
take a couple of weeks of vacation each year and missed days on occasion when she was sick.
Because of her other jobs—including full-time work—and missed time for vacation or sick days,
the Court finds that Ms. Johnson’s estimate is not reasonable. Thus, the Court will reduce her
hours worked per week and total weeks worked during the relevant time period.
The Court finds that Ms. Johnson likely worked at the Club four nights a week, with an
estimated six hour shift each night. This more accurately accounts for her numerous other jobs,
while still recognizing Ms. Johnson’s experience and value to the Club with her established
customer base. The Court will also reduce time from her estimated total weeks of employment to
account for vacation and sick days, but because the Court found her to be the most credible among
the Plaintiffs, the reduction will be three weeks from her estimated 84.7 weeks of employment.
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This 24 hours per week is multiplied by $7.25 for 81.7 weeks of employment, equaling back wages
in an amount of $14,215.80 plus an additional $14,215.80 in liquidated damages.
IV.
Conclusion
IT IS THEREFORE ORDERED that Plaintiffs qualify for coverage under the FLSA,
Plaintiffs were employees and Defendants were employers under the FLSA, and that Defendants
willfully violated the FLSA by not paying Plaintiffs a minimum wage for their employment.
IT IS FURTHER ORDERED that Plaintiffs qualify for coverage under the AMWA,
Plaintiffs were employees and Defendants were employers under the AMWA, and that Defendants
violated the AMWA when they failed to pay Plaintiffs a minimum wage for their employment.
However, no double recovery will be awarded, so Plaintiffs’ damages will be based solely on
violations of the FLSA for back wages plus liquidated damages.
IT IS FURTHER ORDERED that Defendants Centerfold Entertainment Club, Inc. and
Jessie Orrell are jointly and severally liable to Plaintiff Deanna Miller in the amount of $15,660.00;
to Plaintiff Kristina Garton in the amount of $26,691.60; and to Plaintiff Michelle Johnson in the
amount of $28,431.60.
IT IS FURTHER ORDERED that opt-in Plaintiff Tamatrica Bonton’s claims are
DISMISSED WITHOUT PREJUDICE to their refiling.
Plaintiffs are DIRECTED to file any motion for attorneys’ fees by August 18, 2017.
Defendants will thereafter have until August 28, 2017 to respond.
IT IS SO ORDERED this 9th day of August, 2017.
/s/P. K. Holmes, III
P.K. HOLMES, III
CHIEF U.S. DISTRICT JUDGE
22
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