BURRELL v. TOPPERS INTERNATIONAL INC et al
ORDER granting 80 Motion for Reconsideration re the Court's oral ruling on 63 MOTION for Partial Summary Judgment filed by CHRISTIE BURRELL to the extent set forth in the Order. Ordered by US DISTRICT JUDGE CLAY D LAND on 04/18/2017. (CCL)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
CHRISTIE BURRELL, individually
and on behalf of all others
TOPPERS INTERNATIONAL, INC.,
DARNELL LEWIS GARDNER, and
CASE NO. 3:15-CV-125 (CDL)
O R D E R
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.
Plaintiffs Are Employees, Not Independent Contractors
Plaintiffs are entertainers at the club, and they contend
contractors and did not pay them minimum wage as required by the
Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219.
undisputed that Toppers does not pay any wages to entertainers,
and it does not include entertainers in payroll.
Ex. A, Material Undisputed Facts ¶ 7, ECF No. 79-1.
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.
“To determine whether an individual falls into the category
between the alleged employee and alleged employer and whether
that relationship demonstrates dependence.”
Scantland v. Jeffry
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.
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
entertainers’ work was performed.
Toppers set the entertainers’
schedules and would not permit entertainers to work busy shifts
Facts ¶¶ 38-41.
Entertainers were fined if they arrived late,
left early, missed a shift, or missed a stage call.
Id. ¶¶ 42-
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
danced on the main stage, and required entertainers to share
tips with other entertainers who shared the main stage with
Id. ¶¶ 5, 56-57, 59.
apparel, hair, and nails.
Toppers had rules on entertainers’
Id. ¶¶ 51-52.
Toppers also had
¶¶ 66, 68-69.
Based on all of these
undisputed facts, Toppers exercised significant control over the
finding that the entertainers are employees.
Opportunity for Profit or Loss
The second factor is “the alleged employee’s opportunity
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
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.
therefore its employees.
Investment in Equipment
The third factor is “the alleged employee’s investment in
equipment or materials required for his task, or his employment
entertainers are responsible only for their own makeup, hair,
entertainers to do their work, including the facility, stage,
marketing, bar, and security.
This factor weighs in favor of
Toppers and are therefore its employees.
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.
willingness to disrobe.
Material Undisputed Facts ¶¶ 78-
This factor weighs in favor of finding
that the entertainers are employees.
Permanency and Duration of the Relationship
The fifth factor is “the degree of permanency and duration
of the working relationship.” Scantland, 721 F.3d at 1312.
finding that the worker is an employee.
Here, there is evidence
that many entertainers worked at Toppers for at least a year.
Material Undisputed Facts ¶ 83.
The present record does not
entertainers had a contract with Topers for a specific term.
The Court finds that this factor is neutral.
Integral Part of Business
business.” Scantland, 721 F.3d at 1312.
Toppers agrees that
entertainers are integral to the operation of Toppers; without
the entertainers, Toppers cannot operate its business as a strip
Material Undisputed Facts ¶¶ 86, 88.
This factor weighs
in favor of finding that entertainers are employees.
As discussed above, the undisputed facts and the Scantland
factors weigh in favor of finding that the entertainers were
economically dependent on Toppers.
They were not “in business
employment in the business of others.”
Scantland, 721 F.3d at
1312 (quoting Mednick v. Albert Enters., Inc., 508 F.2d 297,
301–02 (5th Cir.1975)).
For these reasons, the Court concludes
that, as a matter of law, Plaintiffs were employees within the
meaning of the FLSA.
Defendants are Not Entitled to an “Offset” Defense
Plaintiffs argue that to the extent that Defendants are
defense, they are not entitled to it.
evidence to create a genuine fact dispute on this issue.
minimum wage obligations with “service charges" that become part
of the employer’s gross receipts and are distributed by the
employer to its employees.
29 C.F.R. § 531.55(b).
On the other
hand, tips do not count toward the offset defense.1
Here, it is
undisputed that the entertainers at Toppers rely solely on tips
Undisputed Facts ¶ 8.
The tips go directly to the entertainers,
receipts; no one at Toppers tracks how much entertainers receive
Id. ¶¶ 93, 96.
For these reasons, the tips received
by Toppers entertainers do not qualify as “service charges” that
judgment motion on this issue is therefore granted.
III. Remaining Issues
Plaintiffs also sought summary judgment on two additional
issues: (1) whether Darnell Lewis Gardner and Sandra Gardner are
In general, tips cannot be counted toward an employer’s minimum wage
requirements unless the employer meets the requirements for a tip
credit under 29 U.S.C. § 203(m).
Those requirements are: (1) the
employer must pay a “tipped employee” a cash wage and (2) if the cash
wage plus tips are not enough to meet the minimum wage, the employer
must pay an additional amount to meet the minimum wage. Id. Neither
requirement is met here.
genuine fact disputes exist on both of these questions, the
Court declines to reconsider its prior ruling on these issues.2
As discussed above, Plaintiffs’ motion for reconsideration
(ECF No. 80) is granted to the extent set forth in this Order.
Based on the undisputed evidence, Plaintiffs are entitled to
summary judgment on their claim that entertainers at Toppers are
entitled to summary judgment on Defendants’ offset defense.
genuine fact disputes preclude summary judgment on the remaining
IT IS SO ORDERED, this 18th day of April, 2017.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA
The Court further notes that Darnell Gardner has filed a Chapter 13
Thus, the case is automatically stayed as to
him, and the Court cannot rule on these issues as to Darnell Gardner
at this time.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?