Stevenson et al v. The Great American Dream, Inc. et al
OPINION and ORDER granting 53 Plaintiffs' Motion for Partial Summary Judgment. Signed by Judge Thomas W. Thrash, Jr. on 12/31/2013. (bdb)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
Individually and on behalf of others
similarly situated, et al.,
CIVIL ACTION FILE
THE GREAT AMERICAN DREAM,
INC. doing business as
Pinups, et al.,
OPINION AND ORDER
The Plaintiffs are dancers at Pin Ups Nightclub seeking damages for violation
of the minimum wage and overtime wage requirements of the Fair Labor Standards
Act, 29 U.S.C. § 201, et seq. (“FLSA”). It is before the Court on the Plaintiffs’
Motion for Partial Summary Judgment [Doc 53]. For the reasons set forth below, the
Plaintiffs’ Motion for Partial Summary Judgment is GRANTED.
The Plaintiffs are current and former adult entertainers at Pin Ups Nightclub,
run by the Defendant The Great American Dream, Inc. The Plaintiffs were
compensated exclusively through tips. (Pls.’ Statement of Facts ¶¶ 6-7.) They brought
suit alleging that--because they were “employees”--they were entitled to minimum
wage and overtime compensation under the FLSA. On December 17, 2012, they
moved for conditional certification of a collective action class [Doc. 15], which was
granted on August 14, 2013 [Doc. 50]. The class closed on December 13, 2013 [Doc.
52]. Now, the Plaintiffs move for partial summary judgment on one question: Were
the Plaintiffs "employees" under the FLSA? The Plaintiffs argue that they were. The
Defendants assert three responses. First, they argue that James W. Lee, Sr. was
erroneously included as a defendant. Second, they argue that additional discovery is
needed on new opt-in Plaintiffs. Third, they argue that the entertainers were properly
classified as independent contractors.
II. Summary Judgment Standard
Summary judgment is appropriate only when the pleadings, depositions, and
affidavits submitted by the parties show that no genuine issue of material fact exists
and that the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c).
The court should view the evidence and any inferences that may be drawn in the light
most favorable to the nonmovant. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59
(1970). The party seeking summary judgment must first identify grounds that show
the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317,
323-24 (1986). The burden then shifts to the nonmovant, who must go beyond the
pleadings and present affirmative evidence to show that a genuine issue of material
fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). "A mere
'scintilla' of evidence supporting the opposing party's position will not suffice; there
must be a sufficient showing that the jury could reasonably find for that party."
Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir.1990).
A party may move for summary judgment on a part of a claim or defense. FED.
R. CIV. P. 56(a). "A[n] . . . order granting partial summary judgment from which no
immediate appeal lies is merged into the final judgment and reviewable on appeal
from that final judgment. . . .An order granting [summary] judgment on certain issues
is a judgment on those issues. It forecloses further dispute on those issues at the trial
stage. An order denying a motion for partial summary judgment, on the other hand,
is merely a judge's determination that genuine issues of material fact exist. It is not a
judgment, and does not foreclose trial on the issues on which summary judgment was
sought." Lind v. United Parcel Serv., Inc., 254 F.3d 1281, 1284 n.4 (11th Cir. 2001)
(quoting Glaros v. H.H. Robertson Co., 797 F.2d 1564, 1573 (Fed. Cir. 1986)).
The Defendants’ first two arguments are easily disposed of. First, the Court
need not consider at this stage whether Lee is an appropriate defendant. That issue has
no bearing on the narrow question addressed by the motion for partial summary
judgment. In fact, this Court previously rejected a similar argument. See Clincy v.
Galardi South Enterprises, Inc., 808 F. Supp. 2d 1326, 1329 (N.D. Ga. 2011) (“The
parties disagree as to which Defendant(s) employs the entertainers if the entertainers
are found to be employees, but the resolution of that question is immaterial to the
determinations the Court needs to make in resolving the pending Motions for
Summary Judgment.”). Second, additional discovery is unnecessary to rule on this
motion. The Defendants argue that some of the opt-in Plaintiffs may have worked for
shorter intervals of time. (Defs.’ Resp. to Mot. for Summ. J., at 6.) However, the
determination of employee-status will not vary based on minor distinctions. An
entertainer who worked under identical circumstances as the other Plaintiffs will not
be classified differently simply because she worked for a shorter period of time. See
Reich v. Priba Corp., 890 F. Supp. 586, 591 (N.D. Tex. 1995) (Only 10 out of 1,200
entertainers actually performed at the club on a consistent basis, yet the court made
a single determination regarding whether they were all employees or independent
contractors.). The Defendants also argue that at least one Plaintiff signed an arbitration
agreement. (Defs.’ Resp. to Mot. for Summ. J., at 6.) But the Court is not making a
determination regarding who is entitled to relief. It is possible that a Plaintiff held to
be an “employee” may still be denied relief by this Court if the Defendants file a
motion to compel arbitration.
It is clear that the Plaintiffs were “employees” under the FLSA. "The FLSA's
overtime and minimum wage protections . . . extend only to 'employees.'" Scantland
v. Jeffry Knight, Inc., 721 F.3d 1308, 1311 (11th Cir. 2013). The FLSA defines
"employee" broadly.1 Id. "Independent contractors," however, do not fall within that
definition. Id. To determine whether a party was an employee or an independent
contractor, the Court looks to the "economic reality of the relationship between the
alleged employee and alleged employer." Id. (internal quotation marks omitted). The
inquiry focuses on the level of economic dependence. Id. at 1312. "[T]he final and
determinative question must be whether the . . . personnel are so dependent upon the
business with which they are connected that they come within the protection of FLSA
or are sufficiently independent to lie outside its ambit." Usery v. Pilgrim Equip. Co.,
Inc., 527 F.2d 1308, 1311-12 (5th Cir. 1976).2 "The concept has also been put in terms
The statutory definition of "employee" in the FLSA provides little guidance.
See Rutherford Food Corp. v. McComb, 331 U.S. 722, 728 (1947) (“[T]here is in the
Fair Labor Standards Act no definition that solves problems as to the limits of the
employer-employee relationship under the Act.”). "Employee" is defined as "any
individual employed by an employer." 29 U.S.C. § 203(e)(1). "To employ" is defined
as "to suffer or permit to work." 29 U.S.C. § 203(g).
Decisions of the former Fifth Circuit handed down before the close of business
on September 30, 1981 are binding precedent on Eleventh Circuit courts. See Bonner
v. City of Prichard, 661 F.2d 1206, 1208-09 (11th Cir. 1981).
of whether the individual is 'in business for [her]self.'" Mednick v. Albert Enterprises,
Inc., 508 F.2d 297, 302 (5th Cir. 1975).
The Court may consider various factors, such as (1) degree of control, (2)
opportunity for profit or loss, (3) investment in equipment or additional personnel
required, (4) skill requires, (5) duration, and (6) the extent to which the service is
integral to the alleged employer's business. See Scantland, 721 F.3d at 1312. "[T]hese
six factors are not exclusive and no single factor is dominant." Id. The Court must
assess the facts relevant to these factors "through the lens of 'economic dependence'
and whether they are more analogous to the 'usual path' of an employee or an
independent contractor." Id.
This standard is not susceptible to a simple application. See Usery, 527 F.2d at
1311 ("The test is not one which allows for a simple resolution of close cases.").
When a disposition in either direction can be justified, the Court must err in favor of
a broader reading of "employee."3 Id. ("Given the remedial purposes of the legislation,
The case Mednick v. Albert Enterprises, Inc., 508 F.2d 297 (5th Cir. 1975)
demonstrates just how broadly the term “employee” is construed. There, the plaintiff
oversaw cardrooms in an apartment complex. Id. at 298. In addition to renting out the
rooms, he sold candy, card decks, soft drinks, and cigarettes. Id. He financed the
inventory himself. Id. He identified himself as "self-employed" on his tax forms. Id.
at 299. The defendant did not set his hours, and did not even require him to be present.
Id. Even more, the plaintiff hired and fired his own employees, albeit with input from
the defendant's apartment manager. Id. The plaintiff received no orders regarding how
he was to perform his cardroom services. Id. He was also permitted to hold other jobs.
an expansive definition of 'employee' has been adopted . . . a constricted interpretation
of the phrasing by the courts would not comport with its purpose."). To conclude that
a party is an "independent contractor" because she bears some of its characteristics
would "invite adroit schemes by some employers and employees to avoid the
immediate burdens at the expense of the benefits sought by the legislation." Id.; see
also Mednick, 508 F.2d at 303 ("An employer cannot saddle a worker with the status
of independent contractor, thereby relieving itself of its duties under the F.L.S.A. 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
Whether the Plaintiffs are "employees" under the FLSA is a question of law for
the Court. See Antenor v. D & S Farms, 88 F.3d 925, 929 (11th Cir. 1996) ("A
determination of employment status under the FLSA . . . is a question of law . . ..");
Patel v. Wargo, 803 F.2d 632, 634 n.1 (11th Cir. 1986) ("The weight of authority in
other circuits supports our characterization of the question as one of law, with the
subsidiary findings being issues of fact."). The Defendants frequently reiterate that the
facts must be viewed in the light most favorable to the Defendants. However, there is
Id. at 301. The court still concluded that the plaintiff was an "employee." The court
noted that the defendant provided the facility and equipment, controlled who could
use the cardrooms, and was responsible for advertisements. Id. at 299-301.
little dispute regarding the underlying facts of the Plaintiffs' employment arrangement
with the Defendants.4
To begin, this is not a matter of first impression for this Court. In Clincy v.
Galardi South Enterprises, Inc., 808 F. Supp. 2d 1326 (N.D. Ga. 2011), this Court
found that adult entertainers--working under conditions similar to the Plaintiffs in this
action--were "employees" protected by the FLSA. Many other courts have reached the
same conclusion. See Reich v. Circle C. Investments, Inc., 998 F.2d 324 (5th Cir.
1993); Reich v. Priba Corp., 890 F. Supp. 586 (N.D. Tex. 1995); Harrell v. Diamond
A Entertainment, Inc., 992 F. Supp. 1343 (M.D. Fla. 1997); Morse v. Mer Corp.,
1:08-CV-1389-WTL-JMS, 2010 WL 2346334 (S.D. Ind. June 4, 2010); Hart v. Rick's
Cabaret Intern., Inc., No. 09 Civ. 3043, 2013 WL 4822199 (S.D.N.Y. Sept. 10, 2013).
Here, five out of the six factors support finding “employee” status. First, Pin
Ups exercised a significant amount of control over the Plaintiffs. The Plaintiffs were
issued a document titled “General Policies and Procedures.” (Pls.’ Statement of Facts
The only three genuine points of dispute are (1) whether tip outs were
mandatory, (2) whether there was a minimum amount for dances performed in the VIP
room, and (3) whether attendance at Sunday meetings was mandatory. Given all of the
other factors, construing these three issues in the light most favorable to the
Defendants would not produce a different result.
¶ 59.) These rules laid out standards for appropriate dress5 and how the entertainers
were to conduct themselves on stage.6 (Id., Ex. 4.) They also stipulated that the DJ
would ultimately select the music that the entertainers would perform to. (Id.) These
rules applied not only to how the Plaintiffs conducted themselves on the main stage,
but also to how they conducted themselves in the VIP room. (Id.) Further, these rules
were enforced. Violations could result in dismissal. (Id. ¶¶ 16-17.) The “house moms”
made sure that the Plaintiffs complied with the appearance standards. (Id. ¶ 23.) If
there was a dispute regarding proper dress, the manager would make the final call. (Id.
43.) In addition to these regulations, the Plaintiffs were required to pay several fees.
Upon arriving for a shift, they had to pay a house fee. (Id. ¶¶ 31-32.) They also paid
fees that went to the house mom and the DJ. (Id. ¶¶ 22, 24.) Moreover, Pin Ups was
responsible for settling disputes arising within the club. For example, disputes
concerning the entertainer tip pool were resolved by the house mom and the manager.
“Nails must be manicured and polished. Makeup should be professionally
applied and hair should be styled.” (Pls.’ Statement of Facts, Ex. 4.) “All costumes
must have side releases or break-away clasps. There is to be no stepping out of
outfits.” (Id.) “When you are not on the main stage, you should be wearing the
following: 1.) bra/top, 2.) t-back/thong, 3.) cover/wrap, and 4.) high-heel shoes/boots
with heels. You should never be on the floor without a cover/wrap.” (Id.)
“Never dance in a lewd fashion or in a way that stimulates any type of sex
act.” (Pls.’ Statement of Facts, Ex. 4.) “Do not leave the stage until the next performer
comes on.” (Id.) “Do not eat, drink, or chew gum while on stage.” (Id.) “Work the
entire stage.” (Id.) “Do not make contact with customers while dancing. (Id.)
(Id. ¶ 49.) Pin Ups also handled disputes between the Plaintiffs and the customers. (Id.
¶ 18.) The Defendants argue that the entertainers could set their own schedules. But
this was true in several cases where courts found that the entertainers were nonetheless
employees. See, e.g., Priba Corp., 890 F. Supp. at 591; Harrell, 992 F. Supp. at 1348.
Control over scheduling is minimal compared to all of the elements of the job that Pin
Ups controlled. See Usery, 527 F.2d at 1312 ("Each operator is given the right to set
her own hours . . . [i]n 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. . . .[c]ontrol is only significant when it shows an
individual . . . stands as a separate economic entity."). Here, "the entertainer's
economic status is inextricably linked to those conditions over which defendants have
complete control." Priba Corp., 890 F. Supp. at 592.
Second, the Plaintiffs and Pin Ups did not share equally in the opportunities for
profit and loss. Although the Plaintiffs risked a loss equal to the fees they paid-assuming they made nothing in tips--“the risk of loss [was] much greater for the
Club.” Clincy v. Galardi South Enterprises, Inc., 808 F. Supp. 2d 1326, 1346 (N.D.
Ga. 2011). It bore the vast majority of overhead costs. Pin Ups also had more of an
impact on potential profits. It was “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” Pin Ups. Id. The Defendants argue that the entertainers could earn more
profit based on their interactions with the customers. (Defs.’ Resp. to Mot. for Summ.
J., at 17-18.) This argument was rejected in Clincy. See Clincy, 808 F. Supp. 2d at
1345-46. The Plaintiffs’ control over profits was minor compared to Pin Ups’. "[B]ut
for defendants' provision of the lavish work environment, the entertainers at the club
likely would earn nothing." Priba Corp., 890 F. Supp. at 593.
Third, Pin Ups invested far more than the Plaintiffs on necessary personnel and
equipment. It provided bartenders, waitresses, cashiers, security staff, and disc
jockeys. (Pls.’ Statement of Facts ¶¶ 12-13, 70.) Pin Ups also provided the facility, the
stages, and the poles. (Id. ¶ 71.) As other courts have noted, the amount spent on
clothing, hair styling, and make-up “is minor when compared to the club’s
investment.” Harrell, 992 F. Supp. at 1350; see also Reich, 998 F.2d at 328 (“A
dancer’s investment in costumes and a padlock is relatively minor to the considerable
investment Circle C has in operating a nightclub.”). Many employees in many
different fields are also financially responsible for maintaining an appearance suitable
to their respective work environments.
Fourth, little skill is required. Pin Ups does not require that its entertainers
undergo formal training. (Id. ¶ 73.) The Defendants argue that the entertainers get
better as they gain experience. Although different entertainers may possess varying
degrees of skill, there is no indication that a high degree of skill or experience is
necessary. Taking your clothes off on a nightclub stage and dancing provocatively
are not the kinds of special skills that suggest independent contractor status. See Priba
Corp., 890 F. Supp. at 593 (“The scope of her initiative is restricted to decisions
involving what clothes to wear or how provocatively to dance. Such limited initiative
is more consistent with the status of an employee than an independent contractor.”).
Fifth, and most definitively, the Plaintiffs’ services were an integral part of Pin
Ups’ business. Pin Ups is an adult entertainment club and so it needs adult
entertainers. Kelly Campbell, the general manager of Pin Ups, acknowledged this.
(Campbell Dep. at 20.) (“Because we are an entertainment facility and we could not
be such without an entertainer.”). Pin Ups’ General Policies and Procedures issued to
the entertainers states: “Your job as an entertainer is the most important one in our
organization.” (Pls.’ Statement of Facts, Ex. 4.)
Only the duration factor supports the Defendants’ position. There is no
indication that all of the Plaintiffs worked at Pin Ups for an extended period of time,
and all of the Plaintiffs were permitted to work as entertainers at other clubs.
However, “[t]hat dancers were free to work at other clubs or in other lines of work,
and that they were not permanent employees, do not distinguish them from countless
workers in other areas of endeavor who are undeniably employees under the FLSA-for example, waiters, ushers, and bartenders.” Hart, 2013 WL 4822199, at *14. In
light of the other factors, this alone cannot nudge the Plaintiffs out of the protective
sphere of the FLSA.7 See Reich, 998 F.2d at 328-29 (“The transient nature of the work
force is not enough here to remove the dancers from the protections of the FLSA. In
analyzing the . . . factors, we must not lose sight of economic reality.”).
For these reasons, the Court GRANTS the Plaintiffs’ Motion for Partial
Summary Judgment [Doc. 53].
SO ORDERED, this 31 day of December, 2013.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
The Defendants also argue that the Plaintiffs previously believed they were
independent contractors and that this factors into the analysis. (Defs.’ Resp. to Mot.
for Summ. J., at 22.) However, the Plaintiffs’ subjective belief is not a relevant
consideration. See Usery, 527 F.2d at 1315 (“We reject . . . the uncontradicted
testimony that the operators believed they were, in fact, in business for themselves as
controlling FLSA employee status . . . subjective intent [does not] mandate the
outcome in these cases.”).
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