Hurst v. Youngelson

Filing 110

OPINION AND ORDER. The Court GRANTS Plaintiff's Motion for Partial Summary Judgment 86 and DENIES Defendants' Motion for Summary Judgment 87 . Signed by Judge Michael L. Brown on 1/28/2019. (bgt)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
Brezzy Hurst,
Plaintiff,

Case No. 1:15-cv-03560
Michael L. Brown
United States District Judge

v.
Steven Youngelson, et al.,
Defendants.
________________________________/

OPINION AND ORDER
Plaintiff 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.1 Defendants and Plaintiff filed opposing motions for summary

WBY, Inc. is the corporation that does business as The Follies.
Defendants White and Youngelson both own fifty percent of WBY. Dkt.
77 at 12:25-13:1; Dkt. 78 at 8:1-3.

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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).
I.

Legal Standard
Summary 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).

2

The 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.
The 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 247–48.
II.

Factual Background
The 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

3

entertainer at The Follies from around November 2010 through April
2014.2 (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; 866.) Plaintiff filed this lawsuit to recover unpaid wages.
III. Discussion
A.

Employee or Independent Contractor

The 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

Defendants claim that time at which Plaintiff worked at The Follies
before October 7, 2012 is immaterial. Dkt. 98 at ¶ 5.
2

4

Enterprises, Inc., 508 F.2d 297, 300 (5th Cir. 1975).3 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. 1:12cv-3359, 2013 WL 6880921, at *2 (N.D. Ga. Dec. 31, 2013).
The 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

The Eleventh Circuit, in the en banc decision Bonner v. City of Prichard,
661 F.2d 1206, 1209 (11th Cir. 1981), adopted as precedent decisions of
the former Fifth Circuit rendered prior to October 1, 1981.

3

5

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.
In 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

6

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 “employee”.
Recently, 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).4 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 Court is aware of district court cases from outside the Eleventh
Circuit finding adult entertainers not to be employees. See Hilborn v.
Prime Time Club, Inc., 2012 WL 9187581 (E.D. Ark. July 12, 2012);
Matson v. 7455, Inc., 2000 WL 1132110 (D. Or. Jan. 14, 2000). These
opinions involve scant analysis of the “economic realities” test. The court
in Hilborn dedicated just one paragraph to the assessment. The court in
Matson considered a written agreement the employer required the
employee to sign stating she was an independent contractor to be “the
most telling indicator of her status.” Matson, 2000 WL 1132110 at *4.
The Eleventh Circuit’s precedent expressly states that self-imposed
labels are not controlling. The Court rejects the legal reasoning of these
two cases.
4

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1.

The Nature and Degree of Control

The 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.

8

Regardless 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.
Defendants 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; 771.) 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.

9

Most of Plaintiff’s income came from table dances that she
performed for club patrons. (Dkt. 84 at 206:23–24.)5 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.)

Plaintiff could also earn money by dancing for patrons in the VIP room,
going on stage to dance, and having conversations with customers. (Id.
at 109:13–19; 206:19–22.) But, again, most of her money came from table
dances.
5

10

And, 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.)
Plaintiff 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

11

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.)
Defendants 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.6 Likewise, a

Defendants also submitted a declaration from another former dancer,
Zoe Mae Herbst, in support of various assertions, including their claim

6

12

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 ¶ 49.)
It is 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

that tipping bartenders, DJs, and house moms was not mandatory.
Plaintiff objected to that declaration as barred by an earlier ruling from
the Court. Plaintiff is correct. In the final weeks of discovery, Defendants
provided Plaintiff declarations from fifteen former dancers at The Follies,
claiming they might be witnesses in this case. The Court ruled that
Defendants’ late disclosure violated Federal Rule of Civil Procedure 26
and that, pursuant to Rule 37(c)(1), Defendants could not rely on
declarations from those witnesses in opposing summary judgment. (Dkt.
82.) Ms. Herbst was not on that list. Defendants did not disclose her as
a potential witness until months later when it opposed Plaintiff’s motion
for summary judgment. The reasoning and result set forth in the Court’s
previous order applies to the failure to disclose Ms. Herbst during
discovery. Indeed, it would make little sense to bar Defendants’ reliance
on witnesses disclosed at the very end of discovery only to allow reliance
on witnesses disclosed even later. The Court will not consider Ms.
Herbst’s declaration. Even if the Court did consider her declaration, the
facts she offered are largely duplicative of information provided by other
witnesses, particularly Abigail Dunahoo. Ms. Herbst’s declaration —
even if considered — would not raise an issue of material fact so as to
defeat Plaintiff’s motion for summary judgment.

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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.)
All of 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.
These 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

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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).
Defendants 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.

15

Defendants 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.
The 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.)7

They incentivized the entertainers to be there during

Throughout this matter, Defendants have refused to call Plaintiff a
“dancer,” insisting that she be referred to as an “entertainer.” They

7

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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.
Defendants 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

apparently believe this label somehow distinguished her from the exotic
dancers in the other cases cited herein and makes her an independent
contractor. (Dkt. 77 at 26:8–21.) Of course, the economic realities test
exists because a putative employer’s labels are not controlling (or even
persuasive). The Court recognizes little difference between the two labels
given the realities of the services Plaintiff provided Defendants’ business.
They dance and they entertain Defendants’ customers. The Court,
therefore, uses the terms interchangeably.
17

increased public safety (making it a good policy) but it exerted control
over Plaintiff’s working conditions.
Defendants 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.”).
Defendants 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

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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 — the customers.
It is 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

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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).
Defendants 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.

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2.

Opportunity to Make a Profit/Make a Loss

The second factor is the putative employee’s opportunity for profit
or loss depending on her managerial skill. Working as an entertainer at
The Follies, Plaintiff could profit by selling dances to customers or having
them pay her for conversation. That is how she made her money. (Dkts.
97 at 12; 98 at ¶ 44.) Defendants argue that Plaintiff’s profits depended
on her initiative — that is, they claim she earned more if she hustled
more and less if she hustled less. She controlled how she looked, how she
danced, and how she interacted with her customers. The more pleasing
she was, the more she made. They also note that Plaintiff admitted that,
even when the club provided a steady stream of customers, there was no
guarantee the customers would pay her to dance. (Id.) Some nights she
did better than others. Some nights she changed costumes or a wig to
make herself more appealing to customers. Sometimes it worked and
sometimes it did not. Defendants characterize this as her “managerial
skills” under the economic reality test. (Dkt. 97 at 14.)
Certainly, Plaintiff had the ability to earn more tips if she was more
appealing to customers. That fact does not distinguish her from a waiter,
a bartender, or many other service industry workers typically considered

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employees.

Moreover, Defendants controlled the club’s customers,

drawing customers to the club or not. They controlled the location, hours
of operation, facilities, music, beverages and food, and number of
entertainers. (Dkt. 77 at 21:14–22, 38:9–11; Dkt. 79 at 20:4, 26:10–13,
27:5–10, 73:5–8, 74:1–5; Dkt. 84 at 44:14–22; Dkt. 86-6 at ¶¶ 23–26, 31–
33, 58–59.) No matter what she did, she could not earn money in the club
unless Defendants provided customers.

And as explained above,

Defendants set a minimum price at which Plaintiff could sell her services.
Defendants’ decision to control a key metric — price — further lessened
Plaintiff’s control over profits and loss. Defendants exerted even more
control by deciding not to allow women in the club unless accompanied
by a man.
The undisputed facts show that Defendants controlled all aspects
of the club’s operation and thus were primarily in control of Plaintiff’s
opportunity to make a profit. See Vaughn, 2016 WL 7365201 at *8
(holding that club exercised greater control over opportunity for profit
because it controlled advertisements, location, business hours, facilities,
and food and drink); Reich, 890 F. Supp. at 593 (“[b]ut for defendant’s
provision of the lavish work environment, the entertainers at the club

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would likely earn nothing”). The Court follows a long list of other courts
holding that a dancer’s ability to “hustle” does not provide him or her a
greater control over profit or loss. Hanson, 167 F. Supp. 3d at 1331
(noting that “[t]his argument — that dancers can ‘hustle’ to increase their
profits — has been almost universally rejected”) (collecting cases).
It is also worth noting that Plaintiff risked far less than
Defendants. Her risks consisted of the house fees and the expenses
related to make-up, hair, and outfits. (Dkt. 98 at ¶¶ 34, 47.) In contrast,
Defendants risked losing the investment of the club’s overhead expenses
including rent, maintenance, security, insurance premiums, and
employee salaries, which totaled over $840,000 a year. (Id. at ¶¶ 28–33.)
Another court in this district framed this comparison as “[a] dancer risks
nothing more than a minor fee, and the club ‘would have us believe that
a dancer . . . could hang out her own shingle, pay nothing in overhead —
no advertising, no facilities, no bouncers — and draw in a constant
stream of paying customers.’ ”

Vaughan, 2016 WL 7365201, at *8

(quoting Harrell, 992 F. Supp. at 1352). That is not the economic reality
of the situation here. As the Fifth Circuit noted, in rejecting the same
arguments, dancers “are far more closely akin to wage earners toiling for

23

a living, than to independent entrepreneurs seeking a return on their
risky capital investments.” Reich, 998 F.2d at 327.
The

second

factor

points

towards

an

employee-employer

relationship.
3.

Relative Investment

The third factor is the alleged employee’s investment in equipment
or materials required for his task, or his employment of workers.
Plaintiff invested in the outfits that she wore for entertaining, the upkeep
of her hair, and makeup. (Dkt. 98 at ¶¶ 34, 149–152.) This may have
cost her “a couple of thousand dollars” a year. (Id.) Defendants claim her
expenses were higher — maybe $10,000 a year. (Id.) They get that
calculation by always using the high-end of rough estimates Plaintiff
provided about the items she bought and the amount she paid for them.
(Id.) But, even accepting that exaggeration, the difference is immaterial.
Defendants paid more than $10,000 a month in rent. (Dkt. 86-7 at
8.) They also invested in materials for the building, which included
televisions, a music system, a stage, VIP rooms, and the adult
entertainment permit. (Dkt. 86-6 at ¶ 19.) They paid liability insurance,
building reports, and maintenance, utilities, security, and payroll for

24

managers, bar, and kitchen staff, floor men, and others. (Dkt. 98 at ¶¶
28–33; Dkt. 86-7 at 8–9.) It is undisputed that these expenses totaled
more than $840,000 in 2016. (Id.) Defendants concede they would have
been the same each year. (Id.)
Defendants argue that the correct analysis is not whether they
spent more on the business than Plaintiff, but whether “Defendants’
investment into Plaintiff’s business was ‘material.’ ” (Dkt. 97 at 18.)
Defendants cite Harrell for this proposition.

That opinion does not

support Defendants’ argument. To the contrary, the court in Harrell used
the term “material” to describe the club’s investment in advertising,
facilities, and maintenance — the same investments Defendants concede
they made in this case but try to exclude from the analysis. Harrell, 992
F. Supp. at 1350.
Defendants seek to minimize the $10,000 investment they made
each month in rent by arguing that the Court should only consider rent
applicable to “entertainer-specific areas” — that is, the stage, the
dressing room, and the area where the house mom works. Defendants
claim this area amounts to only 491 square feet of the entire building, or
$734.00 of the $10,000 in monthly rent. Of course, these areas are part

25

of the overall premises and Defendants cite no authority to suggest the
Court should artificially apportion the venue for assessment of each
parties’ investment in equipment and materials. In addition, dancers are
not limited to these areas as it is undisputed that they have free run of
the entire space. Private table dances and VIP room dances do not occur
in these areas. Indeed, dancers are not even required to dance on the
stage. And, as explained above, Defendants argue that Plaintiff and
other dancers were not required to entertain customers by dancing but
could talk with them, play games with them, or have a drink with them.
The point is that the entire building (except perhaps the kitchen and the
patrons’ bathrooms) was available for dancers to work. There is no basis
for apportioning the rent as Defendants suggest.
Similarly, Defendants argue that other expenses related to the
operation of the club — like liability insurance, building repair and
maintenance, utilities, and payroll — should not be considered because
they were only material for the operation as a bar. (Dkt. 97 at 20.) Not
true. The dancers had access to nearly the entire building and were
integral to the business’s operation. All expenses related to the operation
of the building were part of Defendants’ investment.

26

Comparing the club’s expenses to Plaintiff’s expenses, the Court
finds — again as nearly every other court has found — that the third
factor points towards an employee-employer relationship. See e.g., Reich,
998 F.2d at 328 (“A dancer's investment in costumes and a padlock is
relatively minor to the considerable investment [the club’s owner] has in
operating a nightclub” and the nightclub’s investment is “obvious.”);
Harrell 992 F. Supp. at 1350 (“The courts which have addressed this
factor have universally concluded that a dancer’s investment is minor
when compared to the club’s investment.”); Hanson, 167 F. Supp. 3d at
1332 (finding dancer’s investment in clothing, makeup and costumes
minuscule when compared to defendant’s investment in adult club).
4.

Special Skill

The fourth factor is whether the service rendered requires a special
skill. Other courts have found that adult entertainers’ dancing requires
no special skill. Clincy, Inc., 808 F. Supp. 2d at 1348; Hanson, 167 F.
Supp. 3d at 1332. Defendants do not challenge this finding. (Dkt. 97 at
22.) Courts have also found that an entertainer’s ability to manage her
career requires no special skill. Hanson, 167 F. Supp. 3d at 1331 (“On
the business side, to the extent that sort of skill is relevant in this

27

analysis, little business skills, judgment, or initiative is required to dance
at a gentlemen’s club that is established and managed by someone else.”).
The Court finds that the skills entertainers need at The Follies are
analogous to entertainers at other clubs. That is, it requires no special
skill.

The fourth factor weighs in favor of an employee-employer

relationship.
5.

Permanency and Duration of the Relationship

The fifth factor is the degree of permanency and duration of the
working relationship.

Permanence or a longer duration suggest an

employment relationship. Courts have considered the consistency of the
work, whether the job was the primary source of employment, and the
duration of the relationship. (Id. at 1332.) Relationships with a club that
extend over one year can signify permanence. Clincy, 808 F. Supp. 2d at
1348.
Plaintiff argues that the permanence factor weighs in her favor.
She worked at The Follies from around November 2010 until April 2014.
(Dkt. 86-6 at ¶ 5.) While records were not available throughout the entire
time, records from her last six and a half months at the club show that
she worked ninety-eight shifts during that time, averaging nearly 3.5

28

shifts per week. (Id. at ¶ 7.) Defendants respond that this is not an
impressive amount and that Plaintiff also worked at other clubs during
this time. They claim her concurrent performance at other clubs shows
a lack of economic dependence on them. (Dkt. 97 at 22.) Defendants’
argument fails on both accounts.

Working at other clubs does not

diminish Plaintiff’s relationship with The Follies.

Many people are

employed at two jobs. McFeeley, 47 F. Supp. 3d at 272 (“The fact that
dancers can work at other clubs [does] not distinguish them from
countless workers . . . who are undeniably employees under the FLSA —
for example, waiters, ushers, and bartenders — that may simultaneously
work for other businesses.”) (internal quotations omitted). And Plaintiff’s
varied schedule does not diminish her permanence at the club. Ninetyeight shifts over a six-month period requires consistent presence at the
club.
Courts have noted that “nude entertainers tend to be transient or
itinerant.” Clincy, 808 F. Supp. 2d at 1348. As a result, “courts have
found that the duration/lack of permanence factor is entitled to only
modest weight in assessing employee status under the FLSA.” Hanson,
167 F. Supp at 1332 (internal quotations omitted). As Plaintiff performed

29

at the club for an extended period of time and performed regularly during
a six-month period of time, the permanence factor, though given
comparatively less weight, still weighs in favor of finding an employeeemployer relationship.
6.

Integral Part of Alleged Employer’s Business

The sixth factor is the extent to which the service rendered is an
integral part of the alleged employer’s business. Defendants argue that
entertainers are not integral to the business of The Follies because the
club “is not a traditional strip club with a traditional strip club business
model.” (Dkt. 97 at 23.) Instead, The Follies provides “a variety of
entertainment options packaged in a friendly, neighborhood dive bar
environment.” (Id.) Defendants acknowledge that other defendants have
made similar arguments in similar cases, and that courts have
consistently rejected those arguments. (Id. at 23.)
Defendants argue that the test about whether the presence of
entertainers are integral to the business is “whether [The] Follies needs
entertainers.” (Id. at 24.) Defendants offer no citation for this conception
of “integral,” and, notably, the recent cases that have addressed this issue
have looked at whether the business would not exist without the presence

30

of nude entertainment. Other clubs with adult entertainment have made
similar arguments, but courts have rejected these arguments as absurd.
See Clincy, 808 F. Supp. 2d at 1348 (rejecting the argument that
entertainers were not integral to a club because the entertainers were
“not it’s [sic] essential function”). “Exotic dancers are obviously essential
to the success of a topless nightclub.” Vaughan, 2016 WL 7365201, at
*10 (quoting Harrell, 992 F. Supp. at 1352).
Whether The Follies would or would not exist without nude dancers
is a purely theoretical question. That it has had nude dancing for twentyfive consecutive years — its entire existence — is an empirical fact. (Dkt.
98 at ¶ 60.) The sign outside the club includes its logo, the word “Follies”
below a pair of legs wearing underwear and high heels:

31

(Id. at ¶ 62.)8 One of the owners designed the club so that the club’s two
stages would be visible “from the bar area and all four corners of the
room.” (Id. at ¶¶ 20-21.)9 In other words, the owner wanted to make sure
the dancers could be seen from everywhere in the building. On Monday,
Tuesday, and Wednesday nights, The Follies had between 60 and 80
dancers, and on Thursday, Friday, and Sunday nights, it had between
100 and 120 dancers. (Dkt. 79 at 22:5–22.) The day shifts had similar
numbers. (Id.) “Based upon the record as a whole, a reasonable juror
could not find that the presence of nude entertainment is not integral to
the Club.” Clincy, 808 F. Supp. 2d at 1349. The sixth factor weighs in
favor of an employer-employee relationship.
7.

Weighing the Factors

The Court finds that every factor points towards an employeeemployer relationship, and thus that Defendants misclassified Plaintiff

Defendants argue that the legs on this sign could also be interpreted to
be wearing a garter belt. (Dkt. 98 at ¶ 2.) The Court is unsure that this
alleged distinction makes a difference.
9 Defendants argue that the club layout tracked a previous use of the
space. When questioned, however, if the club was “designed so that you
could see the stages from everywhere,” Defendant White responded,
“[f]rom the bar area and all four corners of the room, yes.” (Dkt. 78, 35:5–
9.)
8

32

as an independent contractor. Perhaps Defendants are correct and they
had less control over Plaintiff than other strip clubs had over their
dancers, but Defendants still maintained significant control over Plaintiff
and her ability to make money. Furthermore, when considered together,
the conditions under which Plaintiff performed show that Plaintiff
depended economically on Defendants. This economic dependence — as
well as the other facts discussed above — leads the Court to conclude that
Plaintiff was an employee entitled to protections of the FLSA.
B.

Defendants White and Youngelson as “Employers”

In addition to suing WBY, Inc., Plaintiff sued Defendants White
and Youngelson individually.

The individual Defendants moved for

summary judgment arguing that they did not employ Plaintiff.
Defendants White and Youngelson cannot be held liable for
violating the FLSA’s unless they are “employers” within the meaning of
the act. Alvarez Perez v. Sanford–Orlando Kennel Club, Inc., 515 F.3d
1150, 1159 (11th Cir. 2008) (citing 29 U.S.C. § 207(a)(1)). The FLSA
defines “employer” as “any person acting directly or indirectly in the
interest of an employer in relation to an employee.” 29 U.S.C. § 203(d).

33

To determine whether an individual is an employer under the
FLSA, the court must consider the facts of the case “in light of the
‘economic reality’ of the relationship between the parties.” Villarreal v.
Woodham, 113 F.3d 202, 205 (11th Cir.1997) (quoting Goldberg v.
Whitaker House Co-op., Inc., 366 U.S. 28, 33 (1961)). “To be personally
liable, an officer must either be involved in the day-to-day operation or
have some direct responsibility for the supervision of the employee.” Id.
at 638 (emphasis added).

Whether an individual falls within the

definition of an employer “does not depend on technical or isolated factors
but rather on the circumstances of the whole activity.” Alvarez Perez, 515
F.3d at 1160 (internal quotations omitted).
The Eleventh Circuit has also recognized that “the overwhelming
weight of authority is that a corporate officer with operational control of
a corporation’s covered enterprise is an employer along with the
corporation, jointly and severally liable under the FLSA for unpaid
wages.” Patel, 803 F.2d at 637–38 (internal quotations omitted). There
can be several simultaneous employers of any individual worker. Falk v.
Brennan, 414 U.S. 190, 195 (1973).

And “if an individual with

managerial responsibilities is found to be an employer under the FLSA,

34

that individual can be found joint and severally liable for violations of
that Act.” Stout v. Smolar, No. 1:05-cv-1202, 2007 WL 2765519, at *5
(N.D. Ga. Sept. 18, 2007).
An analysis of the guidance set forth by the Eleventh Circuit
demonstrates that Defendants White and Youngelson were employers
along with WBY, Inc. First, and most importantly, Defendants White
and Youngelson decided not to classify Plaintiff as an employee and pay
her a wage.

Instead, they decided WBY, Inc. would treat her (and

presumably all other dancers) as an independent contractor — the
decision that violated the FLSA.

(Dkt. 86-5 at ¶¶ 9–10.)

That the

individual defendants controlled the club’s decision to misclassify
Plaintiff provides significant reason to consider them employers. See
Stuart v. Resurgens Risk Mgmt., Inc., No. 1:11-cv-04251, 2013 WL
2903571, at *12 (N.D. Ga. June 12, 2013) (“[E]mployer status under the
FLSA is most strongly demonstrated where the individual has control
over the policies or conduct that allegedly violates the FLSA.”).
The individual defendants also admit that they set up The Follies
when it opened twenty-five years ago and operated it before stepping
away in more recent years. The undisputed evidence shows that they

35

were sufficiently involved in the business and its day-to-day operations
to be considered Plaintiff’s employer. Defendants White and Youngelson
selected the manager of the club. (Dkt. 78 at 9:10–12.) By their own
admissions, they also maintained “active oversight.” (Id. at 31:5-9; 78-3
at 4; 79 at 68:20-25; 79-9 at 4.)10 In a 2015 disclosure to the Bankruptcy
Court, Defendant White disclosed that both Defendants White and
Youngelson “continue in active oversight of the operations, financial
matters, legal affairs[,] and the general business of [The] Follies.” (Id.)
This statement is supported by their behavior.

Defendant

Youngelson receives nightly text messages from the manager regarding
club revenue. (Dkt. 77 at 37:21–38:8.)11 Defendant White goes to the
club twice a week to make sure that the club is in a satisfactory condition.
(Dkt. 78 at 21:5–10.) These visits can include conversations with The

Defendants dispute this point, saying that “the testimony cited by
Plaintiff simply acknowledges that the quoted verbiage can be found in
WBY’s Disclosure statement filed with the Bankruptcy Court.” (Dkt. 98
at ¶ 80.) It is unclear why the Court would not consider quoted testimony
from a disclosure statement on Defendants’ roles within the club.
Furthermore, the facts underlying this statement are supported by the
facts within the case.
11 Defendants argue that this statement is “immaterial insofar as it
establishes the extent of Youngelson’s control or involvement in Follies’
day-to-day operations.” (Dkt. 98 at ¶ 69.) The Court disagrees.
10

36

Follies’ managers in which they discuss “what they’re doing right, doing
wrong, and what can be improved.” (Id. at 24:21–24.) Furthermore,
Defendant “White is responsible for selecting and supervising
management of daily operation and for providing operational insight and
direction on major policy decisions for [WBY].” (Id. at 31:20–24.) These
Defendants’ presence and oversight show that they continued to be
involved in the day-to-day operation of the club. The level of control they
exerted over the business supports the finding that both individual
Defendants were employers as defined under the act. See Donovan v.
Grim Hotel Co., 747 F.2d 966, 971 (5th Cir. 1984) (finding that the owner
of a chain of hotels was an employer because he personally selected the
manager of every hotel, solved the hotels’ major problems, and the hotels,
“speaking pragmatically, were [defendant’s] and functioned for the profit
of his family”).
Defendants’ ownership interests also support this conclusion. See
Shultz v. Mack Farland & Sons Roofing Co., 413 F.2d 1296, 1299–1300
(5th Cir. 1969) (finding that despite putting the company “under the
immediate management of various supervisors during the three or four
years preceding the trial,” the defendant still “retained ultimate control

37

over their operations because his ownership interest did not diminish at
all, he still maintained an office, and he exercised supervisory authority
on the hiring and firing of supervisory personnel); Dole v. Simpson, 784
F. Supp. 538, 545 (S.D. Ind. 1991). White and Youngelson each own 50%
of WBY, and, as stated above, continue to have significant influence over
the day-to-day operation of the club. (Dkt. 98 at ¶¶ 67, 79.)
White and Youngelson each have two children on The Follies
payroll. All four have squishy responsibilities. Defendant Youngelson,
for example, explained that his son and daughter work there. When
asked what their roles were, he responded “Whatever I want it to be.”
(Dkt. 79 at 39:12–14.) He then explained:
They do whatever I ask them to. They’re my — They’re my
eyes and ears and [Defendant White’s] kids are his — are our
eyes and ears. They check what — the boys will come in like
different times and report to us who’s working, who’s not.
Brett does a little work in the valet, they do maintenance, they
— they explain — the girls explain music to me. Whatever
they want, I mean, go do this, okay, that’s it.
(Dkt. 79 at 39:16–23.) When asked who gave them the jobs, he stated
“[Defendant White] and I. It’s our business. I’ll pay anybody I want.”
(Id. at 40:1–3.) Defendant White also testified that he hired his children,
saying that they are salaried employees involved in maintenance. (Dkt.

38

77 at 8:6–16.)

Defendant White and Youngelson argue that their

children’s involvement is irrelevant. The Court disagrees. The fact that
they can place four children on the company’s payroll to be their “eyes
and ears” shows a continued level of control over the company as well as
their desire to maintain control over its day-to-day operations.
The Court notes that some factors found relevant in similar cases
are not firmly established here. Youngelson and White were not involved
in the recruitment of entertainers. De Leon-Granados v. Eller & Sons
Trees, Inc., 581 F. Supp. 2d 1295, 1303 (N.D. Ga 2008), the sales or
marketing of the business, Coppage v. Bradshaw, 665 F. Supp. 2d 1361,
1364 (N.D. Ga. 2009), and did not give specific instructions to employees.
Reich, 998 F.2d at 329.12 Plaintiff did not think of either Youngelson or
Hurst as her boss. See De Leon-Granados, 581 F. Supp. 2d at 1305.13
Even so, these factors are not prerequisites to finding White and

Plaintiff disputes this fact, pointing to White’s testimony in which he
said he would give instructions as he saw fit. (Dkt. 78 at 21:5–10.)
13 Defendants’ citation to the Santos case is also unavailing. In Santos v.
Cuba Tropical, Inc., 829 F. Supp. 2d 1304, 1306 (S.D. Fla. 2011), the
plaintiffs could only show that the owner hired the managers and could
potentially exert control because of his ownership stake. Id. at 1312. In
this case, the evidence shows Youngelson and White, in fact, continue to
exercise significant control over The Follies.
12

39

Youngelson employers.

This test “does not depend on technical or

isolated factors but rather on the circumstances of the whole activity.”
Perez, 515 F.3d at 1159.
Defendants make several more arguments. Defendants argue that,
because the club has an operations manager, they were not involved in
day-to-day operations. (Dkt. 95 at 4.) “While this evidence may indicate
that [the manager] exercise[d] some authority over the Club, it fails to
create an issue of fact with regard to whether [the club owners] also
exercise[d] authority over the day-to-day operations of the Club and
supervise[d] the entertainers.” Henderson v. 1400 Northside Drive, Inc.,
No. 1:13-cv-3767, 2016 WL 3125012, at *3 (N.D. Ga. June 3, 2016).
Defendants White and Youngelson argue that, although they had
the authority to exercise more operational control, they did not do so, thus
preventing them from being considered employers. Patel, 803 F.2d at
638; (Dkt. 88 at 10.) Defendants’ decision not to control every aspect of
the club’s operations does not preclude them from being found to be
employers.
Defendants White and Youngelson argue that, although they set
the cover charge, decided not to admit female customers who were not

40

accompanied by a man, determined the hours of operation, and set the
minimum charges for dances, they did all of this when the club first
opened. They claim, therefore, that these facts cannot be considered
when assessing their supervisory role during Plaintiff’s employment.
(Dkt. 100 at 2.) They cite Alvarez Perez in support of their contention.
But, in that case, the evidence showed that — while the defendant
established policies when the company began — he later had a heart
attack, stopped coming to the facility more than once a year, and turned
operations over to his son. Alvarez Perez, 515 F.3d at 1161. In contrast,
Youngelson and White have maintained an active presence at the club.
Their continued presence at the club, along with the continued binding
nature of these policies, show continued control over the day-to-day
operation of the club.
C.

Unopposed Motions for Summary Judgment

Plaintiff’s motion for summary judgment raises three issues that
Defendants do not oppose. These issues are whether WBY qualifies for
enterprise coverage, whether Plaintiff qualifies for the creative
professional exception to the FLSA’s minimum wage requirement, and
whether WBY can offset its minimum wage obligations.

41

In unopposed motions for summary judgment, “the district court
cannot base the entry of summary judgment on the mere fact that the
motion was unopposed, but, rather, must consider the merits of the
motion.” United States v. One Piece of Real Prop. Located at 5800 SW
74th Ave., Miami, Fla., 363 F.3d 1099, 1101 (11th Cir. 2004). The court
need not review all the evidentiary materials sua sponte, but the court
must make sure that the order is supported at least by the evidentiary
materials submitted in support of the order. Id.
1.

Enterprise Coverage

If an employer qualifies for either individual or enterprise coverage,
then the employer assumes minimum wage requirements under the
FLSA. 29 U.S.C. § 206(a). Plaintiff moves for summary judgment on
whether WBY qualifies for enterprise coverage.

Defendants do not

dispute this issue.
Under the FLSA, employers must pay the statutorily required
minimum wage to “each of [its] employees who in any workweek is (1)
engaged in commerce 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

42

coverage’].” Henderson, 2014 WL 3767798, at *1 (quoting 29 U.S.C.
§ 206(a)). Employers fall within the FLSA’s enterprise coverage section
if they “(1) [have] employees engaged in commerce or in the production of
goods for commerce, or [have] employees handling, selling, or otherwise
working on goods or materials that have been moved in or produced for
commerce by any person and (2) [have] at least $500,000 of ‘annual gross
volume of sales made or business done.” Polycarpe v. E & S Landscaping
Service, Inc., 616 F.3d 1217, 1220 (11th Cir. 2010) (quoting 29 U.S.C.
§ 203(s)(1)(A)). “Commerce” within the FLSA 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).
Plaintiff alleges that “Defendant WBY, Inc. was an enterprise
engaged in commerce or the production of goods for commerce within the
meaning of the FLSA in calendar years 2012, 2013[,] and 2014.” (Dkt.
86-6 at ¶ 1.) Defendants do not dispute this assertion. (Dkt. 98 at ¶ 1.)
The record also establishes that WBY has employees engaged in
commerce and has at least $500,000 of annual gross volume of sale made

43

or business done. (Id. at ¶ 1; Dkt. 87-1 at ¶ 20.) Accordingly, the Court
rules that WBY is an enterprise under the FLSA.
2.

Creative Professional Exception

The Creative Professional Exception provides that employers do not
have to pay the minimum wage to professionals that fall within the
definition of a “creative professional.” 29 C.F.R. § 541.302(a). Plaintiff
moves for summary judgment, asserting that she does not qualify as a
creative professional. (Dkt. 86-7.) Defendants do not contest this issue.
To qualify for the “creative professional” exception, the employer
must compensate on a fee basis at a rate of at least $455 per week and
the employee’s primary duty is the performance of work “requiring
invention, imagination, originality or talent in a recognized field of
artistic or creative endeavor.”

Henderson, 110 F. Supp. 3d at 1321

(quoting 29 C.F.R. § 541.300(a)). “The exemption does not apply to work
which can be produced by a person with general manual or intellectual
ability and training.” Id. The test for this exception must be applied
case-by-case.

Id.

Other courts that have analyzed similar factual

circumstances have found that adult entertainers do not qualify for the
creative professional exception. Dean v. 1715 Northside Drive, Inc., 224

44

F. Supp. 3d 1302, 1323 (N.D. Ga. 2016); Henderson, 110 F. Supp. 3d at
1321; Harrell, 992 F. Supp. at 1355.
This Court agrees.

Managers at The Follies do not select

entertainers based on their dancing skill. (Dkt. 98 at ¶ 39.) Instead,
managers select entertainers based on whether the manager believes the
entertainer will spark customers’ interest. (Id. at ¶ 37.) The manager
makes this determination based on a combination of the entertainer’s
attractiveness and personality. (Id. at ¶ 39.) Dancers need not dance for
the manager before they may dance at The Follies.

(Id. at ¶ 40.)

Customers often pay for time in conversation. (Id. at ¶ 43.) The Court
finds that Plaintiff’s job at The Follies does not require the applicable
invention, imagination, or originality, and, as a result, Plaintiff does not
qualify for the “creative professional” exception.14
3.

Offsetting Minimum Wage Obligations

Plaintiff moves for summary judgment on whether Defendants
have an offset defense. (Dkt. 86-6.) Defendants do not challenge this

The Court means no disrespect to hard-working people in Plaintiff’s
industry. They simply do not meet the FLSA’s definition of a “creative
professional.”
14

45

issue. The FLSA allows employers to use service charges to offset the
employer’s obligations to pay employees. 29 C.F.R. § 531.55(b). Service
charges are “sums that are distributed by the employer to its employees,”
29 C.F.R. § 531.55(b), while tips, in contrast are “sum[s] presented by a
customer as a gift or gratuity in recognition of some service performed for
him.” 29 C.F.R. § 531.52.

To be a service charge, the fee must be

(1) recorded in a company’s gross receipts, and (2) distributed by the
company to the employee. Henderson, 110 F. Supp. 3d at 1322.
The fees that Plaintiff received from customers of The Follies were
tips, not service charges. First, WBY does not record any of the payments
that it makes to entertainers by customers. (Dkt. 98 at ¶¶ 92–93, 95–96,
98–100.) Second, the fees that customers pay dancers go directly from
customers to dancers. (Id. at ¶ 97.) The company does not distribute
these fees to the employee. (Id.) As a result, under the FLSA, the fees
that go from the company to the entertainers are tips and not service
charges. The Court finds Defendants are not entitled to offset their
minimum wage responsibilities with the tips that Plaintiff received.

46

D.

Defendants Violated the FLSA’s Minimum Wage
Provisions

Plaintiff moves for summary judgment on whether Defendants
have violated the FLSA’s minimum wage provisions. Defendants contest
this issue. The FLSA requires that employers pay the minimum wage to
employees. To fall under the FLSA’s requirements, the employer must
have employees and these employees must be engaged in commerce. 29
U.S.C. § 206(a) (“Every employer shall pay to each of his employees who
in any workweek is engaged in commerce or in the production of goods
for commerce, or is employed in an enterprise engaged in commerce or in
the production of goods for commerce, wages. . . .”). The Court, above,
found that Plaintiff was an employee. Defendants admit that WBY is an
enterprise, and under the FLSA’s definition, any enterprise must have
employees that are engaged in commerce. Defendants also admit that
they did not pay Plaintiff wages for the time in which she worked at The
Follies.

The Court finds that Defendants have violated the FLSA’s

minimum wage provisions.
Defendants make two arguments. First, Defendants claim that
Plaintiff has failed to assert the elements of a minimum wage violation.
Defendants point out that “a failure to pay wages for all the hours worked
47

will only result in a minimum wage violation when the total amount falls
below the amount of wages guaranteed under the FLSA.” (Dkt. 95 at 7)
(citing Arriaga-Zacarias v. Lewis Taylor Farms, Inc., No. 7:08-cv-32,
2008 WL 5115005, at *2–3 (M.D. Ga. Dec. 4, 2008)). Defendants’ analysis
errs because, although Plaintiff may have taken home more than the
minimum wage during some weeks in which she worked, this money
consisted of tips that she earned from dances and otherwise entertaining
The Follies’ customers. The proper inquiry is not whether her take-home
pay (including tips) was more than the minimum wage, but whether
Defendants paid her up to or above the minimum wage.

29 U.S.C.

§ 206(a). Plaintiff has persuaded the Court that she was entitled to
wages that Defendants never paid.
Defendants also argue that Plaintiff bears the burden of identifying
the workweeks in which she was “inadequately compensated.” (Dkt. 95
at 6.) To establish a prima facie case of an FLSA violation, Plaintiff must
show “as a matter of just and reasonable inference” the amount and
extent of her work to show that her employer inadequately compensated
her under the FLSA. Rance v. Rocksolid Granit USA., Inc., 291 F. App’x
1, 2 (11th Cir. 2008). Defendants claim that the only time that Plaintiff

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submitted adequate amount and extent of work were from the period
kept track of under the DJ logs. (Dkt. 95 at 6.) Defendants assert that
claims relating to all other time periods should be dismissed. (Id.) In
Plaintiff’s deposition, however, Plaintiff claims that she worked from
November 2010 through April 29, 2014.

(Dkt. 86-1 at ¶ 3.)

As

Defendants did not pay Plaintiff any wages by The Follies during that
time, Plaintiff can reasonably show that Defendants did not compensate
her under the FLSA.

A jury must now determine how many hours

Defendants did not pay Plaintiff.
IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiff’s Motion

for Partial Summary Judgment (Dkt. 86) and DENIES Defendants’
Motion for Summary Judgment (Dkt. 87).
SO ORDERED this 28th day of January, 2019.

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