Herrera v. JK & HE Business, LLC d/b/a Joy of Houston et al

Filing 44

MEMORANDUM OPINION granting in part, denying in part 36 MOTION for Partial Summary Judgment (Signed by Magistrate Judge Nancy K Johnson) Parties notified.(sjones, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
JESSICA HERRERA, individually
and on behalf of all others
similarly situated,
Plaintiffs,
v.
JK & HE BUSINESS, LLC d/b/a
JOY OF HOUSTON and HOSSEIN M.
ESHTEHARDI, individually
Defendants.

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October 14, 2016
David J. Bradley, Clerk

CIVIL ACTION NO. H-14-2986

MEMORANDUM OPINION
Pending before the court1 is Plaintiffs’ Motion for Partial
Summary Judgment (Doc. 36).

The court has considered Plaintiffs’

Partial Motion for Summary Judgment (Doc. 36), Defendants’ response
(Doc. 39), all other relevant filings, and the applicable law. For
the reasons set forth below, the court GRANTS in part and DENIES in
part Plaintiffs’ Motion for Partial Summary Judgment.
I.

Case Background

Plaintiff filed this action against Defendants under the Fair
Labor Standards Act (“FLSA”),2 alleging that Defendants failed to
pay their nonexempt employees at the federally mandated overtime

1

The parties consented to proceed before the undersigned magistrate
judge for all proceedings, including trial and final judgment, pursuant to 28
U.S.C. § 636(c) and Federal Rule of Civil Procedure 73. See Doc. 27, Ord. Dated
June 10, 2015.
2

See 29 U.S.C. §§ 201-219.

and minimum wage rates.3
A.

Factual Background
Plaintiffs are ten dancers who worked for Defendant JK & HE,

LLC d/b/a Joy of Houston (“JK & HE”).4
Eshtehardi

(“Eshtehardi”)

(“Joy”).5

Joy

Defendants.6

is

an

is

adult

a

Defendant Hossein M.

supervisor

entertainment

Joy

club

of

Houston

operated

by

Plaintiffs’ jobs were to dance for customers and they

were not paid by Defendants for their work.7
came solely from tips from customers.8

3

at

Plaintiffs’ income

Defendants provided the

See Doc. 1, Pls.’ Compl.

4
See Doc. 36, Pls.’ Mot. for Summ. J., p. 1 & n. 1; Doc. 36-1, Ex. A
to Pls.’ Mot. for Summ. J., Decl. of Jessica Herrera ¶ 2; Doc. 36-2, Ex. B to
Pls.’ Mot. for Summ. J., Decl. of Stephanie Haines ¶ 2; Doc. 36-3, Ex. C to Pls.’
Mot. for Summ. J., Decl. of Kei Erika Vanduren ¶ 2; Doc. 36-4, Ex. D to Pls.’
Mot. for Summ. J, Decl. of Joann Garcia ¶ 2; Doc. 36-5, Ex. E to Pls.’ Mot. for
Summ. J, Decl. of Jessica Gibbs ¶ 2.
5

See Doc. 11, Def. Eshtehardi’s Ans. ¶¶ 20, 23.

6

See Doc. 10, Def. JK & HE’s Ans. ¶ 23 (“Defendant admits it operated
an adult entertainment club in Houston, Texas under the name Joy of Houston.”);
Doc. 11, Def. Eshtehardi’s Ans. ¶ 23 (same).
7

See Doc. 10, Def. JK & HE’s Ans. ¶ 2 (“Defendant admits that
Plaintiff’s only compensation for work performed at Joy of Houston came from fees
from patrons.”); Doc. 11, Def. Eshtehardi’s Ans. ¶ 2 (same); Doc. 36-1, Ex. A to
Pls.’ Mot. for Summ. J., Decl. of Jessica Herrera ¶¶ 2, 28; Doc. 36-2, Ex. B to
Pls.’ Mot. for Summ. J., Decl. of Stephanie Haines ¶¶ 2, 26; Doc. 36-3, Ex. C to
Pls.’ Mot. for Summ. J., Decl. of Kei Erika Vanduren ¶¶ 2, 26; Doc. 36-4, Ex. D
to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia ¶¶ 2, 27; Doc. 36-5, Ex. E to
Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶¶ 2, 27.
8

See Doc. 10, Def. JK & HE’s Ans. ¶ 2; Doc. 11, Def. Eshtehardi’s Ans.
¶ 2; Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica Herrera ¶¶ 2,
28; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie Haines ¶¶ 2,
26; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika Vanduren ¶¶
2, 26; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia ¶¶ 2,
27; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶¶ 2, 27.

2

venue, equipment, and the stage for Plaintiffs’ performances.9
Defendants classified Plaintiffs as independent contractors.10
Other than these agreed upon facts, Plaintiffs and Defendants
each provide their own version of the facts for how the club was
operated and how the dancers were treated.

The court will first

discuss Plaintiffs’ summary judgment evidence, and then turn to
Defendants’ summary judgment evidence.
1.

Plaintiffs’ Facts

Plaintiffs attached five declarations from dancers in support
of

their

motion

for

partial

summary

judgment.

In

these

declarations, Plaintiffs averred to the following facts.
Although
contractors,

Defendants

considered

Plaintiffs

independent

Plaintiffs averred that they were “discouraged” from

working at clubs other than Joy.11

Additionally, Defendants had

9
See Doc. 10, Def. Joy’s Ans. ¶ 39b.; Doc. 11, Def. Eshtehardi’s Ans.
¶ 39b. (same).
10

See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶¶ 3, 18; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶¶ 3, 16; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶¶ 3, 16; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann
Garcia ¶¶ 3, 17; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica
Gibbs ¶¶ 3, 17; Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3; Doc.
39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3; Doc. 39-3, Ex. C to
Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3; Doc. 39-4, Ex. C to Defs.’ Resp.,
Decl. of Phillip M. Dickey ¶ 2; Doc. 39-5, Ex. D to Defs.’ Resp., Decl. of David
Homeyer ¶ 2.
11
See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶¶ 3, 18 (“I was discouraged from working at other adult entertainment
clubs.”); Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie Haines
¶¶ 3, 16 (same); Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶¶ 3, 16 (same); Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of
Joann Garcia ¶¶ 3, 17 (same); Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl.
of Jessica Gibbs ¶¶ 3, 17 (same).

3

“control over all advertising and marketing, dance prices, dancer
hiring, music selection, club layout, lighting, hiring of wait
staff, security and other employees who interact with customers,
club hours, club amenities and cleanliness, cover charges and
overall club atmosphere.”12
Plaintiffs were required to pay a “house fee” when they came
to work, and that the fee increased the later they arrived.13
Additionally, Defendants required Plaintiffs to pay a fee if they
left the club before the end of their shift.14

Plaintiffs had to

share any tips received with employees at the club, such as the
disc jockey.15 Defendants specified the price that Plaintiffs could

12

Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica Herrera
¶ 3; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie Haines ¶ 3;
Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika Vanduren ¶ 3;
Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia ¶ 3; Doc. 36-5,
Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 3.
13
See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 4 (“As soon as I arrive at Joy, I have to check in and pay a house fee
which depends on the time I arrive. The amount of house fee is determined by the
club. The later a dancer arrives, the higher the house fee.”); Doc. 36-2, Ex.
B to Pls.’ Mot. for Summ. J., Decl. of Stephanie Haines ¶ 4 (same); Doc. 36-3,
Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika Vanduren ¶ 4 (same); Doc.
36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia ¶ 4 (same); Doc. 365, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 4 (same).
14
See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 2; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 2; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 2; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 2; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 2.
15

See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 2; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 2; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 2; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 2; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 2.

4

charge customers for table dances and the VIP room.16

Customers

could pay the manager a fee and hire a dancer for a whole night.17
Defendants

set

requirements

for

Plaintiffs’

attire.18

Defendants controlled the music and required that dancers perform
on stage for a certain number of songs.19

Additionally, Plaintiffs

were not allowed to eat, drink, chew gum, or smoke while dancing.20
Plaintiffs could not sell alcohol to patrons of the establishment.21
Plaintiffs did not invest financially in the club themselves.22

16

See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 8; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 6; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 6; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 7; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 7.
17

See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica

Herrera ¶ 6.
18
See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶¶ 7, 8; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 6; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 6; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 7; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 7.
19
See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 8; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 6; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 6; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 7; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 7.
20

See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 8; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 6; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 6; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 7; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 7.
21

See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 8; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 6; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 6; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 7; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 7.
22
See Doc. 36-1, Ex.
Herrera ¶ 25; Doc. 36-2, Ex. B
Haines ¶ 23; Doc. 36-3, Ex. C
Vanduren ¶ 23; Doc. 36-4, Ex. D

A to Pls.’ Mot. for Summ. J., Decl. of Jessica
to Pls.’ Mot. for Summ. J., Decl. of Stephanie
to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia

5

Additionally, Plaintiffs did not provide feedback on what food or
alcohol to serve, or on the type of advertising, marketing,
promotional events, or memberships the club should have.23

The

majority of dancers did not did not have regular customers who came
to the club specifically to see them.24

Plaintiffs averred that

they relied on the club to attract patrons.25
Plaintiffs and most entertainers at Joy were not formally
trained in dance.26

Plaintiffs aver that management at Joy would

give them any “necessary” training, but the managers did not train
them in dance, as they did not have such expertise.27

The skills

¶ 24; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 24.
23

See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 25-26; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 23-24; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 23-24; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann
Garcia ¶ 24-25; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica
Gibbs ¶ 24-25.
24

See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 14; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 12; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 12; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 13; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 13.
25
See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 5; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 5; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 5; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 5; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 5.
26
See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 19; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 17; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 17; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 18; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 18.
27

See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 19; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 17; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 17; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 18; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 18.

6

required to work as a dancer at Joy were those “that an ordinary
person of reasonable fitness and coordination would have.”28
Plaintiffs averred that appearance mattered more than dancing
skills when it came to making money at Joy, but that, ultimately,
the club had significant control over how much money they could
earn.29
2.

Defendants’ Facts

Defendants

also

submitted

five

declarations

response to Plaintiffs’ motion for summary judgment.

with

their

Three of

these declarations were from dancers and two were from managers who
worked for Joy.
These declarations stated that the dancers were able to
perform at other clubs at their discretion.30 Also, the dancers had
control over their schedules and could choose what days and times

28
Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica Herrera
¶ 20; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie Haines ¶
18; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika Vanduren ¶
18; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia ¶ 19; Doc.
36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 19.
29
See Doc. 36-1, Ex. A to Pls.’ Mot. for Summ. J., Decl. of Jessica
Herrera ¶ 21; Doc. 36-2, Ex. B to Pls.’ Mot. for Summ. J., Decl. of Stephanie
Haines ¶ 19; Doc. 36-3, Ex. C to Pls.’ Mot. for Summ. J., Decl. of Kei Erika
Vanduren ¶ 19; Doc. 36-4, Ex. D to Pls.’ Mot. for Summ. J, Decl. of Joann Garcia
¶ 20; Doc. 36-5, Ex. E to Pls.’ Mot. for Summ. J, Decl. of Jessica Gibbs ¶ 20.
30

See Doc. Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶
3(d); Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(e); Doc. 39-3,
Ex. C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(d); Doc. 39-4, Ex. C to
Defs.’ Resp., Decl. of Phillip M. Dickey ¶ 2(a); Doc. 39-5, Ex. D to Defs.’
Resp., Decl. of David Homeyer ¶ 2(a).

7

they wanted to work.31

The dancers who submitted declarations for

Defendants averred that they chose to be dancers because they were
able to earn more money and have more control over their schedules
then they would at a traditional job.32
The dancers set their own fees for dances and decided how long
to dance for customers.33 Dancers were told they could, but did not
have to, pay a license fee to the club to perform.34

There was no

requirement that dancers share their tips with employees at Joy.35
The managers of the club did not arrange customers for the dancers
for the evening.36

Most of the dancers had repeat customers who

31
See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(a);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(b); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(a); Doc. 39-4, Ex. C to Defs.’
Resp., Decl. of Phillip M. Dickey ¶ 2(a); Doc. 39-5, Ex. D to Defs.’ Resp., Decl.
of David Homeyer ¶ 2(a).
32

See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(e);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(f); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(e).
33
See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(c);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(d); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(c); Doc. 39-4, Ex. C to Defs.’
Resp., Decl. of Phillip M. Dickey ¶ 2(c); Doc. 39-5, Ex. D to Defs.’ Resp., Decl.
of David Homeyer ¶ 2(c).
34

See Doc. Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶
3(d)(“While payment by the dancers of floor fees or licensee fees in exchange for
the right to provide dancing or entertainment services is encouraged, it is not
a precondition to entering the club and providing those services.”); Doc. 39-2,
Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(e)(same); Doc. 39-3, Ex. C to
Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(d)(same).
35

See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(h);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(i); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(h); Doc. 39-4, Ex. C to Defs.’
Resp., Decl. of Phillip M. Dickey ¶ 2(g); Doc. 39-5, Ex. D to Defs.’ Resp., Decl.
of David Homeyer ¶ 2(g).
36

See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(b);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(c); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(b); Doc. 39-4, Ex. C to Defs.’

8

came to the club to see them.37 The dancers took responsibility for
advertising their services by contacting customers by phone or
social media.38
The dancers were not required wear certain attire and they
supplied their own.39

There was no policy at the club against the

dancers eating, drinking, smoking, or chewing gum.40

The dancers

were not required to dance on stage, and, if they did dance on
stage, they were not required to stay on stage for a any amount of
time and could choose their own music.41

Dancers did not receive

Resp., Decl. of Phillip M. Dickey ¶ 2(b); Doc. 39-5, Ex. D to Defs.’ Resp., Decl.
of David Homeyer ¶ 2(b).
37

See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(b);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(c); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(b); Doc. 39-4, Ex. C to Defs.’
Resp., Decl. of Phillip M. Dickey ¶ 2(b); Doc. 39-5, Ex. D to Defs.’ Resp., Decl.
of David Homeyer ¶ 2(b).
38
See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(f);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(g); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(f).
39
See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(d);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(e); Doc. 39-3, Ex.
C to Defs.’ Resp. to Pls.’ Mot. for Summ. J., Decl. of Sarah Gutierrez ¶ 3(d);
Doc. 39-4, Ex. C to Defs.’ Resp., Decl. of Phillip M. Dickey ¶ 2(d); Doc. 39-5,
Ex. D to Defs.’ Resp., Decl. of David Homeyer ¶ 2(d).
40
See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(i);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(j); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(i); Doc. 39-4, Ex. C to Defs.’
Resp., Decl. of Phillip M. Dickey ¶ 2(h); Doc. 39-5, Ex. D to Defs.’ Resp., Decl.
of David Homeyer ¶ 2(h).
41

See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(g);
Doc. 39-2, Ex. B to Defs.’ Resp, Decl. of Kirsten Riggs ¶ 3(h); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(g); Doc. 39-4, Ex. C to Defs.’
Resp., Decl. of Phillip M. Dickey ¶ 2(f); Doc. 39-5, Ex. D to Defs.’ Resp., Decl.
of David Homeyer ¶ 2(f).

9

any training from the club.42

The dancers averred that dancing at

the club required above average skills and that their earning
potential

was

based

on

their

skills

and

ability

to

attract

customers and maintain those relationships.43
B.

Procedural Background
Plaintiffs filed this action on October 20, 2015, alleging

willful violations of the FLSA.44

Defendants filed their answers

on November 21, 2014, and November 24, 2014.45

Plaintiffs filed a

motion to certify class on March 9, 2015, which was followed by a
response by Defendant on March 30, 2015, and a reply by Plaintiff
on April 10, 2015.46

Additionally, Defendant JK & HE made a motion

for leave to file a counterclaim on April 10, 2015.47

Plaintiffs

responded to this motion for leave to file a counterclaim on May 1,
2015, and Defendants JK & HE replied on May 11, 2015.48
On June 22, 2015, the court issued a memorandum opinion and
42

See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(f);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(g); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(f).
43

See Doc. 39-1, Ex. A to Defs.’ Resp., Decl. of Rosa Salas ¶ 3(f);
Doc. 39-2, Ex. B to Defs.’ Resp., Decl. of Kirsten Riggs ¶ 3(g); Doc. 39-3, Ex.
C to Defs.’ Resp., Decl. of Sarah Gutierrez ¶ 3(f).
44

See Doc. 1, Pls.’ Compl.

45

See Doc. 10, Def. JK & HE’s Ans.; Doc. 11, Def. Eshtehardi’s Ans.

46

See Doc. 17, Pls.’ Mot. to Certify Class; Doc. 18., Defs.’ Resp. to
Pls.’ Mot. to Certify Class; Doc. 21, Pls.’ Reply to Defs.’ Resp. to Pls.’ Mot.
to Certify Class.
47

See Doc. 20, Defs.’ Mot. for Leave to File Orig. Counterclaim

48

See Doc. 25, Defs.’ Reply to Pls.’s Resp. to Defs.’ Mot. for Leave
to File a Counterclaim.

10

order, granting the motion to certify the class and denying
Defendants’ motion for leave to file a counterclaim.49

After this

was issued, additional Plaintiffs joined the class by filing their
consents.50
Plaintiffs filed this motion for partial summary judgment on
March 22, 2016.51

Defendants responded on May 6, 2016.52

The

parties filed joint motions to extend the deadlines in the case on
April 1, 2016 and August 1, 2016.53
II.

Legal Standard

Summary judgment is warranted when the evidence reveals that
no genuine dispute exists on any material fact and the moving party
is entitled to judgment as a matter of law.

Fed. R. Civ. P. 56(a);

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Stauffer v.
Gearhart, 741 F.3d 574, 581 (5th Cir. 2014).

A material fact is a

fact that is identified by applicable substantive law as critical
to the outcome of the suit.

Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248 (1986); Ameristar Jet Charter, Inc. v. Signal
Composites, Inc., 271 F.3d 624, 626 (5th Cir. 2001). To be genuine,
49

See Doc. 28, Mem. Op. & Ord. Dated June 22, 2015.

50

See Doc. 29, Pls.’ Notice of Filing Consent; Doc. 30, Pls.’ Notice
of Filing of Consent Forms; Doc. 31, Pls.’ Notice of Filing Consents; Doc. 32,
Pls.’ Notice of Filing Consent; Doc. 33, Pls.’ Notice of Filing Consents.
51

See Doc. 36, Pls.’ Mot. for Summ. J.

52

See Doc. 39, Defs.’ Resp. to Pls.’ Mot. for Summ. J.

53

See Doc. 37, Joint Mot. for Extension of Time Pretrial Deadlines
Dated Apr. 1, 2016; Doc. 42, Joint Mot. for Extension of Time Pretrial Deadlines
Dated Aug. 1, 2016.

11

the dispute regarding a material fact must be supported by evidence
such that a reasonable jury could resolve the issue in favor of the
nonmoving party.

See Royal v. CCC & R Tres Arboles, L.L.C., 736

F.3d 396, 400 (5th Cir. 2013)(quoting Anderson, 477 U.S. at 248).
The movant must inform the court of the basis for the summary
judgment motion and must point to relevant excerpts from pleadings,
depositions, answers to interrogatories, admissions, or affidavits
that demonstrate the absence of genuine factual issues.

Fed. R.

Civ. Pro. 56(c); Celotex Corp., 477 U.S. at 323; Topalian v.
Ehrman, 954 F.2d 1125, 1131 (5th Cir. 1992).

If the moving party

carries its burden, the nonmovant may not rest on the allegations
or denials in his pleading but must respond with evidence showing
a genuine factual dispute. Stauffer v. Gearhart, 741 F.3d 574, 581
(citing Hathaway v. Bazany, 507 F.3d 312, 319 (5th

Cir. 2007)).

III. Analysis
Plaintiffs have moved for partial summary judgment on three
different issues, arguing that they are employees, not independent
contractors, that Defendant Eshtehardi is an employer, and that
Defendants have not met their burden on their affirmative defenses.
The court will address each argument in turn.
A.

Employees or Independent Contractors
The

FLSA

requires

covered

employers

to

pay

non-exempt

employees for hours worked in excess of defined maximum hours. See
29

U.S.C.

§

207(a)(1)

(requiring
12

that

covered

employers

pay

employees at least one-and-a-half times the regular rate for hours
worked in excess of forty hours per week).

It allows employees to

bring an action against their employers for violation of its hour
and wage provisions.

See 29 U.S.C. §§ 215-216.

The determination of whether Plaintiffs are employees under
the FLSA is a legal finding, not a factual finding.

See Lindsley

v. BellSouth Telecomms. Inc., No. 09-30699, 2010 WL 4609109, at *1
(5th Cir. Nov. 15, 2010) (unpublished) (citing Brock v. Mr. W
Fireworks, Inc., 814 F.2d 1042, 1045 (5th Cir. 1987)).

The “focal

inquiry in determining employee status is whether the individual
is, as a matter of economic reality, in business for herself.”
Reich v. Circle C. Invs., Inc., 998 F.2d 324, 327 (5th Cir.
1993)(citing Donovan v. Tehco, 642 F.2d 141, 143 (5th Cir. 1981)).
To help determine the extent of a worker’s dependency under
this economic reality test, courts in the Fifth Circuit look to the
following five factors: (1) the degree of control exercised by the
alleged employer; (2) the extent of the relative investments of the
worker and alleged employer; (3) the degree to which the worker’s
opportunity for profit and loss is determined by the alleged
employer; (4) the skill and initiative required in performing the
job; and (5) the permanency of the relationship.
at 327.

Reich, 998 F.2d

No individual factor can determine whether someone is an

independent contractor or employee on its own.

Id. (citing Mr. W

Fireworks, 814 F.2d 1042, 1054 (5th Cir. 1987). The outcome of this

13

analysis depends on the specific facts of the case.

Thibault v.

Bellsouth Telecomms., Inc., 612 F.3d 843, 848 (5th Cir. 2010)(“[t]he
determination
independent

of

whether

contractor

an

is

individual

highly

is

dependent

an

on

employee

the

or

particular

situation presented.”).
Plaintiffs assert in their motion for partial summary judgment
that they are employees of Defendants, not independent contractors.
Defendants

respond

that

Plaintiffs

should

not

be

considered

employees.

Defendants contend that the Plaintiffs have not shown

that Defendants had enough control over them to win this issue at
the summary judgment stage.
Looking at the record, the evidence supplied by Plaintiffs and
Defendants conflicts on many key issues including the following:
who dictated Plaintiffs’ attire, the music, and the fees charged
for dances; whether and to what extent Plaintiffs had to perform on
stage; whether Plaintiffs had to pay a fee if they left their shift
early; whether the fee Plaintiffs paid to perform at Joy was
mandatory; whether Plaintiffs received any dance or other training
from Joy; whether the managers set up patrons with dancers for the
night; whether Plaintiffs had regular customers that they brought
into the club or if they relied on the club for customers; and
whether Plaintiffs had to share tips with employees of Joy.
The conflicting evidence provided by Plaintiffs and Defendants
prevents the court from granting partial summary judgment on this

14

the issue of whether Plaintiffs are employees or independent
contracts, as the conflicts demonstrate that there are still
disputes of genuine material fact.

These conflicting facts go to

the heart of whether or not Defendants had control over the work
activities of Plaintiffs, which is essential in deciding whether
Plaintiffs were independent contractors or employees.

Therefore,

the court denies partial summary judgment on the issue of whether
or not Plaintiffs were employees or independent contractors.
B.

Defendant Eshtehardi
Under the FLSA, an “employer includes any person acting

directly or indirectly in the interest of an employer in relation
to an employee.”

Gray v. Powers, 673 F.3d 352, 354 (5th Cir.

2012)(citing 29 U.S.C. § 203(d))(internal quotations omitted).

An

economic reality test is used in the Fifth Circuit to determine
whether an employer/employee relationship exists.
at 354.

Gray, 673 F.3d

Courts consider the following factors in this analysis:

“whether the alleged employer: (1) possessed the power to hire and
fire the employees, (2) supervised and controlled employee work
schedules or conditions of employment, (3) determined the rate and
method of payment, and (4) maintained employment records.”
355.

Id. at

If there is potentially more than one employer in a case,

each separate individual or entity must satisfy this test to be
considered an employer.

Id.

Plaintiffs argue that Defendant Eshtehardi is their employer

15

because he had hiring and firing authority, he acted as their
supervisor,

controlled

employment,

their

controlled

how

schedules

much

maintained Plaintiffs’ records.

and

Plaintiffs

conditions
were

paid,

of
and

Defendants argue that Defendant

Eshtehardi should not be considered an employer of Plaintiffs under
the

FLSA

because

Plaintiffs

are

independent

contractors,

not

employees.
From the record, Defendant Eshtehardi admits he had the power
to hire and fire employees, supervise and control employee work
schedules, determine the employees’ rate and method of payment, and
maintain employment records.54
as

to

Plaintiffs,

contractors.

whom

However, those issues are contested

Defendants

contend

are

independent

Therefore, the court denies partial summary judgment

on the issue of whether Defendant Eshtehardi is an employer of
Plaintiffs.
C.

Affirmative Defenses
Summary

defenses.

judgment

can

be

used

to

adjudicate

affirmative

See Ford v. Hous. Indep. Sch. Dist., 97 F. Supp.3d 866,

871 (S.D. Tex. 2015).

A defendant has the ultimate burden of

persuasion on affirmative defenses.

Rushing v. Kan. City S. Ry.

Co., 185 F.3d 496, 505 (5th Cir. 1999).

54

Therefore, with regard to

See Doc. 11, Def. Eshtehardi’s Ans. ¶ 20 (“Defendant admits that he
had, at all times relevant to this lawsuit, the authority to hire and fire
employees, the authority to direct and supervise the work of employees, the
authority to sign the business’ checking accounts, including payroll accounts,
and the authority to make decisions regarding employee compensation and capital
expenditures, and admits that they were responsible for FLSA compliance.”).

16

affirmative defenses at the summary judgment stage, a defendant
“must adduce evidence to support each element of its defenses and
demonstrate the lack of any genuine issue of material fact with
regard thereto.”

Id.

In their answers, Defendants assert the affirmative defenses
of laches, estoppel, waiver, ratification, release and/or consent,
equitable estoppel, failure to state a claim, and lack of control.
Plaintiffs argue in their motion for partial summary judgment that
Defendants

failed

to

plead

these

affirmative

defenses,

and,

alternatively, the defenses Defendants assert are improper in an
FLSA case.
1.

Good Faith

According to Federal Rule of Civil Procedure 8(c), “[i]n
responding to a pleading, a party must affirmatively state any
avoidance or affirmative defense.”

Fed. R. Civ. P. 8(c)(1).

If a

defendant fails to timely plead an affirmative defense, it may be
waived by the defendant. LSREF2 Baron, LLC v. Tauch, 751 F.3d 394,
398 (5th Cir. 2014).
The affirmative defense of good faith is available under the
FLSA.

See, e.g., Tran v. Thai, No. H-08-3650, 2010 WL 5232944, at

*5-6 (S.D. Tex. Dec. 16, 2010).

However, Defendants failed to

plead the affirmative defense of good faith in their answers, and
they did not oppose summary judgment on this issue.

Therefore,

there is no genuine issue of material fact as to this defense, and

17

Plaintiffs’ motion for partial summary judgment should be granted
with regard to the affirmative defense of good faith.
2.

Failure to State a Claim

District courts have found that failure to state a claim is
not an affirmative defense, but rather raises a defect in a
plaintiff’s complaint. PNC Bank, Nat’l. Ass’n. v. SM & JH, LLC, No
4:12-CV-597-JCH,

2012

WL

2905047,

at

*2

(E.D.

Mo.

July

6,

2012)(“failure to state a claim is not a proper affirmative defense
but, rather, asserts a defect in Plaintiff’s prima facie case.”);
Boldstar Tech., LLC v. Home Depot, Inc., 517 F. Supp.2d 1283, 1292
(“Failure to state a claim is a defect in the plaintiff’s claim; it
is

not

an

additional

set

of

facts

that

bars

recovery

notwithstanding the plaintiff’s valid prima facie case. Therefore,
it is not properly asserted as an affirmative defense.”).
court finds these cases persuasive.

The

Because failure to state a

claim is an attack on Plaintiffs’ pleadings and not an affirmative
defense supported by facts raised by Defendants, the court grants
Plaintiffs’ motion for partial summary judgment with regard to
Defendants’ affirmative defense of failure to state a claim.
3.

Lack of Control

Defendants assert the following “lack of control” affirmative
defense in their answers, stating, “Plaintiff’s claims are barred,
in whole or in part, because any damage or injury, if any, that
Plaintiff sustained is the result of her own acts or omissions or
18

the result of acts or omissions of other persons or entities over
which Defendant had no control.”55 Plaintiffs argue that Defendants
did not provide them with fair notice for this affirmative defense
because they did not properly plead this affirmative defense and
that it is “unintelligible.”

Defendants cite no authority and the

court is aware of none stating that this is a valid affirmative
defense in an FLSA action.

Therefore, Plaintiffs’ motion for

partial summary judgment is granted with regard to Defendants’
“lack of control” affirmative defense.
4.

Waiver, Estoppel, Ratification, Laches, Release, Consent
A defendant “must plead an affirmative defense with enough

specificity of factual particularity to give the plaintiff ‘fair
notice’ of the defense that is being advanced.”
Bowman, 193 F.3d 354, 361 (5th Cir. 1999).

Woodfield v.

For some defenses such

as contributory negligence, it is enough to merely name the defense
to put the plaintiff on notice; however, for other broad defenses
such as waiver and/or release, the Fifth Circuit has held that
merely naming these defenses with no support is not enough to put
a plaintiff on notice that a defendant intends to raise the
defense. Id. Additionally, “[i]t is unclear whether the equitable
defenses

of

waiver,

estoppel,

available under the FLSA.”

55

unclean

hands,

and

laches

are

Tran, 2010 WL 5232944, at *8; see also

Doc. 10, Def. JK & HE’s Ans. p. 11; Doc. 11, Def. Eshtehardi’s Ans

p. 11.

19

Perez-Nunez v. North Broward Hosp. Dist., No. 08-61583-CIV, 2009 WL
723873, at *2 (S.D. Fla. March 13, 2009)(“The doctrines of waiver,
estoppel, and laches are generally not applicable to FLSA claims”).
Even if defenses such as waiver or laches are valid under the
FLSA, Defendants have failed to plead the defenses of laches,
estoppel,

waiver,

ratification,

release

equitable estoppel with any specificity.

and/or

consent,

and

Defendants merely state

in their answer that Plaintiffs’ claims are barred because of these
affirmative defenses. Additionally, Defendants fail to provide any
legal or factual support in favor of any of these affirmative
defenses in their response to Plaintiffs’ motion for partial
summary judgment.
Fifth

Circuit

Because these are broad defenses like those the

discussed

in

Woodfield,

the

court

finds

that

Defendants have not met their burden to raise a genuine issue of
material fact on any of these defenses.

They have not pled with

enough specificity to put Plaintiff on notice of the factual basis
for these potential defenses.

Therefore, the court grants partial

summary judgment for Plaintiffs on the affirmative defenses of
laches, estoppel, waiver, ratification, release and/or consent, and
equitable estoppel.
IV.

Conclusion

Based on the foregoing, the court GRANTS in PART and DENIES in
part Plaintiffs’ motion for partial summary judgment.

The court

grants Plaintiffs’ motion as to Defendants’ affirmative defenses,
20

but denies the motion as to the issues of whether Plaintiffs are
independent

contractors

or

employees,

and

whether

Defendant

Eshtehardi is Plaintiffs’ employer.
SIGNED in Houston, Texas, this 14th

day of October, 2016.

______________________________
U.S. MAGISTRATE JUDGE

21