Grove v. Meltech, Inc.

Decision Date03 December 2020
Docket Number8:20CV193
PartiesANDREA GROVE, individually and on behalf of similarly situated individuals; and CHRYSTINA WINCHELL, individually and on behalf of similarly situated individuals; The plaintiffs, v. MELTECH, Inc.; H&S CLUB OMAHA, INC., and SHANE HARRINGTON, The defendants.
CourtU.S. District Court — District of Nebraska
MEMORANDUM AND ORDER

This matter is before the Court on the plaintiff's renewed motion for a preliminary injunction, Filing No. 75. This is an action for violations of the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. § 201,et seq., and the Nebraska Wage and Hour Act ("NWHA"), Neb. Rev. Stat. § 48-1201 et seq. Jurisdiction is based on a federal question under 28 U.S.C. § 1331.

The plaintiffs, exotic dancers, allege, on behalf of themselves and others similarly situated, that the defendants Meltech, Inc., H&S Club Omaha, and Shane Harrington (collectively, "Club Omaha") violated the FLSA and the NWPA by misclassifying them as independent contractors rather than as employees, failing to pay them minimum and overtime wages, requiring them to pay unlawful kickbacks, and retaliating against them for filing this action.

The plaintiffs renew their earlier motion for a preliminary injunction, contending that the conduct that gave rise to their original motion has continued and both a preliminary injunction and corrective notice remain necessary in order to preserve and protect the rights of the dancers at Club Omaha. Filing No. 75, renewed motion; Filing No. 18, original motion. They also argue that equitable tolling of the statute of limitations is necessary in this case since current and former Club Omaha dancers have been, and continue to be, under the impression that they are not permitted to join this putative class and collective action, and/or that they would be harshly penalized for doing so.

In support of their earlier and renewed motions, the plaintiffs present evidence of contacts between defendants and plaintiffs and potential opt-in members of a proposed collective FLSA class. See Filing No. 20-1, Ex. A, Declaration of Andrea Grove ("Grove Decl."); Filing No. 20-2, Ex. B, Declaration of Cassandra Schueth ("Schueth Decl."); Filing No. 20-3, Ex. C, Declaration of Diana Blanco ("Blanco Decl."); and Filing No. 20-4, Ex. D, Declaration of Olea Savytska ("Savytska Decl."); Filing No. 30-1, Ex. A, Declaration of Olena Savytska ("Savytska Decl. II"); Filing No. 77-1, Ex. D, Declaration of Olena Savytska ("Savytska Decl. III"). The plaintiffs' counsel provided defense counsel a list of the dancers who had opted into this case as authorized by section 216(b) of the FLSA in June 2020. See Filing No. 20-4, Ex. D, Savytska Decl. at 1. Shortly thereafter, several of the opt-ins were contacted by defendant Shane Harrington, the owner of Club Omaha, via Facebook message, and at least one dancer was confronted by Shane Harrington in person, in the presence of the defendants' counsel, and terminated. See Filing No. 20-1, Ex. A, Declaration of Andrea Grove ("Grove Decl."); Filing No. 20-2, Ex. B, Declaration of Cassandra Schueth ("Schueth Decl."); Filing No. 20-3, Ex. C, Declaration of Diana Blanco ("Blanco Decl."); and Filing No. 20-4, Ex. D, Declaration of Olena Savytska ("Savytska Decl."). Defendant Harrington reproached the dancers for this lawsuit and threatened to bring counterclaims any dancers who took part in it. See id. One of the dancers decidedto opt out of the case as a result of these tactics; others contacted plaintiff's counsel fearing further retaliation. Filing No. 20-4, Ex. D, Savytska Decl. at 1-2; Filing No. 17, Motion to Withdraw. Harrington later sent a message to current exotic dancers at Club Omaha, threatening termination for participating in the action. Filing No. 20-1, Ex. A, Grove Decl., Ex. 1.1

The plaintiffs have shown that on August 2, 2020, defendant Harrington posted a message Club Omaha group chat. Filing No. 20-4, Ex. D., Savytska Decl., Ex. 1, Screenshot. In that message, Harrington accuses the plaintiffs, the opt-ins and their counsel of harassing other dancers and states that Club Omaha is seeking $500,000.00 in damages from the plaintiffs and opt-ins. Id. In another message in the group chat, Harrington states in the message that "[he] will win and receive damages from these girls and we will throw the biggest party ever with the money[]." Filing No. 771, Savytska Decl. II, Ex. 2, Screenshot. Other evidence submitted by the plaintiffs show that Harrington unequivocally stated in a group chat message that any Club Omaha dancers who join this case would be fired. See Filing No. 20-1, Ex. A, Grove Decl., Ex. 1, Screenshot.2 Harrington also threatens dancers who share screenshots from the Club Omaha Facebook chat with termination and legal claims, stating "[o]nce we find out it was you that sent this to them, we will end your contract immediately and sue you." Filing No. 30-1, Savytska Decl., Ex. 3, Screenshot; see also Filing No. 69-10, Screenshot (stating "I willbe adding you to my lawsuit."). Also, plaintiffs' counsel states in her declaration that, in response to her request that the defendants cease improper contact, defense counsel threatened a counterclaim against them. Filing No. 20-4, Ex. D, Savytska Decl. at 2. At least one opt-in has withdrawn from the case. Id.; see Filing No. 17, Motion to Withdraw.

The record also shows that defendant Club Omaha alleges in an amended complaint filed with the American Arbitration Association ("AAA") on July 17, 2020, that "[r]espondents have engaged in a plot to destroy Claimants over the past six months, including unethical, tortious, and criminal conduct, including perjury, attempted extortion, and blackmail[]." See Filing No. 77-1, Ex. D, Savytska Decl. III, Ex. 3, AAA Amended Complaint; Filing No. 69-7, AAA Amended Complaint. In an email to the plaintiffs' counsel, titled "Settlement Offer," Club Omaha offers to settle with the plaintiffs for $50,000.00 in damages and legal fees. Filing No. 77-1, Ex. D, Savytska Decl. III, Ex. 4, correspondence from Mr. Spencer to plaintiffs' counsel. Evidence of record also shows that defendants Harrington and Club Omaha filed lawsuits against potential opt-ins Chrystina Winchell, Rylee Struble, and Alliya Lewis in Nebraska state court in January 2020. Filing No. 30-1, Ex. A, Savytska Decl., Ex. 1; Filing No. 72-5, Ex. E; Filing No. 72-6, Ex. F, Nebraska State Court Complaints.

In response to the plaintiffs' motion for injunctive relief, Club Omaha does not controvert the veracity of most of the plaintiffs' showing.3 Specifically, they do not deny Harrington's multiple written messages to current Club Omaha dancers, which make clear that dancers who assert wage and hour claims against Club Omaha will be terminated and will be sued by the club. Rather, they rely on the argument that the putative classmembers are bound by independent contractor agreements that contain an arbitration clause and they submit copies of those contracts. Filing No. 23, Brief; Filing No. 23-1, Ex. A, contracts: Filing No. 23-2, Affidavit of Shame Harrington ("Harrington Aff."); Ex. C, Affidavit of Evan Spencer ("Spencer Aff."). Also, they argue that the plaintiffs have submitted perjured affidavits. Filing No. 23, Brief at 1; Filing No. 23-3, Spencer Aff. at 2. Club Omaha contends that its conduct is legal and ethical and characterizes this FLSA action as frivolous. Filing No. 79, Defendants' Brief at 1, 3, 7. The defendants state that they have "a First Amendment right to warn their dancers that participation in this frivolous litigation is not in their best interests and that claims have been filed against these dancers." Id. at 7. They also contend they have a contractual right to communicate with the plaintiffs. Filing No. 80-1, Affidavit of Shane Harrington ("Harrington Aff. II") at 4.

In declarations submitted in opposition to the original and renewed motions, defendant Shane Harrington makes numerous irrelevant and unsubstantiated statements. See Filing No. 23-1, Harrington Aff.; Filing No.80-1, Affidavit of Shane Harrington ("Harrington Aff. II"). Defendants raise essentially the same arguments that the court addressed and rejected in denying the defendants earlier motion for sanctions. See Filing No. 73, Memorandum and Order at 5.

The plaintiffs request that this Court exercise its broad equitable powers and (1) enter a preliminary injunction prohibiting the defendants from taking additional adverse employment action against the plaintiffs, opt-ins, or any other exotic dancers who may participate in this litigation; (2) order corrective notice to all potential class and collective members; and (3) toll the statute of limitations for any potential opt-in the plaintiffs for 90 days, or until this Court is able to rule on the plaintiffs' motion for conditional certification,in order to counteract the dramatic chilling effect of the defendants' ongoing intimidation and retaliation.

II. LAW

When deciding whether to issue a preliminary injunction, the Court weighs the four Dataphase factors: (1) the threat of irreparable harm to the movant; (2) the state of the balance between this harm and the injury that granting the injunction will inflict on other parties; (3) the probability that the movant will succeed on the merits; and (4) the public interest. Johnson v. Minneapolis Park & Recreation Bd., 729 F.3d 1094, 1098 (8th Cir. 2013); (citing Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981) (en banc)). A preliminary injunction is an extraordinary remedy, and the movant bears the burden of establishing that relief is proper. Roudachevski v. All-Am. Care Centers, Inc., 648 F.3d 701, 705 (8th Cir. 2011).

A preliminary injunction cannot issue without a showing of irreparable harm. Dataphase, 640 F.2d at 114 n.9. It is the movant's burden to "demonstrate that irreparable injury is likely in the absence of an injunction." Winter v. Natural Res. Def. Council, Inc., 555...

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