Harrell v. Diamond a Entertainment, Inc.

• Decision Date: 28 November 1997
• Docket Number: No. 96-137-CIV-FTM-24(D).,96-137-CIV-FTM-24(D).
• Citation: 992 F.Supp. 1343
• Parties: Lora HARRELL, Plaintiff, v. DIAMOND A ENTERTAINMENT, INC., Defendant.
• Court: U.S. District Court — Middle District of Florida

992 F.Supp. 1343

Lora HARRELL, Plaintiff, v. DIAMOND A ENTERTAINMENT, INC., Defendant.

No. 96-137-CIV-FTM-24(D).

United States District Court, M.D. Florida.

November 28, 1997.

COPYRIGHT MATERIAL OMITTED

Douglas L. Wilson, Wilson Law Firm, Naples, FL, for Lora Harrell, plaintiff.

Lawrence G. Walters, Doran, Walters, Rost & Wolfe, Daytona Beach, FL, Bradley J. Shafer, Law office of Bradley J. Shafer, Lansing, MI, for Diamond A Entertainment, Inc., defendant.

ORDER

BUCKLEW, District Judge.

This cause comes before the Court for consideration of Defendant's Motions for Partial Summary Judgment (Doc. Nos. 37 and 37A, filed July 21, 1997). Plaintiff filed a response on October 6, 1997 (Doc. No. 59).

Plaintiff Lora Harrell commenced this action on April 17, 1996 (Doc. No. 1), alleging that Defendant Diamond A failed to pay her a minimum wage in violation of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201, et seq. (the "FLSA").¹ From December, 1993, to April, 1995, Ms. Harrell worked as an exotic dancer at two Fort Myers nightclubs ("Babe's" and "Foxy Lady") which were operated by Diamond A. The questions presented are whether an exotic dancer is an "employee" entitled to protection under the FLSA, and whether an exotic dancer is a "professional" within the meaning of certain exemptions to the FLSA.

I. FACTS

The basic facts are simple and not in dispute.² Following a short stint as a waitress,³ Plaintiff "tried out" for a position as an exotic dancer at Babe's. Plaintiff began dancing at Babe's in December, 1993. As a dancer, Plaintiff's sole source of income was the tips (or "dance fees") she extracted from customers for the performance of "stage dances" and "table dances." A "stage dance," as the term implies, is a dance performed on a raised platform for the customers at large. A "table dance" is dance performed off-stage in a relatively smaller space (such as the space immediately in front of a seated customer, or on a couch or tabletop) for one paying customer. In general, a customer paid a "set fee" (or $5 or $10) for a table dance.

The relationship between a dancer and a Diamond A club was structured as a licensing arrangement. The dancer and Diamond A enter into a "License to Use Business Premises" (see Exh. A to Doc. No. 37B), which grants the dancer a nonexclusive license to dance and entertain customers at certain specified nightclubs. In exchange for the license, the dancer pays the club a licensing fee (called "shift pay") of $10.00 per day shift and $15.00 per night shift.⁴ The dancer retains all tips (or "dance fees") that she receives from customers for stage dances and table dances; she does not report (or otherwise account for) any of her earnings to the club; and the club does not pay the dancer any wages or other form of stipend.⁵

As a dancer, Plaintiff made approximately $125 to $150 per eight-hour shift. See Harrell Deposition (Exh. B to Doc. No. 37B). Defendant danced at Diamond A clubs until April 1, 1995, when her license was terminated.⁶

II. DISCUSSION

Defendant argues that Plaintiff is not an "employee" entitled to the protection of the FLSA because she was engaged, at all times material to her claim, as an independent contractor. Even assuming Plaintiff was an "employee," Defendant argues she was a "professional" within the meaning of the § 213 exemption from the FLSA. Defendant also argues that exotic dancers like Plaintiff are not in the category of persons that Congress intended to protect, and that Plaintiff is estopped from raising an FLSA claim because she failed to raise during her employment and failed to prepare and file the appropriate tax returns and reports.

A. Summary Judgment Standard

The Eleventh Circuit discussed the standard for granting summary judgment in Hairston v. Gainesville Sun Pub. Co., 9 F.3d 913, 918 (1993), reh'g and reh'g en banc denied, 16 F.3d 1233 (11th Cir.1994):

Federal Rule of Civil Procedure 56(c) authorizes summary judgment when all "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

Hairston, 9 F.3d at 918. The Eleventh Circuit recognized the seminal case concerning summary judgment, Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), by highlighting the following passage:

[T]he plain language of Rule 56(c) mandates the entry of summary judgment after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be "no genuine issue as to any material fact," since a complete failure of proof concerning an essential element of the non-moving party's case necessarily renders all other facts immaterial.

Id. at 918. In conclusion, the Eleventh Circuit outlined the parties' respective burdens and the ruling court's responsibilities:

The party seeking summary judgment bears the initial burden to demonstrate to the district court the basis for its motion for summary judgment and identify those portions of the pleadings, depositions, answers to interrogatories, and admissions which it believes show an absence of any genuine issue of material fact. Taylor v. Espy, 816 F.Supp. 1553, 1556 (N.D.Ga. 1993) (citation omitted). In assessing whether the movant has met this burden, the district court must review the evidence and all factual inferences drawn therefrom, in the light most favorable to the nonmoving party. Welch v. Celotex, 951 F.2d 1235, 1237 (11th Cir.1992); Rollins v. TechSouth, Inc., 833 F.2d 1525, 1528 (11th Cir.1987). If the movant successfully discharges its burden, the burden then shifts to the non-movant to establish, by going beyond the pleadings, that there exist genuine issues of material fact. Matsushita Electric Industrial Co. v. Zenith Radio Corp.[,] 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986); Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991).

Applicable substantive law will identify those facts that are material. Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Genuine disputes are those in which the evidence is such that a reasonable jury could return a verdict for the non-movant. Id. For factual issues to be considered genuine, they must have a real basis in the record. Matsushita, 475 U.S. at 586-87, 106 S.Ct. at 1355-56. It is not part of the court's function, when deciding a motion for summary judgment, to decide issues of material fact, but rather determine whether such issues exist to be tried. Anderson, 477 U.S. at 249, 106 S.Ct. at 2510. The Court must avoid weighing conflicting evidence or making credibility determinations. Id. at 255, 106 S .Ct. at 2513-14. Instead, "[t]he evidence of the non-movant is to be believed in his favor." Id. Where a reasonable fact finder may "draw more than one inference from the facts, and that inference creates a general issue of material fact, then the court should refuse to grant summary judgment." Barfield v. Brierton, 883 F.2d 923, 933-34 (11th Cir. 1989) (citation omitted).

Id. at 918-19. See Mulhall v. Advance Sec. Inc., 19 F.3d 586, 589-90 (11th Cir.1994); Howard v. BP Oil Co., 32 F.3d 520, 523-24 (11th Cir.1994).

B. Employer/Employee Relationship.

Exotically structured working arrangements are a common feature in the adult entertainment industry. See, e.g., 303 West 42nd Street Enterprises, Inc. v. Internal Revenue Service, 916 F.Supp. 349 (S.D.N.Y. 1996) (tax case in which club characterized nude performers as "tenants" leasing space in peek-a-boo booths); Club Hubba Hubba v. United States, 239 F.Supp. 324 (D.Haw.1965) (tax case in which club characterized imported troupe of Japanese dancers as independent contractors). Arrangements factually similar to the one in this case have been tested by federal courts in Texas, Indiana and Colorado. See Reich v. Circle C. Investments, Inc., 998 F.2d 324 (5th Cir.1993) (whether dancer was "employee" under FLSA); Reich v. ABC/York-Estes Corp., 1997 WL 264379 (N.D.Ill.1997) (whether dance fees were "tips" under FLSA); Reich v. Priba Corp., 890 F.Supp. 586 (N.D.Tex. 1995) (whether dancer was "employee" under FLSA); Reich v. ABC/York-Estes Corp., 157 F.R.D. 668 (N.D.Ill.1994) (whether dance fees were "tips" under FLSA), rev'd on other grounds, 64 F.3d 316 (7th Cir.1995); Martin v. Priba Corp., 1992 WL 486911 (N.D.Tex.) (whether dancer was "employee" under FLSA); Martin v. Circle C Investments, Inc., 1991 WL 338239 (W.D.Tex.); Donovan v. Tavern Talent & Placements, Inc., 1986 WL 32746 (D.Colo.) (whether "tips" could be used to offset completely the minimum wage requirement). Without exception, these courts have found an employment relationship and required the nightclub to pay its dancers a minimum wage. To our knowledge, no court in the Eleventh Circuit has ever addressed the issue.

Under the FLSA, employment is defined with "striking breadth." Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326, 112 S.Ct. 1344, 1350, 117 L.Ed.2d 581 (1992) (citing Rutherford Food Corp. v. McComb, 331 U.S. 722, 728, 67 S.Ct. 1473, 1475, 91 L.Ed. 1772 (1947)). An entity is said to "employ" a person if it "suffers or permits" the person to work. 29 U.S.C. § 203(g). The "suffer or permit to work" standard derives from state child-labor laws and has been called "the broadest definition [of employee] that has ever been included in one act." Antenor v. D & S Farms, 88 F.3d 925, 929 n. 5 (11th Cir.1996) (citing Rutherford Food Corp., 331 U.S. at 728 n. 7, 67 S.Ct. at 1476 n. 7, and quoting United States v. Rosenwasser, 323 U.S. 360, 363 n. 3, 65 S.Ct. 295, 297 n. 3, 89 L.Ed. 301 (1945)). Courts look not to...