Hurst v. Youngelson

• Decision Date: 28 January 2019
• Docket Number: Case No. 1:15-cv-03560
• Parties: Brezzy HURST, Plaintiff, v. Steven YOUNGELSON, et al., Defendants.
• Court: U.S. District Court — Northern District of Georgia

354 F.Supp.3d 1362

Brezzy HURST, Plaintiff,

v.Steven YOUNGELSON, et al., Defendants.

Case No. 1:15-cv-03560

United States District Court, N.D. Georgia, Atlanta Division.

Signed January 28, 2019

Charles Ronald Bridgers, Matthew Wilson Herrington, Michael Alan Caldwell, DeLong Caldwell Bridgers Fitzpatrick & Benjamin, LLC, Atlanta, GA, for Plaintiff.

Naveen Kabir, Constangy, Brooks, Smith & Prophete LLP, New York, NY, Tamika R. Nordstrom, Erica V. Mason, Constangy, Brooks, Smith & Prophete, LLP, Atlanta, GA, for Defendants.

OPINION AND ORDER

Michael L. Brown, United States District Judge

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 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, 106 S.Ct. 2548, 91 L.Ed.2d 265 (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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The moving party bears the initial responsibility of asserting the basis for her motion. Catrett , 477 U.S. at 323, 106 S.Ct. 2548. 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, 106 S.Ct. 2505.

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 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; 86-6.) 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 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. 1:12-cv-3359, 2013 WL 6880921, at *2 (N.D.).

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 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 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.

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.

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; 77-1.) She could use the tickets for her own drinks...