Jones v. JGC Dall. LLC

• Decision Date: 29 November 2012
• Docket Number: Civil Action No. 3:11-CV-2743-O
• Parties: ERICA JONES, et al., Plaintiffs, v. JGC DALLAS LLC, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

ERICA JONES, et al., Plaintiffs, v. JGC DALLAS LLC, et al., Defendants.

Civil Action No. 3:11-CV-2743-O

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

November 29, 2012

FINDINGS, CONCLUSIONS, AND RECOMMENDATION

By order of reference dated February 17, 2012, this case has been referred for pretrial management, including the determination of non-dispositive motions and issuance of findings of fact and recommendations on dispositive motions. Before the Court for recommendation is Plaintiffs' Motion to Conditionally Certify Collective Action and Authorize Notice, filed March 2, 2012 (doc. 51). Based on the relevant filings and applicable law, the motion to conditionally certify and to authorize notice should be GRANTED.

I. BACKGROUND

This is a putative collective action suit by alleged current and former employees to recover unpaid minimum wages and overtime compensation under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. (See doc. 35.) Erica Jones, Crystal Winter, and Selisha Brooks (Plaintiffs)¹work or formerly worked as exotic dancers at Jaguar Gold Clubs (JGC)² throughout Texas and in Phoenix, Arizona. (See docs. 53-3; 53-4; 53-5.) They are suing JGC's member clubs, its owner and manager, Bryan Scott Foster, and its president of Operations, Kevin Richardson (collectively Defendants). (See doc. 35.) Plaintiffs allege that Defendants misclassified them as independent contractors to avoid the obligation to pay them minimum and overtime wages in accordance with the FLSA, failed to pay them such wages, failed to keep adequate records of their work hours and pay, and retaliated against them for filing this suit. (Id.)

Defendants answered, denying liability and asserting counterclaims for breach of agreement, unjust enrichment, and breach of arbitration agreement. (See doc. 39.) They maintain that Plaintiffs were not employees; they were licensees, lessees, or independent contractors who worked for their own advantage on the premises of another. (Id. at 9-10, 15.)³ According to Defendants, Plaintiffs performed at various JGC locations pursuant to a licensing and lease agreement called a Temporary Space Lease Agreement (TSL), or similar oral or written agreements or agreements in practice pursuant to which Plaintiffs collected and retained a portion of mandatory dance fees and all of their tips but were required to pay Defendants rent or other compensation. (Id. at 18-19.)

Plaintiffs have provided declarations from both class representatives and opt-in plaintiffs attesting to similarities in job duties and pay practices for exotic dancers at each of the JGC locations. (See docs. 53-3 through 53-7; 54-1 through 54-4; 55-1.) They averred that their primary job duties consisted of dancing on stage and performing individual dances for club customers. (Id.)None of the clubs paid them any compensation; instead, they had to pay a fee to the clubs for each shift they worked. (Id.) Plaintiffs testified that JGC required dancers to share tips with noneligible employees such as disc jockeys (DJs), house moms, and/or managers. (Id.) JGC also set the rates to be paid for dances and encouraged customers to pay with house certificates/chips, which resulted in JGC retaining a greater portion of the dancers' tips.⁴ (Id.)

Plaintiffs now move for conditional certification of a collective action and for court-authorized notice to potential plaintiffs. (See docs. 51; 52.) With a timely-filed response and reply, this motion is ripe for consideration. (See docs. 75; 76.)

II. CONDITIONAL CERTIFICATION

Plaintiffs move to conditionally certify a class of potential collective action plaintiffs comprised of exotic dancers employed at JGC member clubs from October 14, 2008 to the present (e.g., within three years of the filing of this case), regardless of their classification as employees or independent contractors. (Doc. 51 at 1.) They also move for authorization to provide written notice of the action to potential plaintiffs. (Id.)

A. Collective Action Certification Under § 216(b)

The FLSA provides that a suit may be instituted by "one or more employees for and in behalf of himself or themselves and other employees similarly situated" to recover unpaid minimum wages, overtime compensation, and liquidated damages from employers who violate the statute's provisions. 29 U.S.C. § 216(b). This type of collective action follows an "opt-in" procedure in which "[n]o employee shall be a party plaintiff to any such action unless he gives his consent inwriting to become such a party and such consent is filed in the court in which such action is brought."⁵ Id.

Under the FLSA, courts have discretion to allow a party asserting claims on behalf of others to notify potential plaintiffs that they may choose to "opt-in" to the suit. See Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 169 (1989). Although the Fifth Circuit has not adopted a specific standard to be used in determining the propriety of class certification under the FLSA, it has recognized the two-stage approach used by many courts. See Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213-14 (5th Cir. 1995), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003); Valcho v. Dallas Cnty. Hosp. Dist., 574 F. Supp.2d 618, 621 (N.D. Tex. 2008) (noting that district courts in the Northern District of Texas apply the two-stage test).⁶ This two-stage approach involves a "notice" stage and a "decertification" stage, and different evidentiary thresholds apply at each stage. Mooney, 54 F.3d at 1213-14.

At the "notice" stage, a plaintiff files a motion to authorize notice of the lawsuit to potential class members. Id. The evidentiary standard at this stage is lenient, requiring "nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan . . . ." Id. at 1214 n. 8. However, a court should be mindful of the "responsibility to avoid the 'stirring up' of litigation through unwarranted solicitation." Severtson v. Phillips Beverage Co., 137 F.R.D. 264, 266-67 (D. Minn. 1991). If the motion is granted, the district court willconditionally certify the class so that putative class members are given notice and the opportunity to "opt-in" to the lawsuit. Mooney, 54 F.3d at 1214. The action then proceeds as a representative action throughout discovery. Id. Once discovery is complete, the case proceeds to the second stage of litigation, in which the court revisits the issue of certification, usually when the defendant files a motion to decertify the class. Id.

1. Notice Stage: Similarly Situated Plaintiffs

Plaintiffs contend that the pleadings and declarations submitted demonstrate that a class of similarly situated potential plaintiffs exists, and that conditional certification and notice to putative class members is proper. (Doc. 52 at 14-16.) Defendants respond that Plaintiffs have not identified a claim appropriate for FLSA adjudication because they cannot show the existence of an employer/employee relationship. (Doc. 75 at 5, 11-12.) In the alternative, they contend that Plaintiffs have not met their burden of showing that Plaintiffs and potential class members are similarly situated; they argue that the classification of dancers as independent contractors is not a violation of the FLSA, and Plaintiffs therefore cannot show the existence of a pay policy common to the proposed class. (Id. at 5, 11-13.) Finally, they urge that Plaintiff's request for court-authorized notice is moot and/or intended as an improper fishing expedition. (Id. at 6-9, 14-17.)

In order to demonstrate that conditional certification and notice to potential plaintiffs is proper,

a plaintiff must make a minimal showing that (1) there is a reasonable basis for crediting the assertions that aggrieved individuals exist, (2) [ ] those aggrieved individuals are similarly situated to the plaintiff in relevant respects given the claims and defenses asserted, and (3) [ ] those individuals want to opt in to the lawsuit.

Prater v. Commerce Equities Mgmt. Co., Inc., No. H-07-2349, 2007 WL 4146714, *4 (S.D. Tex. Nov. 19, 2007) (citing Haynes v. Singer Co., Inc., 696 F.2d 884, 887 (11th Cir. 1983). To determinewhether the requisite showing has been made, courts look to the similarity of job requirements and pay provisions and at whether the putative class members appear to be possible victims of a common policy or plan. See Roebuck v. Hudson Valley Farms, Inc., 239 F. Supp.2d 234, 238 (N.D.N.Y. 2002); Butler v. City of San Antonio, 2003 WL 22097250, at *1 (W.D. Tex. Aug. 21, 2003). Courts may also consider whether potential plaintiffs were identified, whether affidavits of potential plaintiffs were submitted, and whether evidence of a widespread discriminatory plan was submitted. See H & R Block, Ltd. v. Housden, 186 F.R.D. 399, 400 (E.D. Tex. 1999).

Here, Plaintiffs provided declarations from both class representatives and opt-in plaintiffs attesting to similarities in job duties and pay practices for exotic dancers at each of the JGC locations. (See docs. 53-3 through 53-7; 54-1 through 54-4; 55-1.) They averred that their primary job duties consisted of dancing on stage and performing individual dances for club customers. (Id.) They claim that dancers were improperly classified as independent contractors and were therefore not paid any wages, let alone minimum wages or overtime compensation at the federally required rate. (Id.) Plaintiffs testified that JGC required dancers to share tips with noneligible employees such as DJs, house moms, and/or managers. (Id.) They maintain that every JGC location imposed the same pay practice on dancers, thereby resulting in identical FLSA violations. (Id.) Finally, since the filing of the complaint, more than twenty additional putative class members have opted into the lawsuit. (See docs. 6; 7; 8; 15; 32; 36; 37; 41; 46; 60; 62; 63; 70; 83; 100.) Although Plaintiffs did not...