Terry v. Sapphire/Sapphire Gentlemen's Club
| Decision Date | 30 October 2014 |
| Docket Number | No. 59214.,59214. |
| Citation | 336 P.3d 951,130 Nev. Adv. Op. 87 |
| Parties | Zuri–Kinshasa Maria TERRY, Individually; Marlene Nuno, Individually; Michele Cosper, Individually; Selena Denise Pelaez, Individually; Jessica Anne Morgan, Individually; and Tina Charest, Individually, and all on Behalf of Class of Similarly Situated Individuals, Appellants, v. Sapphire/SAPPHIRE GENTLEMEN'S CLUB, A Business Organization Form Unknown; and Shac, LLC, An Active Nevada Domestic Limited Liability Company d/b/a Sapphire/Sapphire Gentlemen's Club, Respondents. |
| Court | Nevada Supreme Court |
Christensen Law Offices, LLC, and Thomas Christensen, Las Vegas; Rusing & Lopez and Michael J. Rusing and Sean E. Brearcliffe, Tucson, Arizona; The Law Offices of Robert L. Starr and Robert L. Starr, Woodland Hills, California, for Appellants.
Greenberg Traurig, LLP, and Mark E. Ferrario and Tami D. Cowden, Las Vegas, for Respondents.
Before the Court En Banc.
This case presents the question of whether appellants, performers at Sapphire Gentlemen's Club, are Sapphire employees within the meaning of NRS 608.010 and thus entitled to the minimum wages guaranteed by NRS Chapter 608. Because NRS 608.010's definition of employee hinges on NRS 608.011's definition of employer, we must decide the larger issue of when an entity is an employer under NRS 608.011, and in particular whether Sapphire is the performers' employer under that section. Given that the Legislature has long used federal minimum wage laws as a platform for this state's minimum wage scheme, that the statutes in question do not signal any intent to deviate from that course, and that for practical reasons the two schemes should be harmonious in terms of which workers are entitled to protection, we herein adopt the Fair Labor Standards Act's “economic realities” test for employment in the minimum wage context. 29 U.S.C. §§ 201 –219 (2012). Under that test, the performers are Sapphire's employees within the meaning of NRS 608.010. We therefore reverse and remand.
Sapphire Gentlemen's Club contracts for semi-nude entertainment with approximately 6,600 performers. Under these contracts, the performers may determine their own schedules (but agree to work a minimum shift length of six hours any day they decide to work unless they advise a Sapphire employee of their early clock-out); set prices for their private performances (provided that they comply with the club's established minimum charge); control the “artistic aspects” of their performances (though the club D.J. chooses the music they dance to, and they must obey club rules as to body positioning and physical contact with customers); and perform at other venues should they wish to. The performers also agree to abide by certain “house rules,” including a minimum standard of coverage by their costumes and a minimum heel height; payment of a “house fee,” which ranges in amount, any night they work; and performing two dances per shift on the club stage unless they pay an “off-stage” fee.
Sapphire pays no wages to the performers; their income is dependent upon tips and dancing fees paid by Sapphire patrons. In the district court, the performers challenged this practice, claiming that they were “employees” within the meaning of NRS 608.010 and thus guaranteed a minimum wage. The district court applied a five-factor test formerly used to determine employment status under the Nevada Industrial Insurance Act, now codified at NRS Chapters 616A–616D, see Sims v. Gen. Tel. & Elecs., 107 Nev. 516, 528, 815 P.2d 151, 159 (1991), overruled by Tucker v. Action Equip. & Scaffold Co., Inc., 113 Nev. 1349, 951 P.2d 1027 (1997), overruled by
Richards v. Republic Silver State Disposal, Inc., 122 Nev. 1213, 148 P.3d 684 (2006), and found that the performers were not “employees” within the meaning of NRS Chapter 608. The district court then granted a motion for summary judgment brought by Sapphire. The performers appeal.
Only an “employee” is entitled to minimum wages under NRS Chapter 608. NRS 608.250, superseded in part by constitutional amendment as recognized in Thomas v. Nev., Yellow Cab Corp., 130 Nev. ––––, 327 P.3d 518 (2014). NRS 608.010 defines employees as “persons in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed.” Sapphire argues that the performers had no “contract of hire” and alternatively that the performers were not “in the service of” Sapphire. But these arguments lack merit. First, the signed entertainment agreement, which describes in detail the terms under which Sapphire permits the performers to dance at its facility, is an express contract of hire, despite that therein the parties state that they “intend that the relationship created [by the agreement] will be only that of Sapphire and Entertainer and not any other legal relationship.” Particularly where, as here, remedial statutes are in play, a putative employer's self-interested disclaimers of any intent to hire cannot control the realities of an employment relationship. See Rutherford Food Corp. v. McComb, 331 U.S. 722, 729, 67 S.Ct. 1473, 91 L.Ed. 1772 (1947) ; Real v. Driscoll Strawberry Assocs., Inc., 603 F.2d 748, 755 (9th Cir.1979) ; Wirtz v. Lone Star Steel Co., 405 F.2d 668, 669 (5th Cir.1968). Thus, Sapphire's protestations that the performers “never intended to be employees,” and agreed to be independent contractors are beside the point.
Second, ordinarily one is “in the service of” another where one is “of use” to that person. See Merriam–Webster's Collegiate Dictionary 1137 (11th ed.2007) (defining “serve” and “service”). And given that Sapphire concedes that the performers “are an important part of the business of a gentlemen's club, and moreover, that it is ... the dancers that patrons come to see,” the performers undeniably are “of use” to Sapphire, Sapphire's claims that the performers only “provided services to their own customers at Sapphire's facility” notwithstanding. Thus, whether the performers are “employees” under NRS 608.010 turns on whether Sapphire is their “employer.”
As relevant to this appeal, an employer “includes every person having control or custody of any employment, place of employment or any employee.” NRS 608.011. One has control where one has the “power to govern the management and policies of a person or entity.” Black's Law Dictionary 378 (9th ed.2009); see also Merriam–Webster's Collegiate Dictionary 212 (11th ed.2007) (defining “control” as “power or authority to guide or manage”). Custody is “[t]he care and control of a thing or person for ... preservation, or security.” Black's, supra, at 441; see also Merriam–Webster's, supra, at 308 (). In the abstract, these definitions may sufficiently describe an employment relationship as one where a person has the power to direct the management of or the policies governing a worker, or is to some extent responsible for that worker's preservation and security. But this court is faced with a practical problem; namely, identifying which workers, and specifically whether these workers, are entitled to minimum wage protections. And our interpretation of NRS 608.011 must provide a structure that lower courts may also use to assess the realities of various working relationships under the section. Viewed with an eye toward such practical necessities, it is clear that these definitions are insufficiently precise—a security guard, for example, may be somewhat responsible for the safety of employees in the facility he or she guards and thus fall within the definition of “employer” suggested by the conventional dictionary definition of “custody,” but it seems unreasonable to deem such an individual responsible for the wages of his or her coworkers. Thus, the interpretation to which these definitions lead is not tenable.
See Harris Assocs. v. Clark Cnty. Sch. Dist., 119 Nev. 638, 642, 81 P.3d 532, 534 (2003) ().
In 2006, Nevada voters provided a new baseline minimum wage law, Article 15, Section 16 of Nevada's Constitution (the Minimum Wage Amendment), and a definition of “employer” to accompany that platform. This definition does not control the analysis here—the performers do not raise their right to minimum wages under the Minimum Wage Amendment; and though this court has recognized that the text of the Minimum Wage Amendment supplants that of our statutory minimum wage laws to some extent, see Thomas v. Nev. Yellow Cab Corp., 130 Nev. ––––, ––––, 327 P.3d 518, 522 (2014) (), the Department of Labor continues to use the definition of “employer” found in NRS 608.011, not that in the Minimum Wage Amendment. NAC 608.070. Still, because of the overlap between the Minimum Wage Amendment and NRS Chapter 608, the Minimum Wage Amendment's definition of employer could be instructive, were it not equally, if not more, tautological than NRS 608.011 —“ ‘[e]mployer’ means any ... entity that may employ individuals.” Nev. Const. art. 15, § 16 (C). Thus, apart from signaling this state's voters' wish that more, not fewer, persons would receive minimum wage protections, see Nev. Yellow Cab Corp., 130 Nev. at ––––, 327 P.3d at 520–21 (), the Minimum Wage Amendment offers little elucidation. So it is that a more concrete interpretative aid—one extrinsic from Nevada's statutory and constitutional minimum wage frameworks—is required.
The performers urge this court to adopt the economic realities test that federal courts use under the federal Fair...
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