UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
April 29, 2011
QUANSA THOMPSON, ET AL., PLAINTIFFS,
LINDA AND A., INC T/A THE HOUSE, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Beryl A. Howell United States District Judge
Five exotic dancers brought this action against the owners and operators of "The House," "an exotic gentlemen's club in Washington, D.C. featuring nude female dancers." Mem. in Supp. of Pls.' Mot. for Partial Summ. J. ("Pls.' Mem.") at 1. The House classified its dancers as independent contractors, rather than employees, and, accordingly, did not pay them minimum wage. The plaintiffs argue that they were employees entitled to minimum wage under the federal Fair Labor Standards Act as well as the District of Columbia labor laws. The plaintiffs have moved for partial summary judgment on the issue of the defendants' liability. The defendants oppose that motion and have also moved to dismiss three of the plaintiffs on procedural grounds. For the reasons explained below, the Court grants the plaintiffs' motion for partial summary judgment and denies the defendants' motion to dismiss.
Plaintiff Quansa Thompson initially filed this action on October 13, 2009. Complaint, ECF No. 1. On behalf of herself and all others similarly situated, Plaintiff Thompson filed an amended complaint on November 9, 2009 naming the defendants Linda and A. Inc., trading as "The House," and Darrell Allen (collectively, the "defendants"). Amended Complaint ("Am. Compl.") ¶¶ 1-2. Defendant Allen is the President of The House and was Vice-President and a manager of The House during the period in which plaintiffs' claims arose. Pls.' Statement of Material Facts Not in Dispute ("SMF") ¶¶ 1-2; Pls. Mem., Ex. 9, Defs.' Resp. to Pls.' Interrog. No. 2. The House's corporate entity, Defendant Linda and A. Inc., was wholly owned by Darrell Allen's father, James Allen, who was President of The House until his death on June 3, 2009. Defs.' Resp. to Pls.' Interrog. No. 2. Defendant Allen advanced from Vice-President to President of The House shortly after his father's death. Id.
The Amended Complaint alleged that The House paid the plaintiff approximately $40 per ten-hour shift of exotic dancing, and that she regularly worked ten-hour shifts four nights a week. Am. Compl. ¶ 6. The Amended Complaint also alleged that the defendants took unexplained deductions from the plaintiff's wages, including late fees, fines for calling in sick, and stage fees. Id. ¶ 8. The plaintiff alleged that the defendants therefore violated the minimum wage provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 206(a)(1), the D.C. Minimum Wage Revision Act of 1992 ("DCMWA"), D.C. Code §§ 32-1001 et seq., and the D.C. Wage Payment and Wage Collection Law ("DCWPCL"), D.C. Code §§ 32-1301 et seq. Am. Compl. ¶¶ 11-22. Both defendants are alleged to be liable as "employers" under the FLSA, DCMWA, and DCWPCL. Id. ¶ 2. The plaintiff has also alleged a common law quantum meruit claim. Id. ¶¶23-27.
The defendants answered the Amended Complaint on November 27, 2009. ECF Nos. 3-4.
Plaintiff Thompson filed her suit on behalf of herself and other similarly situated employees pursuant to provisions of the FLSA that authorize similarly situated employees to litigate collectively. See 29 U.S.C. § 216(b). On May 6, 2010, this Court issued an Order directing the defendants to provide information that would facilitate the identification of other similarly situated plaintiffs. See Order, ECF No. 15 (Bates, J.). The Order attached an approved Notice and "Consent to Join Lawsuit" form that prospective plaintiffs were instructed to return by July 5, 2010. Id.
Thereafter, four additional plaintiffs filed consents to join the lawsuit: Lakisha Colberta/k/a "Shiver" on June 10, 2010; Eirene Lane a/k/a "Wild Cherry" on August 16, 2010; Jacemyein Morales a/k/a "Chyna" on September 1, 2010; and Tamika McKay a/k/a "Cherokee" on September 16, 2010. Thus, three of the additional plaintiffs filed their consents after the July 5, 2010 deadline set by the Court.
The parties in this case have conducted discovery, which closed on November 22, 2010. Before the Court are the plaintiffs' motion for partial summary judgment on the issue of the defendants' liability and the defendants' motion to dismiss plaintiffs Lane, Morales, and McKay for failure to file their consents to join the lawsuit in a timely fashion.
A.Defendants' Motion to Dismiss
The FLSA authorizes a plaintiff to sue on behalf of herself and any "other employees similarly situated." 29 U.S.C. § 216(b). This cause of action, known as a "collective action," is not subject to the numerosity, commonality, and typicality rules of a class action under Federal Rule of Civil Procedure 23. Hunter v. Sprint Corp., 346 F. Supp. 2d 113, 117 (D.D.C. 2004). "Instead, a collective action has only two threshold requirements: [T]he plaintiff must show that she is similarly situated to the other members of the proposed class, and those other members must 'opt in' to the proposed class." Id.; see also McKinney v. United Stor-All Centers, Inc., 585 F. Supp. 2d 6, 7-8 (D.D.C. 2008). "To determine whether a class should be certified under the FLSA, a court will usually proceed in two steps." Hunter, 346 F. Supp. 2d at 117. At the first step, plaintiffs must make a "modest factual showing sufficient to demonstrate that they and potential plaintiffs together were victims of a common policy or plan that violated the law." Id. (quotation omitted). If the plaintiff makes that showing, the class is "conditionally certified" and the members of the class are given notice of the collective action and an opportunity to "opt in" to the litigation. Id.; see also 29 U.S.C. § 216(b). The case then proceeds as a collective action through the discovery period. Hunter, 346 F. Supp. 2d at 117. "The second step of the analysis occurs at the close of discovery, when the defendant may move to decertify the class in light of the record that was developed during the discovery period." Id. At this point, the Court makes a factual finding as to whether the proposed class members are similarly situated. Id.
"For each plaintiff who opts in to the case after the filing of the complaint, the action is not considered commenced for purposes of the statute of limitations until the date on which the plaintiff's written consent is filed with the court." Robinson-Smith v. Gov't Emps. Ins. Co., 424 F. Supp. 2d 117, 119 (D.D.C. 2006) (citing 29 U.S.C. §§ 256, 255(a)). Under the FLSA statute of limitations, a plaintiff must sue within two years of when the action accrued or, in the case of a willful violation, within three years. Id. at 118-19(citing 29 U.S.C. §§ 216(b), 255).
The defendants have moved to dismiss plaintiffs Eirene Lane, Jacemyein Morales, and Tamika McKay "for failure to timely join in Quansa Thompson's Complaint in violation of the time standard set by this Court."*fn1 Defs.' Mot. to Dismiss at 1. As noted above, the Court's May 6, 2010 Order established a deadline of July 5, 2010 for plaintiffs to opt-in to this action, and plaintiffs Lane, Morales, and McKay filed their opt-in consents after that deadline. See id. The motion to dismiss states that "[t]he Defendant is severely prejudice [sic] in its ability to defend this matter, and to take advantage of the defense of the statute of limitations if the definitive date for joining the lawsuit is not enforced. Discovery is closed and the Court's Order is rendered meaningless if the three Plaintiffs are allowed to remain in the case." Id. at 2. The motion to dismiss also states that "[o]f equal significance to their failure to comply with the deadline is their participation as Plaintiffs in other litigation with identical claims raised in this litigation [sic]." Id. (citing Case Nos. 8:10-cv-02261 and 8:10-cv-02421 in the United States District Court for the District of Maryland and Case No. 10-cv-01591 in the United States District Court for the District of Columbia).
The Court has briefly reviewed the court filings in the other actions cited by the defendants and finds that those cases are not identical to this action.*fn2 Those cases involve similar claims by some of the plaintiffs here against different putative employers. The factual assertions the plaintiffs advanced in those actions could be relevant to their claims of liability and damages here if, for example, the plaintiffs claimed to be two or three places at the same time. That is not what the defendants allege here, however. The defendants point to no authority that would support their apparent position that plaintiffs cannot sue different defendants for violating the same laws. The fact that the plaintiffs have brought other, similar lawsuits is irrelevant to the defendants' motion to dismiss this action.
Defendants' suggestion that they will be prejudiced by permitting the late-filing plaintiffs to remain in the lawsuit because "[d]iscovery is closed" is also meritless. The defendants deposed all of the late-filing plaintiffs during discovery. See Pls.' Opp'n to Defs.' Mot. to Dismiss at 1-2. As the plaintiffs point out in their opposition, the defendants did not lodge any objection with the Court at the time that these plaintiffs filed their opt-in notices and instead waited until after discovery had closed to file a motion to dismiss. Id. Since the defendants not only had an opportunity to take discovery from these plaintiffs, but fully availed themselves of that opportunity, the defendants can hardly claim prejudice simply because discovery was closed at the time they filed their motion to dismiss.
The defendants' statute of limitations argument is also misplaced. The
FLSA statute of limitations is two years from when the action accrued
or, in the case of a willful violation, three years. 29 U.S.C. § 255.
The limitations period runs for each individual plaintiff until the
date on which that plaintiff's written consent is filed with the
court. See 29 U.S.C. § 256. The motion to dismiss asserts that "[t]he
Defendants are deprived of the Statute of Limitations retroactive to
the deadline for joining in the Complaint. If allowed to stand
Plaintiffs actions translate in substantial economic loses otherwise
avoided by the application of the statute of limitations [sic]." Id.
at 4. Defendants' argument appears to presume that some form of
tolling would apply to the statute of limitations for the plaintiffs'
claims, such that the late-filing plaintiffs would be deemed to have
joined this lawsuit prior to the actual dates on which they filed
their consents. This presumption is incorrect. While the filing of a
class action under Rule 23 tolls the applicable statute of limitations
for putative class members, Crown, Cork & Seal Co., Inc. v. Parker,
462 U.S. 345, 353-54 (1983), no such tolling rule applies to FLSA
collective actions and the plaintiffs have not requested any equitable
tolling. See McKnight v. D. Houston, Inc., No. H-
09-3345, 2010 WL 4806869, at *11 (S.D. Tex. 2010). The statute of
limitations period for each individual plaintiff would therefore run
until the actual date on which the plaintiff's written consent was
filed with this Court. 29 U.S.C. § 256; see also Robinson-Smith, 424
F. Supp. 2d at 119, 123-24 (denying plaintiffs' request for equitable
tolling but accepting late-filed FLSA opt-in consents as of the date
of filing with the Court). Accordingly, the defendants' ability "to
take advantage of the defense of the statute of limitations" would not
be prejudiced if the Court accepts the late-filed consents.*fn3
Defs.' Mot. to Dismiss at 2.
The Court finds that the untimely opt-in consents should be accepted as filed as of the date that they were submitted to the Court. "The FLSA provides for the opt in procedure, but does not specify when a person must opt in to a collective action." Robinson-Smith, 424 F. Supp. 2d at 123. Courts in this district have adopted a "flexible standard" as to the opt-in procedure. Id. In Robinson-Smith, the court permitted the untimely filing of opt-in consents where the opt-in deadline was "chosen by the Court in its discretion and [without constraint] by any considerations other than the practicalities of the case and setting an appropriate deadline so that discovery could proceed." Id. The circumstances here are similar. Moreover, the number of additional plaintiffs here is relatively small and permitting the untimely filing of the consents will not delay discovery, which has already closed and in which the late-filing plaintiffs fully participated. Therefore, the Court concludes that the continued inclusion of plaintiffs Lane, Morales, and McKay in this action is "consistent with the statute and is within the Court's discretion." Id.
The defendants' motion to dismiss is accordingly denied.
B.Plaintiffs' Motion for Partial Summary Judgment
1.Summary Judgment Standard
Pursuant to Federal Rule of Civil Procedure 56, the Court will grant a motion for summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law" based upon the pleadings, depositions, and affidavits and other factual materials in the record. Fed. R. Civ. P. 56(a), (c); Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994). The Court "need consider only the cited materials, but it may consider other materials in the record." Fed. R. Civ. P. 56(c)(3). The Court must view all inferences in a light most favorable to the non-moving party. Tao, 27 F.3d at 638 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 255 (1986)). The burden is on the moving party to demonstrate that there is an "absence of a genuine issue of material fact" in dispute. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
In this case, the defendants broadly assert that there are disputed issues of material fact that preclude entry of partial summary judgment for the plaintiffs. See Defs.' Opp'n to Pls.' Mot. for Partial Summ. J. ("Defs.' Mem.") at 2. In asserting the existence of disputed issues of fact, however, the defendants' opposition to the plaintiffs' motion for summary judgment generally fails to comply with the standards set forth in Federal Rule of Civil Procedure 56. Under Rule 56(c), a "party asserting that a fact . . . is genuinely disputed must support the assertion by citing to particular parts of materials in the record, including depositions, documents, . . . affidavits or declarations . . . or other materials . . . or [by] showing that the materials cited [by the moving party] do not establish the absence . . . of a genuine dispute . . . ." Fed. R. Civ. P. 56(c)(1).
In responding to the plaintiffs' Statement of Material Facts Not in Dispute, which is quite brief, the defendants have merely replied to each paragraph with a simple, one-word response of "Admitted" or "Denied." See Defs.' Mem. at 2. The defendants' bald denials of the plaintiffs' assertions are insufficient to establish a dispute of fact under Rule 56, which requires the defendants to cite conflicting parts of the record or otherwise demonstrate that the parts of the record relied upon by the plaintiffs do not establish the absence of a genuine dispute. Fed. R. Civ. P. 56(c); see also Local Civil Rule LCvR 7(h)(1) ("An opposition to [a summary judgment motion] shall be accompanied by a separate concise statement of genuine issues setting forth all material facts as to which it is contended there exists a genuine issue necessary to be litigated, which shall include references to the parts of the record relied on to support the statement."). The defendants also have not submitted any affidavits, deposition testimony, or any other factual record materials to the Court for consideration. Under Rule 56(e), if "a party . . . fails to properly address another party's assertion of fact as required by Rule 56(c), the court may (1) give an opportunity to properly support or address the fact; (2) consider the fact undisputed for purposes of the motion . . . [or] issue any other appropriate order." Fed. R. Civ. P. 56(e). Since the plaintiffs' reply memorandum, which was filed three months ago, identified the aforementioned deficiencies in the defendants' opposition, and the defendants have not moved to supplement their filings, the Court will treat all of the factual assertions in the plaintiffs' Statement of Material Facts Not in Dispute as undisputed.*fn4 See Pls.' Reply to Defs.' Mem. in Opp'n to Pls.' Mot. for Partial Summ. J. at 1-2.
The FLSA requires every "employer" to pay "each of his employees" a minimum wage.
29 U.S.C. § 206(a). The amount of the minimum wage under the FLSA has ranged from $5.85 to $7.25 for the time period between July 24, 2007 and the present. Id.
The DCMWA sets the District of Columbia minimum wage to an amount equal to the federal minimum wage plus one dollar. D.C. Code § 32-1003. The DCWPCL establishes requirements for the payment of earned wages. See D.C. Code § 32-1301 et seq. With respect to employers' liability, these District of Columbia statutes are construed consistently with the FLSA. See Ventura v. Bebo Foods, Inc., 738 F. Supp. 2d 1, 5 n.2 (D.D.C. 2010); Del Villar v. Flynn Architectural Finishes, 664 F. Supp. 2d 94, 96 (D.D.C. 2009); see also D.C. Code § 32-1002 (defining employ, employer, and employee). Accordingly, determinations of employer or employee status under the FLSA apply equally under the District of Columbia wage laws.
As noted above, the plaintiffs brought this action as a collective action under the FLSA. After discovery concludes in such an action, the Court must make a factual finding as to whether the proposed class members are similarly situated. Hunter, 346 F. Supp. 2d at 117. Here, the defendants have not challenged the plaintiffs' similarly situated status, and, based on the record evidence, the Court finds that the plaintiffs are similarly situated because they (1) worked in the same department, division, and location of the employer, (2) they all advance similar claims, and (3) they seek substantially the same form of relief. See id. at 119.
3.Plaintiffs' Arguments for Partial Summary Judgment
Plaintiffs move for summary judgment on three issues. The plaintiffs seek a judgment that (1) they were "employees" subject to the FLSA and not independent contractors; (2) that the defendants, including Defendant Allen, were the plaintiffs' "employers" under the FLSA; and (3) that they are entitled to liquidated damages. The Court will address these three issues in turn.
a.The Plaintiffs' Status as Employees or Independent Contractors
The FLSA defines "employee" as "any individual employed by an employer." To "employ" includes "to suffer or permit to work." 29 U.S.C. §§ 203(e)(1), 203(g). The definition is necessarily a broad one in accordance with the remedial purpose of the statute. Morrison v. Int'l Programs Consortium, Inc., 253 F.3d 5, 10 (D.C. Cir. 2001). To determine an individual's employment status under the FLSA, courts apply an "economic reality" test that considers various factors, such as: "(1) the degree of control exercised by the employer over the workers, (2) the workers' opportunity for profit or loss and their investment in the business, (3) the degree of skill and independent initiative required to perform the work, (4) the permanence or duration of the working relationship and (5) the extent to which the work is an integral part of the employer's business." Morrison, 253 F.3d at 11. "No one factor standing alone is dispositive and courts are directed to look at the totality of the circumstances and consider any relevant evidence." Id. "[T]he final and determinative question must be whether the total[ity] of the [circumstances considered] establishes the personnel are so dependent upon the business with which they are connected that they come within the protection of the FLSA or are sufficiently independent to lie outside its ambit." Id. (quoting Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1311-12 (5th Cir. 1976)).
The determination of "employee" status under the FLSA is a question of law, although it depends on subsidiary factual determinations. Id. at 10 n.3. Employee status can be determined by the district court on a motion for summary judgment where there are no genuine disputes of material fact. See Estate of Suskovich v. Anthem Health Plans of Va., Inc., 553 F.3d 559, 566-70 (7th Cir. 2009) (upholding district court's summary judgment determination that worker was independent contractor); Hopkins v. Cornerstone America, 545 F.3d 338, 343-46 (5th Cir. 2008) (upholding district court's summary judgment determination that workers were employees).
Several other federal courts that have been presented with the question of whether exotic dancers are employees under the FLSA or independent contractors have found the dancers to be employees. See, e.g., Reich v. Circle C. Invs., Inc., 998 F.2d 324 (5th Cir. 1993) (upholding district court's determination that exotic dancers were "employees" under FLSA following bench trial); Morse v. Mer Corp., No. 1:08-cv-1389, 2010 WL 2346334 (S.D. Ind. 2010) (granting summary judgment that exotic dancers were "employees" under FLSA); Reich v. Priba Corp., 890 F. Supp. 586 (N.D. Tex. 1995) (finding exotic dancers to be "employees" under FLSA).
The Court will assess the relevant "economic reality" factors identified in Morrison based on the undisputed facts here to determine if plaintiffs are entitled to summary judgment on their employee status.
The plaintiffs contend that the defendants exercised substantial control over the plaintiffs' employment at The House. See Pls. Mem. at 7. The record reflects that The House paid each dancer a fee of $30.00 to $50.00 per shift, depending on which shift she worked. SMF ¶ 9; Def.'s Resp. to Pls.' Interrog. No. 6. The plaintiffs were required to "sign in" to a book when they arrived to work. SMF ¶ 11. During a shift, The House required the dancers to perform "for 'thirty minutes on' and 'thirty minutes off.'" Id. ¶ 5.; see also Pls.' Mem., Ex. 1, Deposition of Darrell Allen ("Allen Dep.") at 36:5-21. The plaintiffs were required to follow a schedule posted by the House that established which days they were required to work for the week. SMF ¶ 12. The House also enforced certain rules, such as "[n]o cussing, fighting, biting, scratching, or drugs." Id. ¶ 6; Allen Dep. at 49:6-8. Other rules related more directly to the plaintiffs' dancing, such as a ban against "fondling yourself on the stage." Allen Dep. at 51:6-7. Some violations of The House's rules were punished with monetary fines, although Allen testified that fines were not always enforced. SMF ¶ 6; Allen Dep.at 52:14-16.
The defendants assert that the level of control they exercised over the plaintiffs is a fact question for trial, but they do not point to any record evidence contradicting the facts noted above or otherwise indicate any additional facts that would bear on this issue. Defs.' Mem.at 3-4. The defendants contend that The House "controlled how the performers danced to the extent of the government requirements of the District of Columbia," id. at 4, but it is apparent from the facts discussed above that the defendants exercised control over the plaintiffs' work that went far beyond merely assuring compliance with the law.
Viewing the evidence in the light most favorable to the defendants, the Court concludes that the The House exercised a significant degree of control over the plaintiffs' work. Accordingly, this factor weighs in favor of plaintiffs' employee status.
ii.Opportunity for Profit or Loss and Investment in the Business
The House earned gross income of more than $500,000 per year. SMF ¶ 8. Linda and A. Inc., the corporate entity that owns and operates the business, is wholly owned by the estate of James Allen, Darrell Allen's father, and the plaintiffs accordingly did not have any investment or stake in the company. See Allen Dep. at 5:13-19. In addition, The House appears to have completely managed all elements of the business besides the plaintiffs' dancing. For example, The House and its managers determined cover charges, oversaw the club and made sure "everything [was] running productively," provided the music and the bartenders, and directed the other aspects of the enterprise. See Allen Dep. at 20:20-21:7; 19:12-21; 64:18-65:8. The plaintiffs' earnings came only from their pay plus tips. See SMF ¶ 9; Pls.' Mem., Ex. 7, Deposition of Quansa Leshelle Thompson ("Thompson Dep.") at 65:1-6.
Defendants contend that, in considering the opportunity for profit or loss in the business factor, it is significant that "the Plaintiffs received substantial tip income from the customers." Defs.' Mem. at 4. According to the defendants, "[t]he dancer earns, through her tips, based upon the economic response of the customers." Id. at 6. This argument -- that the ability to earn tips suggests that a worker has an opportunity for profit or loss in the business consistent with independent contractor status -- has been routinely rejected by courts in other FLSA cases involving exotic dancers.*fn5
The ability of an exotic dancer to entice her customers to give large tips is known in the industry as "hustling." See Harrell v. Diamond A Entm't, Inc., 992 F. Supp. 1343, 1350-52 (M.D. Fla. 1997). Courts have rejected the relevance of the "hustling" argument to the opportunity for profit or loss factor of the economic reality test, finding that the appropriate inquiry "has more to do with relative investments, with control over larger aspects of the business, and with like forms of initiative." Id. As the Fifth Circuit explained in Reich v. Circle C. Investments, Inc., "once customers arrive at [the club], a dancer's initiative, hustle, and costume significantly contribute to the amount of her tips.
But [the club's owner] has a significant role in drawing customers to its nightclub. . . . [The owner] is responsible for advertisement, location, business hours, maintenance of facilities, aesthetics, and inventory of beverages and food." 998 F.2d at 328 (concluding that the dancers "are far more closely akin to wage earners toiling for a living, than to independent entrepreneurs seeking a return on their risky capital investments.") (internal quotation marks omitted). As the court in Harrell put it, "That a dancer may increase her earnings by increased 'hustling' matters little. As is the case with the zealous waiter at a fancy, four-star restaurant, a dancer's stake, her take and the control she exercises over each of these are limited by the bounds of good service; ultimately, it is the restaurant that takes the risks and reaps the returns." Harrell, 992 F. Supp. at 1352; see also Morse, 2010 WL 2346334, at *4 (finding opportunity-for-profit factor weighed in favor of exotic dancers' employee status).
After considering the undisputed facts here, the Court finds that the opportunity for profit or loss factor weighs in favor of employee status.
iii.Degree of Skill and Independent Initiative Required
Many other courts have previously found that little specialized skill is required to be a nude dancer. See, e.g., Morse, 2010 WL 2346334, at *5; Harrell, 992 F. Supp. at 1351; Circle C Invs., 998 F.2d at 328. Defendants contend that "[a]rtistic performers in adult night clubs are measured by the response of the patrons to their act" and that they will "demonstrate at trial that artistic ability and the poise to convey to the audience a fantasy circumstance is not easy to replicate [sic]." Defs.' Mem. at 6-7. While the Court does not rule out the possibility of the rare case involving a form of nude dancing that reaches the level of high art, requiring extensive skill, training, and expertise, the defendants' argument barely merits consideration here because nothing in the record indicates that "artistic ability" had anything to do with eligibility to dance at The House. At his deposition, Defendant Allen succinctly explained the relevant qualifications for performing at The House:
A. Well, in order to perform there, she would have to audition.
Q. And what --
A. To see if she qualifies.
Q. Okay. And what makes her qualified or not?
Q. Okay. So someone has to be good-looking to work for you?
A. Most definitely.
Allen Dep. at 29:13-30:1.
Viewing the record evidence in the light most favorable to the defendants, the Court concludes that the lack of specialized skills required for the job weighs in favor of the plaintiffs' employee status.
iv.Permanence or Duration of the Working Relationship
The more permanent the relationship, the more likely it is that a court will find a worker to be an employee. Plaintiff Lane testified that she danced at The House "on and off" during a period of approximately 12 years. Pls.' Mem., Ex. 5, Deposition of Eirene Lane ("Lane Dep.") at 25:1-21. Plaintiff Thompson testified that she danced at The House for five years. Thompson Dep. at 12:11-13:3. Plaintiff McKay testified that she danced at The House from mid-October of 2007 until mid-February of 2008. Pls.' Mem., Ex. 6, Deposition of Tamika Nicole McKay ("McKay Dep.") at 19:10-15. Plaintiff Morales testified that she danced at The House for approximately six months during 2008. Pls.' Mem., Ex. 4, Deposition of Jacemyein Elaina Morales ("Morales Dep.") at 19:3-19. Plaintiff Colbert testified that she danced at The House from 2001 through 2008, although she did not recall exact dates. Pls.' Mem., Ex. 8, Deposition of Lakisha Denene Colbert ("Colbert Dep.") at 15:4-15.
This record is mixed with respect to the permanence of the dancers' relationships with The House. Accordingly, viewing the evidence in the light most favorable to the defendants, this factor tips against employee status, but this single factor is certainly not dispositive. Many of the courts that have found exotic dancers to be employees under the FLSA did so despite finding the employment relationship lacked a high degree of permanence. See Circle C Invs., 998 F.2d at 328-29 ("The transient nature of the work force is not enough here to remove the dancers from the protections of the FLSA."); see also Morse,2010 WL 2346334, at *5.
v.Integral Part of the Employer's Business
The House is a nightclub that features nude exotic dancers. SMF ¶ 7. The defendants understandably do not challenge the self-evident conclusion that nude dancers formed an integral part of The House's business. See Defs.' Mem. at 7-8. Defendant Allen confirmed the obvious at his deposition:
Q. Okay. But this is -- you do operate a strip club, correct?
A. That is correct.
Q. So that is the main feature --
A. Yes, ma'am.
Q. -- are these girls?
A. Yes, ma'am.
Allen Dep. at 73:2-8
Instead, the defendants attempt to argue that while nude dancing was an integral part of their business, none of the plaintiffs individually formed an integral part of the business: "The patrons came to the business to see adult entertainment and, although possible, did not come to see specific individuals. . . .What was integral to the business was the type of entertainment not the individual entertainers." Defs.' Mem. at 8. The Court's inquiry, however, focuses on "the extent to which the work is an integral part of the employer's business," not on the role of the employee individually. Morrison, 253 F.3d at 11 (emphasis added). Courts consider this factor because independent contractor relationships often involve work that is not integral to the business -- for example, if a pipe bursts in the nightclub and the club hires a plumber to fix it, the plumber would typically be an independent contractor. Here, the defendants admit that the plaintiffs' work was integral to their business and their argument only serves to underscore their perception that the plaintiffs were interchangeable workers whose labor provided the business's key service.
Accordingly, this factor weighs in favor of employee status.
vi.Consideration of All Factors
Viewing the evidence in the light most favorable to the defendants, the Morrison factors indicate that the plaintiffs are employees as a matter of law. The only factor that does not clearly weigh in favor of employee status is the permanence or duration of the working relationship, and other federal courts have found exotic dancers to be employees under the FLSA despite the typically impermanent or transient nature of the work force in this industry. See, e.g., Circle C Invs., 998 F.2d at 328-29; Morse,2010 WL 2346334, at *5. The D.C. Circuit has instructed that "the final and determinative question must be whether the total[ity] of the [circumstances considered] establishes the personnel are so dependent upon the business with which they are connected that they come within the protection of the FLSA or are sufficiently independent to lie outside its ambit." Morrison, 253 F.3d at 11 (quotation omitted). Here, "the economic reality is that the dancers are not in business for themselves but are dependent upon finding employment in the business of others." Circle C Invs., 998 F.2d at 329. As such, they are employees within the meaning of the FLSA and the District of Columbia labor laws and are entitled to minimum wage.
b.Defendant Allen's Status as an Employer
The next question for the Court is whether both defendants were the plaintiffs' "employers" under the FLSA and the District of Columbia labor laws. Given the Court's finding that the plaintiffs were employees and not independent contractors, it appears undisputed that Linda and A. Inc. was the plaintiffs' employer. See Pls.' Mem. at 15; Defs.' Mem. at 8. The defendants argue, however, that Defendant Allen was not also an "employer" under the relevant laws. Defs.' Mem. at 8.
To be liable for violations of the FLSA, the defendant must be an "employer." 29 U.S.C. § 206. The FLSA defines "employer" to include "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d). As with the definition of "employee," this definition is broadly construed to serve the remedial purposes of the FLSA and courts apply an "economic reality" test to determine whether a defendant is an employer. See Morrison, 253 F.3d at 10; Ventura v. Bebo Foods, Inc., 738 F. Supp. 2d 1, 5 (D.D.C. 2010).
"In applying the economic reality test, the Court considers 'the totality of the circumstances of the relationship between the plaintiff/employee and defendant/employer to determine whether the putative employer has the power to hire and fire, supervise and control work schedules or conditions of employment, determine rate and method of pay, and maintain employment records.'" Ventura, 738 F. Supp. 2d at 5 (quoting Del Villar v. Flynn Architectural Finishes, 664 F. Supp. 2d 94, 96 (D.D.C. 2009)). This test may show that more than one "employer" is liable for violations of the FLSA. Ventura, 738 F. Supp. 2d at 5.
Here, it is undisputed that Allen is President of The House. SMF ¶ 1. During the time period in which the plaintiffs' claims arose, he was Vice-President and a manager. Id. ¶ 2.; Defs.' Resp. to Pls.' Interrog. No. 2. Defendant Allen supervised the plaintiffs, had control over hiring and firing, and enforced club rules governing the plaintiffs' conduct, including by imposing monetary fines. SMF ¶¶ 3-6; Allen Dep. at 39:10-12. All of the plaintiffs auditioned for Defendant Allen in order to be hired by The House. SMF ¶ 10.
In opposing the plaintiffs' request for summary judgment as to Defendant Allen's employer status, the defendants do not provide or cite to any particular evidence in the record that would contradict the facts cited above.*fn6 The defendants simply argue that summary judgment is inappropriate because James Allen, Defendant Allen's late father, was the sole shareholder and "sole individual who directed the operation" of Linda and A. Inc., the corporate entity that operates The House. Defs.' Mem. at 8. A legal interest in the corporate entity, however, is not a prerequisite for employer status under the FLSA. The FLSA's definition of employer is broad enough to "encompass an individual who, though lacking a possessory interest in the 'employer' corporation, effectively dominates its administration or otherwise acts, or has the power to act, on behalf of the corporation vis-a-vis its employees." Circle C Invs., Inc., 998 F.2d at 329 (citation omitted). Moreover, while James Allen's estate remains the shareholder in the corporate entity, Defendant Allen is a beneficiary of the estate and he advanced from Vice-President of the corporation to President shortly following James Allen's death.*fn7 Allen Dep. at 6:10-7:2; Defs.' Resp. to Pls.' Interrog. No. 2.
The undisputed facts here indicate that Defendant Allen was at all times a senior corporate officer and manager who exercised a high degree of operational control over the circumstances of the plaintiffs' employment, including supervising and hiring the plaintiffs. Taken together, the undisputed facts indicate that Allen was the plaintiffs' employer under the economic reality test. The fact that Allen did not have an ownership interest in the "employer" corporation, which was owned by his father, is insufficient in these circumstances to remove him from the scope of the FLSA's definition of an employer, which includes "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d); see also Olivas v. A Little Havana Check Cash, Inc., 324 Fed. App'x.839 (11th Cir. 2009) ("[T]o be personally liable as an 'employer,' a corporate officer must either be involved in the day-to-day operation or have some direct responsibility for the supervision of the employee.") (citation and internal quotation marks omitted); Ventura, 738 F. Supp. 2d at 5-6 (granting summary judgment on plaintiffs' claim that restaurateur was employer under the FLSA).
Accordingly, the plaintiffs' motion for partial summary judgment is granted with respect to Defendant Allen's joint employer status. As the plaintiffs' employers, both Allen and The House are liable for violations of the FLSA and the District of Columbia wage laws.
The plaintiffs have also moved for summary judgment on the availability of liquidated damages under the FLSA.
An employer who violates the FLSA minimum wage provisions is ordinarily "liable to the employee or employees affected in the amount of their unpaid minimum wages . . . and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). This award of liquidated damages is mandatory unless "the employer shows to the satisfaction of the court that the act or omission giving rise [to the FLSA action] was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA]." 29 U.S.C. § 260. This good faith defense to liquidated damages requires "an affirmative showing of a genuine attempt to ascertain what the law requires," not simply the absence of bad faith. Danesh v. Rite Aid Corp., 39 F. Supp. 2d 7, 13 (D.D.C. 1999) (citation omitted).
Here, it is undisputed that The House did not pay the plaintiffs minimum wage. See SMF ¶ 9 (establishing that The House paid the plaintiffs $30.00-$50.00 per shift, with shifts lasting 10.5 or 11 hours, during a period in which the minimum wage ranged from $5.85 to $7.25 per hour).*fn8
According to the plaintiffs, the defendants "can point to no authority or good faith basis that they relied upon to determine how they paid their dancers." Pls.' Mem. at 22. When asked why The House paid their dancers the way they did, Defendant Allen simply answered that the payment system was determined by James Allen and Defendant Allen went along with the "program." See id.; Allen Dep. at 40:21-41:10. This perfunctory response is plainly insufficient to satisfy the elements of the defense to liquidated damages in 29 U.S.C. § 260.
The defendants respond that the record is "insufficiently developed" for the Court to reach any conclusion on liquidated damages, but the defendants do not explain what additional factual information would bear on this question. They do not point to any pertinent facts in the record, attach any affidavits, or identify evidence to be developed at trial that could establish the required showing. Even their memorandum of law does not propose any good faith basis for their violations. See Defs.' Mem. at 9. The court therefore finds that the defendants have failed to show that they had reasonable grounds for believing that their wage policy was not a violation of the FLSA. See Danesh, 39 F. Supp. 2d at 13 (granting summary judgment awarding liquidated damages under the FLSA).
For the reasons stated above, the plaintiffs' motion for partial summary judgment is granted. Viewing the undisputed facts in the light most favorable to the defendants, the Court finds that, as a matter of law, the plaintiffs were the defendants' "employees" under the FLSA, DCMWA, and DCWCPL; both defendants were "employers" under the FLSA, DCMWA, and DCWCPL; and the plaintiffs are entitled to liquidated damages under the FLSA.
Within twenty days of the issuance of this memorandum opinion and the accompanying order, the parties shall file a joint status report proposing a mechanism and schedule for resolving the remaining issues in this case -- namely, the question of damages. After receiving the parties' joint report, the Court will schedule a status conference if necessary.
Beryl A. Howell