United States District Court, W.D. Arkansas, Hot Springs Division
DEANNA MILLER, individually and on behalf of all others similarly situated PLAINTIFF
CENTERFOLD ENTERTAINMENT CLUB, INC.; and JESSIE ORRELL, individually and as officer and/or director of Centerfold Entertainment Club DEFENDANTS
OPINION AND ORDER
HOLMES, III CHIEF U.S. DISTRICT JUDGE
17, 2017, the Court held a bench trial in this action and
took the matter under advisement. The Court heard testimony
from Defendant Jessie Orrell, opt-in Plaintiff Michelle
Johnson, opt-in Plaintiff Kristina Garton, Plaintiff Deanna
Miller (collectively, “Plaintiffs”), and Diana
Several exhibits were also received into evidence. After
carefully considering the evidence at trial and the legal
arguments made, and based upon observation of the witnesses
and an opportunity to weigh their credibility, the Court now
makes its findings of fact and conclusions of law pursuant to
Rule 52(a) of the Federal Rules of Civil Procedure. For the
reasons set forth below, the Court concludes that Plaintiffs
were employees entitled to coverage under the Fair Labor
Standards Act (“FLSA”), that Defendants violated
the FLSA by not paying Plaintiffs a minimum wage, and that
Plaintiffs are entitled to damages.
case was originally filed on June 4, 2014 by Tamatrica
Bonton. The complaint alleged that while Ms. Bonton and
others performed as exotic dancers for Defendants, they were
not paid a minimum wage or overtime compensation in violation
of the FLSA, 29 U.S.C. § 201, et. seq., and the Arkansas
Minimum Wage Act (“AMWA”), Ark. Code Ann. §
11-4-201, et. seq. Ms. Miller filed notice of her consent to
join on the next day. (Doc. 5). On October 9, 2014, the
Courtgranted conditional collective action
certification of the FLSA class under 29 U.S.C. § 216(b)
so that notice could be disseminated to potential plaintiffs.
(Doc. 12). An amended complaint was then filed on November
20, 2014, adding Ms. Miller as a named Plaintiff with her own
individual claims under the FLSA and AMWA. (Doc. 17). On May
19, 2015, the Court granted Rule 23 class certification on
the AMWA claim. (Doc. 37). On September 17, 2015, the Court
granted attorneys Josh Sanford and Josh West's motion
(Doc. 44) to withdraw as counsel for Ms. Bonton, and the
Court subsequently terminated Ms. Bonton's individual
claims and converted her to an opt-in Plaintiff after it
became apparent that she was no longer interested in pursuing
her claims as a class representative. (Doc. 57). Ms. Garton
and Ms. Johnson filed notices of their consent to join the
collective action on December 15, 2015. (Docs. 51, 52). On
December 28, 2015, the case was reassigned to the
undersigned. The Court sua sponte decertified the Rule 23
class action on March 10, 2017 (Doc. 64). On July 17, 2017, a
bench trial was held. The Court heard evidence at trial for
Ms. Miller, Ms. Garton, and Ms. Johnson. Because
Plaintiffs' counsel has withdrawn from representing Ms.
Bonton, and she did not appear at trial to pursue her claims,
Ms. Bonton's claims will be dismissed without prejudice
as to their refiling.
Findings of Fact
Orrell is the owner and sole shareholder of Centerfold
Entertainment Club, Inc. (the “Club”). Defendants
obtained and maintained a permit to operate the Club as a
sexually-oriented business. The Club is located in Hot
Springs, Arkansas and provides adult entertainment in the
form of exotic dancers. Defendants also hired managers,
waitresses, and doormen. Ms. Miller, Ms. Garton, and Ms.
Johnson performed as exotic dancers at the Club. Ms. Miller
performed at the Club as an exotic dancer from June 2011
until November 2012, except for approximately two months
during her pregnancy. Ms. Garton performed at the Club as an
exotic dancer from August 2011 until July 2014, when she was
fired for dancing at a private party. Ms. Johnson performed
at the Club as an exotic dancer from 2006 until June 2014.
She also worked at the Club as an assistant manager for
approximately four months during that period.
of their job at the Club, Plaintiffs would perform dances on
stage pursuant to a stage rotation, give personal dances to
patrons called “lap dances, ” and spend time with
patrons who purchased the dancer a “lady's
drink.” Defendants had a stage rotation policy of
requiring dancers to perform their stage dances for two
songs. Defendants set a policy that lap dances would cost $20
for one dance and $50 for three dances, and that ladies'
drinks would cost $20. Defendants required the dancers to pay
the disc jockey (“DJ”) ten percent of what the
dancers made during stage dances. For lap dances and
ladies' drinks, Defendants required the dancers to evenly
split proceeds with the Club. Dancers were not allowed to
handle any money other than their tips. Plaintiffs did not
receive any wages or other form of compensation from the Club
for their work there.
Plaintiffs performed stage dances, they would request certain
songs from the DJ who would play those songs through a
computer if they were available. When the Club had Internet
connection, the DJ would play songs through YouTube. When
Internet was unavailable, music would be chosen by the DJ
from a play list, potentially streamed via iTunes or through
a computer hard drive. Defendants did not allow dancers to
select rap music for their stage dances.
were subject to numerous fines if they did not comply with
policies set by Defendants. Dancers would be fined for
arriving late or leaving a shift early. Dancers were required
to wear shoes on stage, although Mr. Orrell would make
exceptions to this rule. Defendants maintained a store at the
Club from which dancers could purchase costumes or shoes,
though dancers could also purchase costumes elsewhere. While
on stage, dancers were not allowed to go over the stage.
Dancers were not allowed to go outside in their costume.
Dancers could not leave the Club with a customer, and they
were forbidden from dancing at other clubs or private
parties. The penalty for being caught outside with a customer
was a $500 fine. The penalty for dancing at another club or a
private party was either termination or up to a $500 fine.
about the Club's facilities, interior décor and
design, budget, and policies, all were made by Defendants.
Some dancers advertised their services over social media, but
Defendants controlled all of the Club's advertising,
including maintaining the Club's Facebook page and online
job announcements. Ms. Johnson would send text messages to
regular customers to let them know when she was working at
the Club's managers were personally hired and supervised
by Mr. Orrell. He also maintained his own table at the Club.
While he previously supervised at the Club four to six nights
a week, the frequency of his visits declined due to health
concerns. As a result of his health deteriorating, Mr. Orrell
went to the Club approximately once every three weeks.
Nevertheless, Mr. Orrell installed live video surveillance at
the Club so that he could supervise Club activities while at
were required to work a minimum of four days a week unless
they had another job, in which case they were allowed to work
a minimum of three days a week. The Club was generally open
Monday through Saturday every week. Despite their
record-keeping obligations, Defendants have no records as to
the tenure, hours worked, or the amount of money in tips
collected by Plaintiffs during their time at the Club.
Court must first determine whether there is FLSA coverage in
the instant matter. The FLSA mandates that every employer pay
each of his or her employees a minimum wage and overtime
compensation for any workweek that the employees are (1)
“engaged in commerce or in the production of goods for
commerce” (individual coverage) or (2) “employed
in an enterprise engaged in commerce or in the production of
goods for commerce” (enterprise coverage). 29 U.S.C.
§§ 206(a), 207(a). Plaintiffs do not contend that
enterprise coverage exists, but claim that individual
coverage exists for each of them.
individual coverage, “[t]he burden of proof lies on
employees to establish that they were engaged in interstate
commerce, or in the production of goods, and that such
production was for interstate commerce.” Joseph v.
Nichell's Caribbean Cuisine, Inc., 862 F.Supp.2d
1309, 1312 (S.D. Fla. 2012) (citations omitted). As evidence
of individual coverage, Plaintiffs stated that they performed
dances for customers who visited from outside the state of
Arkansas, danced on furniture from outside the state,
regularly handled beverages that came from outside the state,
danced to music that originated from out of state, and wore
costumes and stilettos that came from outside the state. The
test “is not whether the employee's activities
affect or indirectly relate to interstate commerce but
whether they are actually in or so closely related to the
movement of the commerce as to be a part of it.”
McLeod v. Threlkeld, 319 U.S. 491, 497 (1943).
Plaintiffs' proffered activities are not closely enough
related to interstate commerce for purposes of individual
coverage. See McLeod, 319 U.S. 491 at 494
(“[H]andlers of goods for a wholesaler who moves them
interstate on order or to meet the needs of specified
customers are in commerce, while those employees who handle
goods after acquisition by a merchant for general local
disposition are not.”); Joseph, 862 F.Supp.2d
at 1314 (“whether the customers Plaintiff served at
Defendant's restaurant were local or from out-of-state is
immaterial to establishing individual FLSA coverage).
testimony elicited at trial confirms that individual coverage
exists. Plaintiffs were required to regularly use the
Internet to perform their dances. Individual coverage exists
for dancers who “regularly use the instrumentalities of
interstate commerce in [their] work.” Thorne v. All
Restoration Servs., 448 F.3d 1264, 1266 (11th Cir.
2006). Furthermore, “[i]t is well-settled that
‘[t]he internet is an instrumentality of interstate
commerce.'” Foster v. Gold & Silver Private
Club, Inc., 2015 WL 8489998, at *6 (W.D. Va. Dec. 9,
2015) (citing United States v. Hornaday, 392 F.3d
1306, 1311 (11th Cir. 2004); AvePoint Inc. v. Power
Tools, Inc., 981 F.Supp.2d 496, 512 (W.D. Va. 2013).
When Plaintiffs performed stage dances, they would request
songs from the DJ who would often stream the music over the
Internet via YouTube. Whether on stage or providing a private
dance, dancers are hired by the Club to dance, and music is
an indispensable part of a dancer's work. The music
regularly streamed over the Internet while Plaintiffs
performed at the Club, and their use of an instrumentality of
interstate commerce is sufficient for individual coverage for
each of the Plaintiffs in this action.
additional basis for individual coverage, Ms. Johnson
regularly texted her clientele to let them know when she
would be performing at the Club. Individuals whose work
involves the continued use of the interstate mails,
telegraph, telephone or similar instrumentalities for
communication across state lines are covered by the FLSA. 29
C.F.R. § 776.10(b); Schmidt v. Peoples Tel. Union of
Maryville, Mo., 138 F.2d 13, 15 (8th Cir. 1943).
Testimony at trial also confirmed that some of the dancers
advertised their services on social media. While it is not
clear whether Ms. Garton engaged in this activity,
Johnson also qualifies for individual coverage based on her
use of a telephone to advertise her work at the Club.
Plaintiffs' Employment Status
found that FLSA coverage exists, the Court next considers
whether Plaintiffs were employees of the Club. The FLSA
defines an employee as “any individual employed by an
employer, ” and states that “employ”
includes “to suffer or permit to work.” 29 U.S.C.
§ 203(e)(1), (g). The Supreme Court has interpreted
“employ” under the FLSA to be defined with
“striking breadth.” Nationwide Mut. Ins. Co.
v. Darden, 503 U.S. 318, 326 (1992); see also
Hodgson v. Taylor, 439 F.2d 288, 290 (8th Cir. 1971)
(“The definition of employee under the Act is very
broad and comprehensive.”). The Eleventh Circuit has
described the statute's definition of an employee as the
“the broadest definition [of employee] that has ever
been included in any one act.” Antenor v. D & S
Farms, 88 F.3d 925, 929 n.5 (11th Cir. 1996).
typically employ the economic realities test to determine
whether an individual is an employee under the FLSA. See,
e.g., Whitworth v. French Quarter Partners, LLC, 2014 WL
12594213, at *3 (W.D. Ark. June 30, 2014). “In
determining whether an entity functions as an
individual's employer, courts generally look to the
economic reality of the arrangement.” Blair v.
Wills, 420 F.3d 823, 829 (8th Cir.2005) (citing
Goldberg v. Whitaker, 366 U.S. 28, 33 (1961)
(“[T]he ‘economic reality' rather than
‘technical concepts' is to be the test of
employment”)). Under this test, the Court looks
“to the ‘economic reality' of all of the
circumstances concerning whether the putative employee is
economically dependent upon the alleged employer.”
Whitworth, 2014 WL 12594213, at *3. Factors the
Court will consider are: (i) the degree of control exercised
by the Club over the business operations, (ii) the relative
investments of the Club and dancers, (iii) the degree to
which the dancers' opportunity for profit and loss is
determined by the Club, (iv) the skill and initiative
required by the dancers in performing the job, (v) the
permanency of the work relationship, and (vi) the extent to
which the work performed by the dancers is an integral part
of the Club's business. See, e.g., Harrell v. Diamond
A Entm't, Inc., 992 F.Supp. 1343, 1348 (M.D. Fla.
1997); 51 A.L.R. Fed. 702, § 2.5 (collecting cases).
“[T]he final and determinative question must be whether
the total of the testing 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.”
Usery v. Pilgrim Equip. Co., 527 F.2d 1308, 1311-12
(5th Cir. 1976). If, after applying the six factors and
viewing them in their totality, Plaintiffs have “shown
that there is no doubt as to the relationship between the
parties, the court may determine as a matter of law that the
worker is an employee or independent contractor.”
McFeeley v. Jackson St. Entm't, LLC, 47
F.Supp.3d 260, 268 (D. Md. 2014), aff'd. 825
F.3d 235 (4th Cir. 2016) (citations omitted).
Degree of Control
examining the degree of control exercised by the Club, the
key inquiry is whether the dancer's “freedom to
work when she wants and for whomever she wants reflects
economic independence, or whether these freedoms merely mask
the economic reality of dependence.” Harrell,
992 F.Supp. at 1349 (citing Reich v. Priba Corp.,
890 F.Supp. 586, 592 (N.D. Tex. 1995)); see also Mednick
v. Albert Enters., Inc., 508 F.2d 297, 303 (5th Cir.
1975) (“An employer cannot saddle a worker with the
status of independent contractor, thereby relieving itself of
its duties under the FLSA, by granting [her] some legal
powers where the economic reality is that the worker is not
and never has been independently in the business which the
employer would have [her] operate”). The Court looks
“not only at the [C]lub's rules and guidelines
regarding the dancers' performances and behavior, but
also to the [C]lub's control over the atmosphere and
clientele”' McFeeley, 47 F.Supp.3d at 268
(internal quotation and citation omitted). “An
entertainer can be considered an independent contractor only
if she exerts such a control over a meaningful part of the
business that she stands as a separate economic
entity.” Usery, 527 F.2d at 1312-13.
Court finds that the Club exerted a significant amount of
control over business operations and that Plaintiffs were not
separate economic entities. Plaintiffs had no authority to
hire, fire, discipline, order goods, enter into contracts,
set prices, or create policies-the Club retained this
authority exclusively. Plaintiffs did not advertise for the
Club, even though Ms. Johnson advertised her personal
services to certain clients. Mr. Orrell installed video
surveillance at the Club so that he could oversee Club
activities even when he was not there. The Club required
Plaintiffs to work four nights a week unless they had another
job, in which case they were required to work three nights a
week. The Club also ...