United States District Court, E.D. Michigan, Southern Division
JANE DOES 1, 2 and 3, individually and on behalf of all other similarly situated, Plaintiffs,
THE COLISEUM BAR & GRILL, INC., ABCDE OPERATING, LLC d/b/a The Penthouse Club, M & M ZIN ENTERPRISES, INC., JOHNI SEEMA, AND ALAN MARKOVITZ, Defendants.
OPINION AND ORDER GRANTING PLAINTIFFS' MOTION FOR
CONDITIONAL CERTIFICATION (ECF NO. 38)
HONORABLE LINDA V. PARKER JUDGE
lawsuit arises from the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201, et seq.
and the Michigan Minimum Wage Law (“MWL”), MCL
408.382, et seq. Plaintiffs allege
Defendants misclassified them and similarly situated workers
as independent contractors to circumvent the protections of
federal and state wage laws. Presently before the Court is
Plaintiffs' motion for conditional certification, filed
January 16, 2018. (ECF No. 38.) The motion has been fully
briefed. Finding the legal arguments sufficiently presented
in the parties' briefs, the Court is dispensing with oral
arguments pursuant to L.R. 7.1(f)(2). For the reasons that
follow, this Court grants Plaintiffs' motion for
Factual and Procedural Background
are current or former exotic dancers who have worked at
Defendants the Coliseum Bar and Grill, Inc. (the
“Coliseum”) or ABCD Operating, LLC d/b/a the
Penthouse Club (the “Penthouse”) (collectively
“the Clubs”) in the last three years. (ECF No. 38
at Pg ID 403.) According to Plaintiffs, Defendants Johni
Seema, Alan Markovitz, and M&M Zin Enterprises, Inc.
(“M & M”) own and operate the Clubs and
employ over 700 employees. (Id. at Pg ID 402.)
Defendants classified them and the putative class members as
independent contractors, despite having no control over their
employment. Defendants control the amounts of payments
required for each shift, the amounts and types of penalties
assessed during each shift, the lengths and times of the
shifts, the times required to perform, the minimum tip for
private dances, and the format of performances. (Id.
at Pg ID 403.) Plaintiffs allege that Defendants
misclassified them and other similarly situated employees,
including bartenders, shot girls, bouncers, and DJs, as
independent contractors. (Id.)
to Plaintiffs, customers' tips and the split tips were
the only sources of income. (Id. at Pg ID 404.)
Plaintiffs allege that many employees were not paid minimum
wage or for all of the hours worked and required to split
customers' tips with non-tipped employees. (Id.)
Further, Defendants demanded all gratuities and even retained
portions, as well as unlawfully deducted rents, fines and
penalties, referred to as “tip-outs.”
(Id. at Pg ID 401.) The tip-outs were mandatory and
included: a house fee minimum of $25.00 per shift; a VIP fee
minimum of $50.00 per shift; a house mom fee of $10 per
shift; and a valet fee of $7.00 per shift. Defendants also
assessed penalties and fines when employees were late, missed
or rescheduled dances, and when weight or physical appearance
were not in conformance with the Clubs' policy. (ECF No.
45 at Pg ID 405.) Defendants also assessed penalties for
chewing gum, talking, or using a cell phone. (Id.)
The fines and penalties were final and could not be
challenged. (Id.) Finally, Plaintiffs contend that
although the employees worked at different locations and
times, the unlawful pay practices and systems of payment were
consistent throughout the shifts and the Clubs.
16, 2017, Plaintiffs filed this lawsuit against the Clubs and
Markovitz. (ECF No.1.) Plaintiffs later amended their
complaint on August 28, 2017 to add Defendants M &M and
Seema. (ECF No. 16.) On September 18, 2017, Defendants filed
a motion to dismiss based upon an alleged mandatory
arbitration agreement that each dancer was required to sign
before working at the Clubs. (ECF No. 23.) Plaintiffs filed a
response on October 9, 2017, claiming the arbitration
agreement was invalid because it contained an invalid
collective action waiver. On May 31, 2018, Defendants filed a
request for an immediate hearing on the motion to dismiss in
light of the United States Supreme Court's decision in
Epic Sys. Corp. v. Lewis, No. 16-285, 2018 WL
2292444 (U.S. May 21, 2018). (ECF No. 59.) This Court held a
hearing on the motion to dismiss on June 20, 2018 and denied
the motion without prejudice. Presently before the Court is
Plaintiffs motion for conditional certification, filed
January 16, 2018. (ECF No. 38.) The motion has been fully
briefed. In the motion, Plaintiffs seek to represent the
following workers in this action:
exotic dancers, shot girls, bouncers, DJs and any other
individuals who worked for Defendants and were misclassified
by Defendants as independent contractors at any time in the
past three years.
FLSA requires all qualifying employers to pay employees no
less than the minimum wage and to compensate employees for
hours worked in excess of forty per workweek at a rate not
less than one-and-a-half times the regular rate of pay. 29
U.S.C. §§ 206(a)(1), 207(a)(1). The statute
authorizes collective actions to recover damages for unpaid
wages provided two conditions are satisfied: (1) the
employees are “similarly situated” and (2) all
plaintiffs provide written consent to becoming a party and
such consent is filed with the court. 29 U.S.C. §
216(b). “This section provides a mechanism that is
‘something akin to a class action.'”
Torres v. Gristede's Operating Corp., No.
04-cv-3316, 2006 WL 2819730, at *7 (S.D.N.Y. Sept. 29, 2006)
(citing Scholtisek v. Eldre Corp., 229 F.R.D. 381,
386 (W.D.N.Y. 2005)). Nevertheless, there are differences
between a FLSA collective action and a class action certified
under Federal Rule of Civil Procedure 23:
(1) the collective action binds only potential plaintiffs who
“opt-in, ” whereas Rule 23 requires class members
to opt-out, if they wish not to be included; and (2) FLSA
only requires employees be “similarly situated, ”
whereas Rule 23 requirements are more detailed. Sipas v.
Sammy's Fishbox, Inc., No. 05 Civ. 10319, 2006 U.S.
Dist. LEXIS 24318, at *4 (S.D.N.Y. Apr. 24, 2006).
Torres, 2006 WL 2819730, at *7.
within the Sixth Circuit and in other Circuits generally
apply a two-step procedure for determining whether a FLSA
case should proceed as a collective action. See, e.g.,
Waggoner v. U.S. Bancorp, 110 F.Supp.3d 759, 764 (N.D.
Ohio 2015); Watson v. Advanced Distrib. Servs., LLC,
298 F.R.D. 558, 561 (M.D. Tenn. 2014); see also Comer v.
Wal-Mart Stores, Inc., 454 F.3d 544, 546-47 (6th Cir.
2006) (describing the two-step process). At the initial
stage, the Court applies a fairly lenient standard because it
has minimal evidence. Olivio v. GMAC Mortgage Co.,
374 F.Supp.2d 545, 548 (E.D. Mich. April 1, 2004).
first stage, commonly referred to as the notice stage or
conditional certification, “the plaintiff must only
‘make a modest factual showing' that [the
plaintiff] is similarly situated to the other employees he
[or she] is seeking to notify.” Waggoner, 110
F.Supp.2d at 764 (quoting Comer, 454 F.3d at
546-47.) The plaintiff is required to show only that his or
her position is similar, not identical to the other
employees. See Heibel v. U.S. Bank, N.A., No.
2:11-cv-00593, 2012 U.S. Dist. LEXIS, at * 11 (S.D. Ohio
Sept. 27, 2012). Although, neither FLSA nor the Sixth Circuit
has defined “similarly situated, ” the court will
generally find Plaintiffs may be similarly situated where
“their claims [are] unified by common theories of
defendants' statutory violations, even if the proofs of
these theories are inevitably individualized and
distinct.” O'Brien v. Ed Donnelly Enter.,
Inc., 575 F.3d 567, 584-85 (6th Cir. 2009); see also
Olivio, 374 F.Supp.2d at 548 (Plaintiffs must show
“they and potential plaintiffs together were victims of
a common policy or plan that violated the law.”).
However, showing a “‘unified policy' of
violations is not required.” O'Brien, 575
F.3d at 584.
“‘certification is conditional and by no means
final.'” Comer, 454 F.3d at 546 (quoting
Pritchard v. Dent Wizard Int'l, 210 F.R.D. 591,
595 (S.D. Ohio 2002)). Finally, at this stage of the
litigation, the court does not consider the merits, evaluate