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Does v. The Coliseum Bar & Grill, Inc.

United States District Court, E.D. Michigan, Southern Division

July 16, 2018

JANE DOES 1, 2 and 3, individually and on behalf of all other similarly situated, Plaintiffs,



         This 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 conditional certification.

         I. Factual and Procedural Background

         Plaintiffs 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.)

         According 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.

         On July 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:

         All 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.

         II. Applicable Law

         The 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.

         Courts 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).

         At the 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.

         This “‘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 ...

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