United States District Court, W.D. Texas, El Paso Division
ALYSSA BALLY and COURTNEY MAHARAJ, on behalf of themselves and all others similarly situated, Plaintiffs,
DREAMS CABARET, LLC et al., Defendants.
BRIONES SENIOR UNITED STATES DISTRICT JUDGE.
day, the Court considered Plaintiffs Alyssa Bally and
Courtney Maharaj's, on behalf of themselves and all
others similarly situated, (collectively,
"Plaintiffs") "Motion for Partial Summary
Judgment Regarding Liability" ("Motion"),
filed in the above-captioned case on October 27, 2017.
Therein, Plaintiffs ask the Court to grant partial summary
judgment in their favor regarding liability against
Defendants Jose Fong, Dreams Cabaret, LLC, Fion Sunrise, LLC,
and Fong Sunrise, LLC (collectively, "Defendants").
On November 13, 2017, Defendants filed their "Response
to Plaintiffs' Motion for Partial Summary Judgment
Regarding Liability" ("Response"). On November
17, 2017, Plaintiffs filed their Reply to Defendants'
Response. By a short order, on December 4, 2017, the Court
denied Plaintiffs' Motion. The Court will now explain the
reasons for its decision.
lawsuit is a collective action brought under the Fair Labor
Standards Act of 1938 ("FLSA"), 29 U.S.C. §
201 et seq. Plaintiffs are former exotic dancers for
Defendants in El Paso, Texas. Plaintiffs claim that
Defendants misclassified them as independent contractors and,
as a result, failed to pay them minimum wage and overtime.
Plaintiffs seek to recover unpaid minimum wages, unpaid
overtime wages, statutory liquidated damages, compensatory
damages, punitive damages, and attorneys' fees.
Defendants counter that, as a matter of economic reality,
Plaintiffs were not Defendants' employees and, therefore,
were exempt from the FLSA's minimum wage and overtime
Fong Sunrise, LLC ("Fong") and Fion Sunrise, LLC
("Fion") are two adult entertainment businesses in
El Paso, Texas, that own and operate Defendant Dreams Cabaret
("the nightclub"), another adult venue located in
the city. Pis.' 2d Am. Compl., ECF No. 24, ¶¶
10-11; Pis.' Mot. Partial Summ. J., ECF No. 40, Ex. 1, at
4-6. Defendant Jose Fong ("Mr. Fong") owns
fifty-one percent of Fong and all of Fion. Pis.' Mot. Partial
Summ. J., ECF No. 40, Ex. 1, at 4-6. Plaintiff Alyssa Bally
worked for Defendants as a dancer from 2014 to 2017.
Pis.' 2d Am. Compl., ECF No. 24, ¶ 16. Plaintiff
Courtney Maharaj worked for Defendants as a dancer from 2012
to 2016. Id. Hector Granillo ("Mr.
Granillo") worked as a disk jockey and later as a
general manager for Defendants from 2012 to 2017. Pis.'
Mot. Partial Summ. J., ECF No. 40, Ex. 2, at 6-7.
dancing is the only type of entertainment that the nightclub
provides. Id., Ex. 1, at 52; Pis.' 2d Am.
Compl., ECF No. 24, ¶ 29. While the nightclub does not
require dancers to have prior experience or training to
perform, dancers must pay for their costumes. Pis.' Mot.
Partial Summ. J., ECF No. 40, Ex. 1, at 47; Id., Ex.
2, at 55. The amount that dancers spend on their costumes
varies, but costumes typically consist of underclothing.
Pis.' Mot. Partial Summ. J., ECF No. 40, Ex. 2, at 55.
Further, dancers are required to sign in when they report to
perform and pay the nightclub rent. Id., Ex. 1, at
11, 21-23; Pis.' 2d Am. Compl., ECF No. 24, ¶¶
18-19. Additionally, the nightclub has a policy that calls
for dancers to have a license to work. Pis.' Mot. Partial
Summ. J., ECF No. 40, Ex. 2, at 54. Therefore, a dancer must
pay $50 dollars and get fingerprinted to obtain a license
with the sheriff. Id. El Paso County further
requires that dancers' licenses be kept on the premises
where they work or perform. Defs.' Resp. to Mot. Partial
Summ. J., ECF No. 41, at 15.
do not pay compensation to any dancer. Pis.' 2d Am.
Compl., ECF No. 24, ¶ 30. Compensation is limited to the
tips that dancers receive from customers for performing on
stage and for performing private table dances. Id.
However, Defendants spend between $448, 000 and $520, 000
dollars per year in maintaining and promoting the nightclub.
Pis.' Mot. Partial Summ. J., ECF No. 40, Ex. 1, at 49-55.
This includes the monthly $10, 000 dollars that Defendants
allocate to radio and newspaper advertisements. Id.
at 50. Additionally, Defendants exclusively decide the hours
that the nightclub operates; the type of drinks that are
provided to customers; the nightclub's location; the way
the nightclub looks on the inside, including the lighting,
the stage, the dressing rooms, and the furniture; the amount
of the cover charge; the total price that it takes to get
into the nightclub; and the method by which to advertise the
nightclub. Id. at 48-51; Pis.' 2d Am. Compl.,
ECF No. 24, ¶ 25.
April 7, 2017, Plaintiffs filed their Second Amended
Complaint, categorized as a collective action, on behalf of
themselves and all persons similarly situated who consented
to join the litigation. The Second Amended Complaint includes
four causes of action: (1) violation of the FLSA by
misclassifying Plaintiffs and all others similarly situated
as independent contractors and not paying them minimum wages,
(2) violation of the Texas Minimum Wage Act by misclassifying
Plaintiffs and all others similarly situated as independent
contractors and not paying them minimum wages, (3) violation
of the FLSA by misclassifying Plaintiffs and all others
similarly situated as independent contractors and not paying
them overtime wages, and (4) retaliatory discharge. Pis.'
2d Am. Compl., ECF No. 24, ¶¶ 41-69. On October 27,
2017, Plaintiffs filed their Motion.
court shall grant 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."
Fed.R.Civ.P. 56(a). "A party asserting that a fact
cannot be or is genuinely disputed must support the assertion
by... citing to particular parts of materials in the record
...." Fed.R.Civ.P. 56(c)(1). "[T]he plain language
of Rule 56 mandates the entry of summary judgment, after
adequate time for discovery and upon motion, against a party
who fails to make a showing sufficient to establish the
existence of an element essential to that party's case,
and on which that party will bear the burden of proof at
trial." Celotex Corp. v. Catrett, 477 U.S. 317,
the moving party bears the burden of demonstrating the
absence of a genuine issue of material fact."
Cannata v. Catholic Diocese of Austin, 700 F.3d 169,
172 (5th Cir. 2012) (citing Celotex, 477 U.S. at
323). Where the burden of proof lies with the nonmoving
party, the moving party may satisfy its initial burden by
"'showing'-that is, pointing out to the district
court-that there is an absence of evidence to support the
nonmoving party's case." Celotex, 477 U.S.
at 325. While the moving party "must demonstrate the
absence of a genuine issue of material fact, it does not need
to negate the elements of the nonmovant's case."
Duffie v. United States, 600 F.3d 362, 371 (5th Cir.
2010) (citing Boudreaux v. Swift Transp. Co., 402
F.3d 536, 540 (5th Cir. 2005)). "On the other hand,
'if the movant bears the burden of proof on an issue,
either because he is the plaintiff or as a defendant he is
asserting an affirmative defense, he must establish beyond
peradventure all of the essential elements of the claim or
defense to warrant judgment in his favor.'"
Alzuraqi v. Grp. 1 Auto., Inc., 921 F.Supp.2d 648,
657 (N.D. Tex. 2013) (quoting Fontenot v. Upjohn
Co., 780 F.2d 1190, 1194 (5th Cir. 1986)).
is "material" only if it would permit "a
reasonable jury ... [to] return a verdict for the nonmoving
party" and "might affect the outcome of the
suit." Douglass v. United Servs. Auto.
Ass'n, 65 F.3d 452, 458-59 (5th Cir. 1995),
aff'den banc, 79 F.3d 1415 (5th Cir. 1996)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986)). "If the moving party fails to meet its
initial burden, the motion for summary judgment must be
denied, regardless of the nonmovant's response."
Duffie, 600 F.3d at 371 (internal quotation marks
the moving party has met its Rule 56 burden, the nonmoving
party cannot survive a summary judgment motion by resting on
the mere allegations of its pleadings." Id. The
nonmovant "must identify specific evidence in the record
and articulate [how] that evidence supports that party's
claim." Id. (quoting Johnson v. Deep E.
Tex. Reg 7 Narcotics Trafficking Task Force,
379 F.3d 293, 301 (5th Cir. 2004)) (citation omitted).
"This burden is not satisfied with some metaphysical
doubt as to the material facts, by conclusory allegations, by
unsubstantiated assertions, or by only a scintilla of
evidence." Id. (quoting Little v. Liquid
Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)) (internal
citations omitted). "In deciding a summary judgment
motion, the court draws all reasonable inferences in the
light most favorable to the nonmoving party."
Id. (citing Anderson, Ml U.S. at 255).
their Motion, Plaintiffs raise two arguments: (1) that
Defendants misclassified them as independent contractors and,
therefore, owe them minimum and overtime wages for all hours
worked under the FLSA; and (2) that Mr. Fong is an employer
under the FLSA. Pis.' Mot. Partial Summ. J., ECF No.
40, at 7, 18. Defendants claim that Plaintiffs' summary
judgment evidence fails to establish that Plaintiffs were
Defendants' employees and that Mr. Fong is an employer
under the FLSA. Defs.' Resp. to Mot. Partial Summ. J.,
ECF No. 41, at 5, 18. Since the Court finds that partial
summary judgment cannot be granted because a fact issue
exists regarding Plaintiffs' classification under the
FLSA, the Court will not address Plaintiffs' second
argument, whether Mr. Fong is an employer.
determining whether an individual is an "employee"
within the meaning of the FLSA, the central question is
"whether the alleged employee, as a matter of economic
reality, is economically dependent upon the business to which
she renders her services." Reich v. Circle C Invs.,
Inc., 998 F.2d 324, 327 (5th Cir. 1993) (citing
Brock v. Mr. WFireworks Inc., 814 F.2d 1042, 1043
(5th Cir. 1993), cert, denied, 484 U.S. 924 (1987)).
Stated differently, the main focus is on "whether the
individual is, as a matter of economic reality, in business
for herself." Id. (citing Donovan v.
Tehco, 642 F.2d 141, 143 (5th Cir. 1981)). The
contractual designation of a worker as an independent
contractor is not necessarily controlling. Thibault v.
Bellsouth Telecomms., Inc., 612 F.3d 843, 845-46 (5th
determine the degree of an individual's dependency, five
factors must be considered: "(1) the degree of control
exercised by the alleged employer; (2) the extent of the
relative investments of the worker and alleged employer; (3)
the degree to which the worker's opportunity for profit
and loss is determined by the alleged employer; (4) the skill
and initiative required in performing the job; and (5) the
permanency of the relationship." Reich, 998
F.2d at 327. These factors are only guidelines in determining
employee status and no single factor is independently
determinative in the analysis. Id. (citing
Brock, 814 F.2d at 1054).
Court finds that the second and fourth factors weigh in favor
of employee status under the FLSA. However, partial summary
judgment cannot be granted because a fact issue exists
regarding the first, third, and fifth factors. The Court now
addresses the five factors.
Degree of Control Defendants Exercised ...