Burrell v. Toppers International Inc et al

MOTION for Partial Summary Judgment

M.D. Ga.March 8, 2017

IN THE UNITED STATES DISTRICT COURT MIDDLEDISTRICT OFGEORGIA ATHENS DIVISION CHRISTIE BURRELL, individually, and onbehalfof all others similarly situated, CIVIL ACTION NO.: 3:15-CV-125‐CDL Plaintiff, V. TOPPERS INTERNATIONAL, INC., adomestic profit corporation, DARNELL LEWIS GARDNER, individually, and SANDRA GARDNER, individually, * * * * * >l< * >l< * * * >l< *Defendants. DEFENDANTS' MOTIONFORPARTIAL SUMMARY JUDGMENT Pursuant to Federal Rule of Civil Procedure 56, and other applicable law, Defendants TOPPERS INTERNATIONAL, INC., DARNELL LEWIS GARDNER, and SANDRA GARDNER, through their undersigned attorney, move the Court for an order granting partial summary judgment on the issue of whether Defendants willfully violated the Fair Labor Standards Act, asamended, and whether Defendants acted in good faith regarding compensation of Plaintiffs. This motion is supported by Affidavits of Darnell Lewis Gardner and Sandra Gardner, filed herewith. Defendants also file herewithabrief in support of this motionand their statement of undisputedmaterial facts. WHEREFORE, Defendants pray that the Court granted their Motion for Partial Summary Judgment on the issues of willfulness; and grant Defendants such other and further reliefasmay bejust and appropriate. Case 3:15-cv-00125-CDL Document 65 Filed 03/08/17 Page 1 of 3 RESPECTFULLY SUBMITTED, this 8th day of March, 2017. P. O. Box 893 Athens, GA 30603 office 706‐353‐7736 fax 706-354-4713 john@mcarthurlaw.net MCARTHUR,MCARTHUR& OVEREND, LLP By: /s/ John Jay McArthur JOHN JAY MCARTHUR Georgia BarNo. 480725 Attorney for Defendants Case 3:15-cv-00125-CDL Document 65 Filed 03/08/17 Page 2 of 3 IN THE UNITED STATES DISTRICT COURT MIDDLEDISTRICT OFGEORGIA ATHENS DIVISION CHRISTIE BURRELL, individually, and onbehalfof all others similarly situated, CIVIL ACTION NO.: 3:15-CV‐125-CDL Plaintiff, V. TOPPERS INTERNATIONAL, INC., adomestic profit corporation, DARNELL LEWIS GARDNER, individually, and SANDRA GARDNER, individually, * * * * * >l< * * * >l< * * *Defendants. CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing Defendants' Motion for Partial Summary Judgment upon Plaintiff by mailing a copy thereof to Plaintiffs' attorney of record, viz. .' Andrew Frisch, Esq., Morgan & Morgan, P.A., 600 N. Pine Island Road, Suite 400, Plantation, Florida 33324, and by emailing a copy to AFrisch@forthepeople.com, all in the manner provided by law and by rule. This 8th day of March, 2017. /s/ John Jay McArthur JOHN JAY MCARTHUR Case 3:15-cv-00125-CDL Document 65 Filed 03/08/17 Page 3 of 3 IN THE UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF GEORGIA ATHENS DIVISION CHRISTIE BURRELL, individually, and onbehalfof all others similarly situated, CIVIL ACTION NO.: 3:15-CV-125‐CDL Plaintiff, V. TOPPERS INTERNATIONAL, INC., adomestic profit corporation, DARNELL LEWIS GARDNER, individually, and SANDRA GARDNER, individually, Defendants. AFFIDAVIT OFDARNELLLEWISGARDNER IN SUPPORT OFMOTIONFORPARTIAL SUMMARY JUDGMENT DARNELL LEWIS GARDNER, Defendant herein, personally appeared before the undersigned officer authorized to administer oaths and, after being duly sworn, stated the following: 1. My name is Darnell Lewis Gardner. I am sui juris and this affidavit is based upon matters within my personal knowledge. This affidavit is given in support of Defendants' Motion for Partial Summary Judgment and for all other purposes authorized by law. 2. I am a Defendant in this action and I am the sole shareholder, director, and officer of Defendant Toppers International, Inc. I am the son of Defendant Sandra Gardner. When appropriate herein, the terms "I" and "we" refer to me, Toppers International, Inc., and Sandra Gardner, asthe context may indicate. Case 3:15-cv-00125-CDL Document 65-1 Filed 03/08/17 Page 1 of 4 I operate an adult entertainment establishment in Athens, Georgia, known as "Toppers International Showbar". 4. I have been involved in the adult entertainment business in Athens, Georgia and in Las Vegas, Nevada for anumber of years. I have considered the adult entertainers working at Toppers to be independent contractors rather than employees, within the meaning of the Fair Labor Standards Act, as amended ["FLSA"]. We have never willfully violated any provisions of the FLSA nor any other applicable law regarding persons working at Toppers. We have at all times acted in good faith, relying upon our reasonable interpretations of the FLSA, regulations promulgated thereunder, and other law, in all matters relating to the operation of Toppers. 6. I am very familiar with industry standards regarding compensation of adult entertainers. That industry standard for many years has classified adult entertainers asindependent contractors with their compensation coming exclusively from tips. I never believed adult entertainers at Toppers to be "employees" under the FLSA but rather considered them to be "independent contractors" at all times. 7. To my knowledge, no adult entertainer performing at Toppers has ever requested to be treated as an employee, until the filing of the instant action and, in fact, even after this action, Case 3:15-cv-00125-CDL Document 65-1 Filed 03/08/17 Page 2 of 4 adult entertainers who continue to work at Toppers have still expressed they wanted to be independent contractors, rather than employees. 8. I recall that we conferred with a field agent for the Georgia Department of Labor in connection with our opening the business regarding how the entertainers were to becompensated andmy understandingwas that our arrangement was satisfactory. 9. I understand there have been many standards and tests that are utilized to determine whether an individual is an employee of a particular enterprise. As I understand it, whether a particular person is an employee or an independent contractor for FLSA purposes is not a simple question but, rather, is dependent upon the circumstances of each case and there is no clear definition of "employee" for FLSA purposes. In fact, I am informed that the United States Court of Appeals for the EleventhCircuit has not yet clearly addressed this issue. 10. I never willfully violated the Fair Labor Standards Act, asamended, and I have acted in good faith at all times regarding compensation of adult entertainers at Toppers. FURTHER,AFFIANT SAYETHNOT. QJJJLLJL/ DARNELL LEWIS GARDNER Swor .,pdsubsciied before me, . r , WW March, 2017. ' :w‘uuuofiryWhile Oglethorpe County, Georgia a“ MM)?-Commissmn Expires July 9 2018"'tcorioat"“ 3’: Case 3:15-cv-00125-CDL Document 65-1 Filed 03/08/17 Page 3 of 4 IN THE UNITED STATES DISTRICT COURT MIDDLEDISTRICT OFGEORGIA ATHENS DIVISION CHRISTIE BURRELL, individually, and onbehalfof all others similarly situated, CIVIL ACTION NO.: 3:15-CV‐125‐CDL Plaintiff, V. TOPPERS INTERNATIONAL, INC., adomestic profit corporation, DARNELL LEWIS GARDNER, individually, and SANDRA GARDNER, individually, * >l< * >l< * >l< * * * >l< * * *Defendants. CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing Affidavit of Darnell Lewis Gardner in Support of Motion for Partial Summary Judgment upon Plaintiff by mailing a copy thereof to Plaintiffs' attorney of record, viz. .'Andrew Frisch, Esq., Morgan & Morgan, P A , 600 N. Pine Island Road, Suite 400, Plantation, Florida 33324, and by emailing a copy to AFrisch@forthepeople.com, all in the manner providedby law and by rule. This 8th day of March, 2017. /s/ John Jay McArthur JOHN JAY MCARTHUR Case 3:15-cv-00125-CDL Document 65-1 Filed 03/08/17 Page 4 of 4 IN THE UNITED STATES DISTRICT COURT MIDDLEDISTRICT OFGEORGIA ATHENS DIVISION CHRISTIE BURRELL, individually, and onbehalfof all others similarly situated, CIVIL ACTION NO.: 3:15-CV‐125-CDL Plaintiff, V. TOPPERS INTERNATIONAL, INC., adomestic profit corporation, DARNELL LEWIS GARDNER, individually, and SANDRA GARDNER, individually, * >l< * * >l< * >l< * >l< * >l< * *Defendants. AFFIDAVIT OFSANDRAGARDNER IN SUPPORT OFMOTIONFORPARTIAL SUMMARY JUDGMENT SANDRA GARDNER, Defendant herein, personally appeared before the undersigned officer authorized to administer oaths and, after being duly sworn, stated the following: 1. My name is Sandra Gardner. I am sui juris and this affidavit is based upon matters within my personal knowledge. This affidavit is given in support of Defendants’ Motion for Partial Summary Judgment and for all other purposes authorized by law. 2. I amaDefendant in this action. I previously owned and operated the adult entertainment club known as "Toppers International Showbar". I no longer own or operate it asmy son, v_i;._: Defendant Darnell Lewis Gardner, now does so. I am now employed as a "house mom" at Toppers and I have previously worked intermittently in that same capacity. Case 3:15-cv-00125-CDL Document 65-2 Filed 03/08/17 Page 1 of 3 093d \«mfig£L<. ‘t . . . "- : ' . ‘Y" .- 7 . ‘ " g “ # . _ U.5 ‘ C, l . l . l . ‘ " l My Public.Oglethorpe County, Geargla 3. I have been in the adult entertainment business for some years now and I am quite familiar with the industry standard that generally treats adult entertainers as "independent contractors", rather than "employees". That industry standard has obtained for many years now. 4. Early in my involvement with Toppers, probably around 1993. l inquired of our accounting firm, Padgett Business Services, about the legality of compensation methods and we were informed that the adult entertainers would beconsidered independent contractors if Toppers did not touch any money they received as tips and if Toppers did not control when the adult entertainers came to work nor left. I also understood that Toppers could not require adult entertainers to share their tips with other persons working at Toppers nor could Toppers set specific amounts for sharing of tips by the adult entertainers. I recall that this information came from field agents at the Georgia Department of Labor and that Padgett Business Services was involved. 5. We have never willfully violated any provisions of the Fair Labor Standards Act. as amended, and wehave always acted in good faith regardingcompensation of adult entertainers at Toppers. FURTHER.AFFIANT SAYETH NOT. SANDRAGA DNER ark subscribed before me. ch, 2017. WMy.Go‘mmission ExpiresJuly 9 20189 Case 3:15-cv-00125-CDL Document 65-2 Filed 03/08/17 Page 2 of 3 IN THE UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF GEORGIA ATHENS DIVISION CHRISTIE BURRELL. individually, and * on behalfof all others similarly situated. * * CIVIL ACTION NO.: 3:15-CV-125-CDL Plaintiff, * a: v. ** TOPPERS INTERNATIONAL. INC. * adomestic profit corporation. DARNELL * LEWIS GARDNER. individually, and * SANDRA GARDNER. individually, ** Defendants. * CEBTIEICATE OBSERVICE I hereby certify that I have this day served the foregoing Affidavit of Sandra Gardner in Support of Motion for Partial Summary Judgment upon Plaintiff by mailing a copy thereof to Plaintiffs' attorney of record, viz. .' Andrew Frisch, Esq.. Morgan & Morgan, P.A., 600 N. Pine Island Road. Suite 400, Plantation, Florida 33324, and by emailing a copy to AFrisch@forthepeople.com. all in the manner provided by law and by rule. This 8th day of March.2017. $111th JayMsArthur ,, 7 , JOHN JAY MCARTHUR Case 3:15-cv-00125-CDL Document 65-2 Filed 03/08/17 Page 3 of 3 IN THE UNITED STATES DISTRICT COURT MIDDLEDISTRICT OFGEORGIA ATHENS DIVISION CHRISTIE BURRELL, individually, and onbehalfof all others similarly situated, CIVIL ACTION NO.: 3:15-CV-125-CDL Plaintiff, V. TOPPERS INTERNATIONAL, INC., adomestic profit corporation, DARNELL LEWIS GARDNER, individually, and SANDRA GARDNER, individually, Defendants. DEFENDANTS' STATEMENT OFMATERIAL FACTS AS TO WHICHNO GENUINE ISSUESARE TO BE TRIED Pursuant to the provisions of Local Rule 56 of the United States District Court for the Middle District of Georgia, Defendants submit the following material facts as to which no genuine issues are to be tried herein, in support of Defendants' Motion for Partial Summary Judgment: 1. Defendant DARNELL LEWIS GARDNER, through Defendant TOPPERS INTERNATIONAL, INC.,operates anadult entertainment club known as"Toppers International Showbar" in Athens, Georgia [Darnell Lewis Gardner Affidavit at Paragraph3]. 2. Defendant SANDRA GARDNER previously operated that establishment [Affidavit of Sandra Gardner at Paragraph2]. Case 3:15-cv-00125-CDL Document 65-3 Filed 03/08/17 Page 1 of 4 3. Both Defendants DARNELL LEWIS GARDNER and SANDRA GARDNER have been involved in the adult entertainment industry for a number of years [Affidavit of Darnell Lewis Gardner at Paragraph 4; Affidavit of Sandra Gardner at Paragraph 3; Depositions of Darnell Lewis Gardner and Sandra Gardner, dated January 30, 2017]. 4. Both Defendants DARNELL LEWIS GARDNER and SANDRA GARDNER are familiar with the industry standard regarding compensation of adult entertainment, which standards have obtained for many years [Affidavit of Darnell Lewis Gardner at Paragraph 6; Affidavit of Sandra Gardner at Paragraph 3; Depositions of Darnell Lewis Gardner and Sandra Gardner, dated January 30, 2017]. 5. Those industry standards provided that adult entertainers be treated as "independent contractors" rather than "employees" [Affidavit of Darnell Lewis Gardner at Paragraph 6; Affidavit of Sandra Gardner at Paragraph 3; Depositions of Darnell Lewis Gardner and Sandra Gardner, January 30, 2017]. 6. No adult entertainer at Toppers has ever requested to be treated asan "employee" rather than an "independent contractor" until the instant litigation. Adult entertainers who continue to work at Toppers still want to be treated as independent contractors rather than employees [Affidavit of Darnell Lewis Gardner atParagraph7]. Case 3:15-cv-00125-CDL Document 65-3 Filed 03/08/17 Page 2 of 4 7. Based upon information from field agents at the Georgia Department of Labor and their accounting firm, Defendants believe their method of compensation of adult entertainers was legal [Affidavit of Darnell Lewis Gardner at Paragraph 8; ,Affidavit of Sandra Gardner at Paragraph4]. 8. Defendant DARNELL LEWIS GARDNER understood that there were many factors involved in determining whether aparticular person would be an "employee" or an "independent contractor" and he was aware that the issue is confusing and unsettled [Affidavit of Darnell Lewis Gardner at Paragraph9]. 9. Defendants did not violate the FLSA willfully and they acted in good faith [Affidavit of Darnell Lewis Gardner at Paragraph 10; Affidavit of Sandra Gardner at Paragraph5]. RESPECTFULLY SUBMITTED, this 8th day of March, 2017. MCARTHUR,MCARTHUR& OVEREND, LLP P. O. Box 893 By: /s/ John Jay McArthur Athens, GA 30603 JOHN JAY MCARTHUR office 706-353-7736 Georgia BarNo. 480725 fax 706-354-4713 Attorney for Defendants john@mcarthurlaw.net Case 3:15-cv-00125-CDL Document 65-3 Filed 03/08/17 Page 3 of 4 IN THE UNITED STATES DISTRICT COURT MIDDLEDISTRICT OF GEORGIA ATHENS DIVISION CHRISTIE BURRELL, individually, and onbehalfof all others similarly situated, CIVIL ACTION NO.: 3:15-CV‐125-CDL Plaintiff, V. TOPPERS INTERNATIONAL, INC., adomestic profit corporation, DARNELL LEWIS GARDNER, individually, and SANDRA GARDNER, individually, * >l< * * >l< * >14 * a: * >l<* *Defendants. CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing Defendants' Statement of Material Facts As To Which No Genuine Issues Are To Be Tried upon Plaintiff by mailing a copy thereof to Plaintiffs' attorney of record, viz. .'Andrew Frisch, Esq.,Morgan& Morgan, P A , 600 N. Pine Island Road, Suite 400, Plantation, Florida 33324, and by emailing a copy to AFrisch@forthepeople.com, all in the manner providedby law and by rule. This 8th day of March, 2017. /s/ John Jay McArthur JOHN JAY MCARTHUR Case 3:15-cv-00125-CDL Document 65-3 Filed 03/08/17 Page 4 of 4 IN THE UNITED STATES DISTRICT COURT MIDDLEDISTRICT OF GEORGIA ATHENS DIVISION CHRISTIE BURRELL, individually, and onbehalfof all others similarly situated, CIVIL ACTION NO.: 3:15-CV‐125-CDL Plaintiff, V. TOPPERS INTERNATIONAL, INC., adomestic profit corporation, DARNELL LEWIS GARDNER, individually, and SANDRA GARDNER, individually, * * * * >!< * >l< * * * >l< * *Defendants. BRIEF IN SUPPORT OFDEFENDANTS' MOTIONFORPARTIAL SUMMARY JUDGMENT Defendants TOPPERS INTERNATIONAL, INC., DARNELL LEWIS GARDNER, and SANDRA GARDNER, through their undersigned attorney, submit this Brief in Support of their Motion for Partial Summary Judgment. BACKGROUND Plaintiff Christie Burrell brought this action under the Fair Labor Standards Act, as amended ("FLSA"), claiming that she and other adult entertainers at Toppers International Showbar in Athens, Georgia were "employees", rather than "independent contractors" under the FLSA and thus entitled to minimum wage and overtime compensation. Several other persons "opted in" as Plaintiffs and they were conditionally certified as a collective action class. Depositions have been taken and written discovery provided. Defendants have moved for partial summary judgment, asserting that there is no genuine issue of any material fact and that they are entitled to judgment asamatter of law on the issue of whether the alleged FLSA violations were willful and on the issue of whether any alleged violations were committed in good faith. Case 3:15-cv-00125-CDL Document 65-4 Filed 03/08/17 Page 1 of 4 ARGUMENT AND CITATIONOF AUTHORITY Standard of Review Federal Rule of Civil Procedure 56 provides that summary judgment should be granted when the record reveals there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. The Court may determine what material facts are genuinely not at issue and so specify in an order granting partial summary judgment. Federal Rule of Civil Procedure 56(d)(1). After a party seeking summary judgment identifies grounds that show the absence of a genuine issue of material fact (Celotex Corp. v. Catrett, 477 US . 317 (1986)), the burden then shifts to the non-movant who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact does exist (Anderson v. Liberty @ w ,477 US . 242 (1986)). Discussion The ordinary statute of limitations in cases under the FLSA is two years but, if the cause of action arises out of awillful violation of the FLSA, the applicable statute of limitation is three years from the accrual of the cause of action. 29 U.S.C. § 255(a); McLaughlin v. Richland Shoe C9” 486 US 128 (1988); Allen v. Board of Public Education of Bibb County, 495 F.3d 1306 (11th Cir. 2007). The "burden rests with the employee to prove by a preponderance of the evidence that her employer acted willfully." Davila V. Menendez, 717 F.3d 1179, 1185 (11th Cir. 2013). Here, Defendants did not act willfully in their compensation practices as they followed the long-prevailing industry standard and the individual Defendants had longworked in the adult entertainment business. Employees who prevail under the FLSA may recover liquidated damages unless the employer proves action in good faith and that it had reasonable grounds for believing that the Case 3:15-cv-00125-CDL Document 65-4 Filed 03/08/17 Page 2 of 4 alleged actions were not violative of the FLSA. 29 U.S.C. § 260. The record here establishes that Defendants did act in good faith as they relied on the long-standing industry standard of compensation coming exclusively from tips (Wajcman V. Investment Corp. of Palm Beach, 620 F.Supp.2d 1353 (SD Florida 2009) and they sought advice from their accounting firm and the Georgia Department of Labor. Furthermore, asnoted in Stevenson v. The Great American Dream, Inc., Civil Action No. 1:12-CV-3359-TWT, in the United States District Court for the Northern District of Georgia, May 14, 2015 order granting defendant's motion for partial summary judgment, whether an individual is an "employee" or an "independent contractor" is not a simple question. "Because the FLSA does not provide a clear definition of 'employee,’ courts must utilize a multi-factor balancing test. Consequently, given the amorphus nature of the term 'employee,' the Court is reluctant to conclude that [the employer's] belief ‐ that the entertainers were not 'employees' under the FLSA ‐ was objectively unreasonable." I_d_.at p. 9. CONCLUSION Defendants are entitled to partial summary judgment on the issues of whether any alleged violations of the FLSA were willful and on the issue of their good faith. RESPECTFULLY SUBMITTED, this 8th day of March, 2017. MCARTHUR,MCARTHUR& OVEREND, LLP P. O.Box 893 By: /s/ John Jay McArthur Athens, GA 30603 JOHN JAY MCARTHUR office 706-353-7736 Georgia BarNo. 480725 fax 706-354-4713 Attorney for Defendants john@mcarthurlaw.net Case 3:15-cv-00125-CDL Document 65-4 Filed 03/08/17 Page 3 of 4 IN THE UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF GEORGIA ATHENS DIVISION CHRISTIE BURRELL, individually, and onbehalfof all others similarly situated, CIVIL ACTION NO.: 3:15-CV‐125-CDL Plaintiff, V. TOPPERS INTERNATIONAL, INC., adomestic profit corporation, DARNELL LEWIS GARDNER, individually, and SANDRA GARDNER, individually, Defendants. CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing Brief in Support of Defendants' Motion for Partial Summary Judgment upon Plaintiff by mailing a copy thereof to Plaintiffs' attorney of record, viz. .'Andrew Frisch, Esq., Morgan & Morgan, P A , 600 N. Pine IslandRoad, Suite 400, Plantation, Florida 33324, and by emailing a copy to AFrisch@forthepeople.com, all in the manner providedby law and by rule. This 8th day of March, 2017. /s/ John Jay McArthur JOHN JAY MCARTHUR Case 3:15-cv-00125-CDL Document 65-4 Filed 03/08/17 Page 4 of 4