LAURA MCFEELEY, On Behalf of Herself and All Others Similarly situated, a/k/a Dynasty; DANIELLE EVERETT, a/k/a Jasmine; CRYSTAL NELSON; DANNIELLE ARLEAN MCKAY; JENNY GARCIA; PATRICE HOWELL, Plaintiffs – Appellees,
JACKSON STREET ENTERTAINMENT, LLC, d/b/a Fuego Exotic Dance Club, d/b/a Club Extasy Exotic Dance Club; RISQUE, LLC, d/b/a Fuego Exotic Dance Club; QUANTUM ENTERTAINMENT GROUP, LLC, d/b/a Fuego Exotic Dance Club; NICO ENTEPRISES, INC., d/b/a Fuego Exotic Dance Club; XTC ENTERTAINMENT GROUP, LLC, d/b/a Fuego Exotic Dance Club; UWA OFFIAH, Defendants-Appellants. and EBONY WASHINGTON; FERRIS PACE; SHANIEKA DANIELS; SCHARLENE ALUGBUO; NICOLE PRECIOUS GRAY; TARSHEA JACKSON; CLEMENTINA IBE, as personal representative of the Estate of Scharlene Alugbuo, Plaintiffs, SECRETARY OF LABOR, Amicus Supporting Appellees.
Argued: May 11, 2016
from the United States District Court for the District of
Maryland, at Greenbelt. Deborah K. Chasanow, Senior District
Michael Lloyd Smith, SMITH GRAHAM & CRUMP, LLC, Largo,
Maryland, for Appellants.
Cohen Greenberg, ZIPIN, AMSTER & GREENBERG, LLC, Silver
Spring, Maryland, for Appellees. Katelyn Jean Poe, UNITED
STATES DEPARTMENT OF LABOR, Washington, D.C., for Amicus
Michael K. Amster, ZIPIN, AMSTER & GREENBERG, LLC, Silver
Spring, Maryland, for Appellees.
Patricia Smith, Solicitor of Labor, Jennifer S. Brand,
Associate Solicitor, Paul L. Frieden, Counsel for Appellate
Litigation, UNITED STATES DEPARTMENT OF LABOR, Washington,
D.C., for Amicus Curiae.
WILKINSON, GREGORY, and DIAZ, Circuit Judges.
WILKINSON, Circuit Judge:
case, exotic dancers have sued their dance clubs for failure
to comply with the Fair Labor Standards Act and corresponding
Maryland wage and hour laws. The district court held that
plaintiffs were employees of the defendant companies and not
independent contractors. The court properly captured the
economic reality of the relationship here, and we now affirm
as noted, are exotic dancers who worked at Fuego Exotic Dance
Club (Fuego) and Extasy Exotic Dance Club (Extasy) in Prince
George's County, Maryland for various periods between
April 2009 and April 2012. Defendant Uwa Offiah owns and
manages both Fuego and Extasy. No other party has a financial
interest in them.
alleged on behalf of themselves and others similarly situated
that defendant clubs and Offiah had misclassified them as
independent contractors rather than as club employees and
accordingly had failed to pay them the minimum wage required
by the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201,
et seq., the Maryland Wage and Hour Law (MHWL), Md. Code
Ann., Lab. & Empl. § 3-401, et seq. (West 2014), and
the Maryland Wage Payment and Wage Collection Law (MWPWC),
Md. Code Ann., Lab. & Empl. § 3-501, et seq. (West
2014). They sued defendants both for unpaid wages and
liquidated damages. The clubs denied that plaintiffs were
employees at any point of their working relationship and
raised counterclaims, all of which were unsuccessful, for
breach of contract, unjust enrichment, conversion, and fraud.
shall summarize at the outset the working relationship
between the dancers and the clubs. Anyone wishing to dance at
either club was required to fill out a form and perform an
audition. Defendants asked all hired dancers to sign
agreements titled "Space/Lease Rental Agreement of
Business Space" that explicitly categorized dancers as
independent contractors. The clubs began using these
agreements after being sued in 2011 by dancers who claimed,
as plaintiffs do here, to have been employees rather than
independent contractors. Defendant Offiah thereafter
consulted an attorney, who drafted the agreement containing
the "independent contractor" language.
duties at Fuego and Extasy primarily involved dancing on
stage and in certain other areas of the two clubs. At no
point did the clubs pay the dancers an hourly wage or any
other form of compensation. Rather, plaintiffs'
compensation was limited to performance fees and tips
received directly from patrons. The clubs also collected a
"tip-in" fee from everyone who entered either dance
club, patrons and dancers alike. The dancers and clubs
dispute other aspects of their working relationship,
including work schedules and policies.
January 3, 2014, plaintiffs filed a motion for partial
summary judgment, and defendants countered with a
cross-motion for summary judgment. The district court granted
plaintiffs' motion in part, finding that plaintiffs were
employees and not independent contractors under both federal
and state law. In drawing that conclusion, the district court
applied the six-factor "economic realities" test
for classifying employees and independent contractors. The
court placed special emphasis on "the degree of control
that the putative employer has over the manner in which the
work is performed, " Schultz v. Capital Int'l
Sec., Inc., 466 F.3d 298, 304-05 (4th Cir. 2006),
observing that defendants "exercised significant control
over the atmosphere, clientele, and operations of the
clubs." J.A. 996-97.
court reserved various disputes over monetary recovery for
the jury. Prior to trial, plaintiffs filed a motion in limine
seeking to prohibit defendants from asking plaintiffs about
their income tax records, performance fees, and tips. After
conducting a hearing, the court granted the motion.
case was tried before a jury from February 3 to 5, 2015. The
trial court rejected the clubs' objections to the jury
instructions and the verdict sheet. The jury found in favor
of plaintiffs and awarded them damages for unpaid wages.
Separately, the district court heard testimony on the issue
of liquidated damages and defendants' proffered
good-faith defense. The court found that defendants had
consulted an attorney in September 2011 regarding classifying
dancers as independent contractors and thereafter reasonably
believed that they were not violating the FLSA. The court
awarded liquidated damages to each of the plaintiffs only for
the period prior to September 2011. Defendants filed a motion
for judgment as a matter of law and/or for a new trial. Both
motions were denied on May 5, 2015. This appeal followed.
seek review as to five questions: (1) whether plaintiffs were
employees or independent contractors under the FLSA and
related state laws; (2) whether defendants acted in good
faith prior to September 2011 and were therefore not liable
to pay liquidated damages for that time period; (3) whether
the district court erred in barring defendants from
presenting evidence related to plaintiffs' income taxes,
performance fees, and tips; (4) whether the district court
erred in formulating its jury instructions and verdict sheet;
and (5) ...