Henderson v. 1400 Northside Drive, Inc.
110 F. Supp. 3d 1318
N.D. Ga.2015Background
- Plaintiffs are current and former male exotic dancers at an adult nightclub owned by 1400 Northside Drive, Inc.; each signed an “Independent Contractor Agreement.”
- Plaintiffs sued under the FLSA claiming misclassification as independent contractors and unpaid minimum wages; defendants raised the creative professional exemption (CPE) and argued customer payments were employer "service charges" that could offset wage obligations.
- Material undisputed facts: dancers need no special training, hiring is often done by appearance, routines are unscripted but generally do not require invention, imagination, or special talent.
- Many customer payments (stage, floor, VIP lounge) were cash paid directly to dancers and not recorded in the club’s gross receipts; some VIP-room credit card charges were recorded by the club.
- Parties filed cross-motions for partial summary judgment on (1) applicability of the CPE and (2) whether customer payments are service charges usable as offsets; the defendant also moved to strike portions of plaintiffs’ briefs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dancers fall within the creative professional exemption (CPE) to the FLSA | Plaintiffs: dancing at the club is routine physical/aesthetic work that lacks requisite invention, imagination, or recognized artistic talent, so CPE does not apply | Defendant: performances are unscripted artistic expression and thus qualify for CPE | Held: CPE does not apply; plaintiffs entitled to judgment on defendant's CPE defense (exemption narrowly construed and undisputed facts show insufficient creativity) |
| Whether customer payments are "service charges" (countable as employer receipts and distributable to employees) that may offset wage obligations | Plaintiffs: most payments were cash tips not included in club gross receipts and were paid directly to dancers, so they are tips not service charges and cannot offset wages | Defendant: certain charges (notably VIP-room credit card minimums recorded in receipts) are service charges and can offset FLSA obligations | Held: Payments are tips, not service charges; cash payments were not in gross receipts nor distributed by employer, so offsets are unavailable; plaintiffs entitled to judgment on offsets defense |
| Whether plaintiffs violated a stipulation by arguing employee status and whether briefs should be struck | Plaintiffs: their briefs referenced employee-status facts relevant to defenses but did not ask the court to decide employment status as law | Defendant: plaintiffs violated stipulation and asked for summary judgment on employee status; move to strike briefs | Held: Motion to strike denied; plaintiffs did not request legal determination of employee status and court made no such finding |
Key Cases Cited
- Harrell v. Diamond A Entertainment, Inc., 992 F. Supp. 1343 (M.D. Fla. 1997) (rejected creative-professional exemption for exotic dancer where no standards, training, or required dance steps existed)
- Hart v. Rick's Cabaret Int'l, Inc., 967 F. Supp. 2d 901 (S.D.N.Y. 2013) (performance fees in strip club context were tips, not service charges; must be recorded in gross receipts and distributed by employer to count as service charges)
- Reich v. Priba Corp., 890 F. Supp. 586 (N.D. Tex. 1995) (table and stage dance fees appropriately classified as tips)
- Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233 (11th Cir. 2008) (courts should narrowly construe FLSA exemptions)