Mays v. Midnite Dreams
300 Neb. 485
| Neb. | 2018Background
- Midnite Dreams (d/b/a Shaker’s) operated an all‑nude club and leased stage/dressing room space to dancers under one‑year "Independent Artist Lease Agreements"; dancers paid a nightly flat fee and received tips from customers; Midnite Dreams paid no wages to dancers.
- Elizabeth Mays danced at Shaker’s (2012–2014) under two such lease agreements and worked under numerous posted and orally communicated "house rules" (scheduling, dress, set order, fees, customer interactions) enforced by management with fines and discipline.
- Mays sued for unpaid minimum and overtime wages, liquidated damages, and attorney fees under the FLSA, Nebraska Wage and Hour Act (WHA), and Nebraska Wage Payment and Collection Act (NWPCA). Her amended complaint did not allege interstate commerce or Midnite Dreams’ gross sales.
- The district court found Mays to be an "employee," awarded unpaid wages (full minimum wage), overtime, liquidated damages, attorney fees and costs under the FLSA and state law. Defendants appealed.
- The Nebraska Supreme Court held the district court’s employee finding under the WHA was not clearly erroneous but reversed FLSA and NWPCA relief as unsupported by the record and remanded to award damages/fees consistent with the WHA (finding Mays was a tipped employee under Nebraska law).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the lease agreements preclude employee status | Mays argued the house rules and actual control made her an employee despite the written lease | Midnite Dreams argued the written lease created a lessee/independent contractor relationship and parties can contract away WHA protections | Court: Lease cannot contract away WHA policy; factual findings (house rules/control) support employee status under WHA |
| Whether FLSA covers Mays / Midnite Dreams (individual or enterprise coverage) | Mays sought FLSA relief for unpaid wages, overtime, and liquidated damages | Defendants argued FLSA does not apply because neither Mays nor Midnite Dreams showed a sufficient nexus to interstate commerce or alleged employer sales threshold | Held: Plain error to award FLSA relief—record lacks minimal showing of Mays’ engagement in interstate commerce and no evidence/allegation of employer’s $500,000 sales threshold for enterprise coverage |
| Whether Mays is a tipped employee under Nebraska law (affecting wage rate) | Mays showed average tips (~$44/hr) after lease fees, so should qualify as tipped employee | Defendants contended no tip‑credit or full minimum wage should apply | Held: Under §48‑1203(2) Mays proved she received sufficient tips and is a tipped employee; entitled to Nebraska tipped minimum wage ($2.13/hr) rather than full minimum wage |
| Whether NWPCA claim and attorney fees under FLSA/NWPCA were proper | Mays sought NWPCA relief and associated attorney fees | Defendants argued NWPCA inapplicable because no regular payday or employer promise to pay wages existed; FLSA/NWPCA fees improper without entitlement to those statutes | Held: Plain error to award relief under NWPCA—no regular payday or evidence of promised wages; FLSA/NWPCA attorney fee awards vacated; remand to calculate damages/fees consistent with WHA only |
Key Cases Cited
- Bamford v. Bamford, Inc., 279 Neb. 259 (Neb. 2010) (contract contrary to public policy is void)
- Kime v. Hobbs, 252 Neb. 407 (Neb. 1997) (right of control is chief factor in employee/independent contractor analysis)
- Martinez v. Petrenko, 792 F.3d 173 (1st Cir. 2015) (employee bears burden to show nexus to interstate commerce; enterprise coverage requires proof of employer sales)
- Sobrinio v. Medical Center Visitor’s Lodge, Inc., 474 F.3d 828 (5th Cir. 2007) (purely local duties for motel employee did not constitute engagement in interstate commerce)
- Mitchell v. H. B. Zachry Co., 362 U.S. 310 (U.S. 1960) (test whether work is directly and vitally related to instrumentalities of interstate commerce)
- McLeod v. Threlkeld, 319 U.S. 491 (U.S. 1943) (Congress intended FLSA to regulate activities constituting interstate commerce, not merely affecting it)