McFeeley v. Jackson Street Entertainment, LLC
47 F. Supp. 3d 260
D. Maryland2014Background
- Plaintiffs are current/former exotic dancers at two Prince George’s County clubs (Fuego and Extasy) owned by Uwa Offiah and several corporate entities; they signed "lease" agreements classifying them as independent contractors and received no hourly wages, instead earning performance fees and tips.
- Plaintiffs sued under the FLSA, the Maryland Wage and Hour Law (MWHL), and the Maryland Wage Payment and Wage Collection Law, alleging misclassification, unpaid minimum wages/overtime, and seeking liquidated damages; defendants counterclaimed for breach of contract and unjust enrichment.
- Defendants concede dancers were not paid hourly wages and contend dancers’ performance fees/tips compensated them above minimum wage; defendants assert contractual independent-contractor status and seek offset for fees collected.
- The court applied the FLSA/MWHL "economic realities" test (six-factor inquiry) to determine employee status despite the contract labels and examined personal liability of Offiah using Bonnette-style factors and related tests.
- Material factual disputes remain about how performance fees were collected/distributed and whether those fees constitute tips or service charges under the FLSA—disputes that affect wage liability and damages calculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dancers are "employees" or independent contractors under FLSA/MWHL | Dancers were economically dependent on the clubs; control, limited investment/skill, and integral role show employee status | Dancers set schedules, earned by "hustle," and were free to work elsewhere, showing independent-contractor status | Held employees as matter of law after weighing six economic‑reality factors (control, profit/loss, investment, skill, permanence, integrality) |
| Whether Offiah is individually liable as an "employer" | Offiah exercised operational/control functions (hiring/onboarding, day-to-day operations, classification decisions) and is sole owner | Offiah claims limited direct involvement and blames predecessors for compensation practices | Held Offiah is an employer under FLSA/MWHL and jointly liable |
| Whether defendants violated minimum wage/overtime statutes | Plaintiffs: no hourly wages; fees and "tip-ins" produce sub‑minimum or negative hourly pay; fees are tips not service charges | Defendants: overall nightly earnings (performance fees + tips) exceed minimum wage; some fees are service charges/count as wages | Denied summary judgment to Plaintiffs on liability—material disputes about whether performance fees are wages (tip v. service charge), and credibility/records preclude resolution on summary judgment |
| Entitlement to liquidated damages and defendants' counterclaims (breach/unjust enrichment) | Plaintiffs seek liquidated damages if liability proven | Defendants seek summary judgment on counterclaims or setoff if plaintiffs obtain back wages | Court held it is premature to decide liquidated damages or defendants' counterclaims/setoff until liability and damages are resolved at trial |
Key Cases Cited
- Schultz v. Capital Int’l Sec., Inc., 466 F.3d 298 (4th Cir. 2006) (six‑factor economic‑reality test for employee status)
- Rutherford Food Corp. v. McComb, 331 U.S. 722 (U.S. 1947) (totality of circumstances governs employee/independent contractor inquiry)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary judgment standard; judge determines genuineness of factual disputes)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden shifting)
- Bonnette v. California Health & Welfare Agency, 704 F.2d 1465 (9th Cir. 1983) (factors for individual employer liability under FLSA)
- Reich v. Circle C. Investments, Inc., 998 F.2d 324 (5th Cir. 1993) (club control factors supporting employee status)
- Priba Corp. v. Reich (reported as Priba Corp. v. ?), 890 F. Supp. 586 (N.D. Tex. 1995) (control over pricing/atmosphere affects profit/loss factor)
- Harrell v. Diamond A Entm’t, Inc., 992 F. Supp. 1343 (M.D. Fla. 1997) (dancers’ limited capital risk and dependence on club for clientele)
- Hart v. Rick’s Cabaret Int’l, Inc., 967 F. Supp. 2d 901 (S.D.N.Y. 2013) (club rules, fines, and potential discipline evidence control)