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Sabrina Hart, et al v. Rick's Cabaret Int'l Inc.

December 20, 2010

SABRINA HART, ET AL., PLAINTIFFS
v.
RICK'S CABARET INT'L INC., ET AL., DEFENDANTS



The opinion of the court was delivered by: John G. Koeltl, District Judge:

MEMORANDUM OPINION AND ORDER

Plaintiffs Sabrina Hart and Reka Furedi brought suit against Rick's Cabaret International, Inc. ("RCII"), and its subsidiaries, RCI Entertainment (New York) Inc. ("RCI New York") and Peregrine Enterprises, Inc. ("Peregrine"). The plaintiffs allege that, while employed as adult entertainers by Rick's Cabaret in New York (which is owned by RCI New York), they were improperly classified as independent contractors, were not paid a minimum wage, and were required to make various back payments to the defendants. The plaintiffs allege that the defendants thereby violated their rights under the Fair Labor Standards Act ("the FLSA" or "the Act"), 29 U.S.C. § 201 et seq., and under the New York Labor Laws, § 190 et seq., § 650 et seq., and the supporting New York State Department of Labor Regulations, N.Y. Comp. Codes R. & Regs. tit. 12, § 137-1.1, et seq.

In June 2009, the plaintiffs moved for conditional certification of an FLSA collective class composed of entertainers who had performed at Rick's Cabaret in New York. The plaintiffs filed an Amended Complaint and, on August 27, 2009, the defendants moved to dismiss it as against RCII for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6). While the motion was pending, the plaintiffs filed a Second Amended Complaint, and the parties agreed that the motion to dismiss would be deemed filed against that version.

On December 16, 2009, the Court granted the motion to dismiss as to defendant RCII, on the ground that the allegation that RCII was the plaintiffs' "employer," within the meaning of the FLSA, was pleaded in a conclusory manner, and that the complaint failed to state a claim for relief. On the same day, the Court granted the plaintiffs' motion for conditional certification of the New York FLSA collective action, and ruled that notice could be sent to the potential opt-in class members. Notice was subsequently mailed to approximately 1100 current and former entertainers, and approximately 50 opted into the class during the opt-in period.

On April 6, 2010, the plaintiffs filed a motion for leave to file a Third Amended Complaint, adding RCII back into the action as a defendant. On May 1, 2010, the Court approved a stipulation between the parties whereby the defendants agreed not to oppose the plaintiffs' motion, but reserved the right to move to dismiss the amended Complaint. In their Third Amended Complaint ("the Complaint"), the plaintiffs assert claims against RCII as an "employer" of the entertainers who performed at Rick's Cabaret and at other clubs owned by RCII subsidiaries nationwide. The first and second causes of action allege that the defendants failed to pay the plaintiffs the minimum wage under the FLSA and the New York Labor Law. The remaining three causes of action assert claims against the defendants for violations of other provisions of the New York Labor Law.

The defendants have moved to dismiss the Complaint. The plaintiffs, in turn, have moved for certification of a class consisting of the following individuals, pursuant to Federal Rule of Civil Procedure 23:

All persons who worked at Rick's New York or were employed by Defendant Rick's Cabaret International Inc., RCI Entertainment (New York) Inc. and/or Peregrine Enterprises, Inc. in the state of New York as "entertainers" at any time six years prior to the filing of the Complaint to the entry of judgment in this case.

For the reasons explained below, the defendants' motion is denied, and the plaintiffs' motion is granted.

I.

A.

On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the allegations in the Complaint are accepted as true. Grandon v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d Cir. 1998). In deciding a motion to dismiss, all reasonable inferences must be drawn in the plaintiff's favor. Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir. 1995); Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989). The Court's function on a motion to dismiss is "not to weigh the evidence that might be presented at a trial but merely to determine whether the complaint itself is legally sufficient." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985). The Court should not dismiss the Complaint if the plaintiff has stated "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 571 (2007). A claim has facial plausibility when the plaintiff pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

B.

1.

The provisions of the FLSA and the New York Labor Law at issue in this case prohibit "employers" from taking certain actions with respect to "employees." For example, the FLSA requires that "employees" receive a set minimum hourly wage. See 29 U.S.C. § 206(a). The Act defines an "employee," in pertinent part, as "any individual employed by an employer." 29 U.S.C. § 203(e)(1). "Employ," in turn, means "to suffer or permit to work," 29 U.S.C. § 203(g), and "employer" includes "any person acting directly or indirectly in the interest of an employer in relation to an employee," 29 U.S.C. § 203(d). "The terms are to be expansively defined, with 'striking breadth,' in such a way as to 'stretch . . . the meaning of 'employee' to cover some parties who might not qualify as such under a strict application of traditional agency law principles.'" Ansoumana v. Gristede's Operating Corp., 255 F. Supp. 2d 184, 188-89 (S.D.N.Y. 2003) (quoting Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 236 (1992)); see also Carter v. Dutchess Cmty. Coll., 735 F.2d 8, ...


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