Thompson v. RCX, LLC

BARBARA THOMPSON, et al., Plaintiffs, v. RCX, LLC d/b/a STADIUM CLUB, et al., Defendants.

Civil Action No. 1:21-cv-03386 (CJN)

United States District Court, District of Columbia

February 22, 2023

MEMORANDUM OPINION

CARL J. NICHOLS UNITED STATES DISTRICT JUDGE

Plaintiffs Barbara Thompson, Alexis Benton, and Emani Burgess proceeding individually and on behalf of others similarly situated, filed this suit against RCX, LLC (d/b/a “Stadium Club”) and Rudolph Cline-Thomas seeking to recover wages allegedly owed to them. Specifically Plaintiffs claim that Defendants misclassified them (and others similarly situated) as independent contractors resulting in violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq., the District of Columbia Wage Payment and Collection Law (“DCWPCL”), D.C. Code §§ 32-1301 et seq., and the District of Columbia Minimum Wage Revision Act (“DCMWRA”), D.C. Code §§ 32-1001, et seq. Before the Court are two motions: Defendant Cline-Thomas's motion to dismiss the claims against him, and Plaintiffs' motion for conditional certification of a collective action under the FLSA.^[1] For the reasons discussed below, the Court will deny the motion to dismiss, and it will grant in part and deny in part the motion for conditional certification.

I. Factual Background

At various times beginning in 2018, Plaintiffs worked as exotic dancers at Stadium Club, an adult entertainment venue in the District of Columbia. See Compl. ¶¶ 11, 32-34, ECF No. 1. They claim that Defendants systematically misclassified dancers as independent contractors and, as a result, wilfully violated federal and D.C. law by failing to pay dancers minimum wage, by requiring dancers to pay “house fees,” and by forcing dancers to split their tips with other employees. Id. ¶¶ 100-132. Plaintiffs seek monetary relief through an FLSA collective action on behalf of all exotic dancers who currently work at Stadium Club or who worked there at some point during the three years preceding this lawsuit. Id. ¶ 10.

Plaintiffs name Cline-Thomas as a defendant. According to Plaintiffs, Cline-Thomas is an owner of Stadium Club and qualifies as their employer under the FLSA. Id. ¶¶ 12-13. In particular, they allege that Cline-Thomas, at all times relevant to this lawsuit, “exerted operational and management control over Stadium Club,” “controlled the nature, pay structure, and employment relationship of Plaintiffs and FLSA Class Members,” “had . . . the authority to hire and fire employees,” and “was responsible for the day-to-day affairs of Stadium Club.” Id. ¶ 13.

II. Legal Standards

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotations omitted). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Although courts must accept as true all factual allegations in a complaint, the same deference is not owed to legal conclusions. Id. Plaintiffs therefore cannot rely on “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Id. Nor are courts “bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986).

The FLSA permits plaintiffs to bring actions on their own behalf and on behalf of “other employees similarly situated.” 29 U.S.C. § 216(b). “This unique cause of action, known as a ‘collective action,' is not subject to the numerosity, commonality, and typicality rules of a class action under Rule 23.” Hunter v. Sprint Corp., 346 F.Supp.2d 113, 117 (D.D.C. 2004). Instead, courts follow a two-step process to determine whether a collective action is appropriate. First, “the court makes an initial determination to send notice to potential opt-in plaintiffs who may be similarly situated to the named plaintiffs with respect to whether a FLSA violation has occurred.” Ayala v. Tito Contractors, 12 F.Supp.3d 167, 170 (D.D.C. 2014) (cleaned up). At this stage, plaintiffs need only make “a modest factual showing,” which may be based on pleadings and affidavits, that the “named and potential plaintiffs together were victims of a common policy or plan that violated the law.” Id. (cleaned up). If such a showing is made, the court will conditionally certify the class. Then, at the second stage, “defendants may move at the close of discovery to decertify the conditional class if the record establishes that the plaintiffs are not, in fact, similarly situated.” Id.

Courts have made clear that “[t]he bar for a plaintiff at the first stage is not high.” Id.; see also Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1261 (11th Cir. 2018) (describing plaintiff's burden as “not particularly stringent,” “fairly lenient,” “flexible,” and “not heavy” (cleaned up)). To secure conditional certification, “all that is needed is some evidence, beyond pure speculation, of a factual nexus between the manner in which the employer's alleged policy affected a plaintiff and the manner in which it affected other employees.” Ayala, 12 F.Supp.3d at 170 (cleaned up). If conditional certification is granted, the court “has discretion with regard to [facilitating] notice” to potential opt-in plaintiffs. Id. at 172; see also Engers v. AT&T, Civ. A. No. 98-3660, 2007 WL 1557163, at *1 (D.N.J. May 24, 2007) (“Decisions as to whether to facilitate notice to potential plaintiffs, and how to facilitate it, are matters entrusted to the district court's discretion.”).

III. Analysis

A. Motion to Dismiss

Cline-Thomas contends that Plaintiffs fail to adequately allege that he was their employer. See Mot. to Dismiss at 5, ECF No. 19. The FLSA defines “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d).^[2] Because this definition is far from precise, courts apply the “economic reality” test to determine whether an individual qualifies as an employer under the FLSA.^[3] See Morrison v. Int'l Programs Consortium, Inc., 253 F.3d 5, 11 (D.C. Cir. 2001). The test considers “whether the putative employer has the power to hire and fire, supervise and control work schedules or conditions of employment, determine rate and method of pay, and maintain employment records.” Villar v. Flynn Architectural Finishes, Inc., 664 F.Supp.2d 94, 96 (D.D.C. 2009).

The crux of Cline-Thomas's argument is that the Complaint simply recites the factors of the economic reality test without alleging specific facts. Cline-Thomas notes that the Complaint's only substantive paragraph that specifically references him includes conclusory allegations that he directed and supervised Plaintiffs' work, determined their pay structure, held the authority to hire and fire them, and managed the day-to-day operations of Stadium Club. See Compl. ¶ 13. These claims are, in essence, mere restatements of the economic reality factors. And Cline-Thomas stresses that a complaint cannot survive a motion to dismiss if it simply parrots the elements of a cause of action. See Iqbal, 556 U.S. at 678.

But the Complaint offers more than “boilerplate allegations that [Cline-Thomas] meets the various prongs of the economic reality test.” Tracy v. NVR, Inc., 667 F.Supp.2d 244, 247 (W.D.N.Y. 2009). It also provides some supporting detail. For example, Plaintiffs allege that “Defendants,” including Cline-Thomas, “exercised significant control over Plaintiff during her shifts and would demand that Plaintiff stay until late in the morning if she worked.” Compl. ¶ 39. They also allege that “Defendants,” again including Cline-Thomas, “actually suspended, fined, fired, or otherwise disciplined entertainers for non-compliance with their rules regarding dancing.” Id. ¶ 44. And they allege that “Defendants,” including Cline-Thomas, “reserved the right to decide what a particular entertainer was allowed to wear on the premises.” Id. ¶ 45.

These allegations are more than mere recitations of the economic reality factors, and when accepted as true (as they must at this stage), they give rise to a reasonable inference that Cline-Thomas qualifies as Plaintiffs' employer under the relevant statutes. See Morrison, 253 F.3d at 11 (noting that, under the economic reality test, “[n]o one factor standing alone is dispositive and courts are directed to look at the totality of the circumstances”). The Court therefore denies Cline-Thomas's motion to dismiss.^[4]

B. Conditional Certification

Turning to Plaintiffs' motion for conditional certification, the Court concludes that the “low first-stage hurdle” is easily satisfied here. See Ayala, 12 F.Supp.3d at 170. That is because Plaintiffs have made the requisite “modest factual showing” that they and the potential opt-in plaintiffs are similarly situated and were victims of a common policy. See id.

Plaintiffs allege that they and the “FLSA Class Members who worked at Stadium Club performed precisely the same job duties,” Compl. ¶ 67, “had the same pay structure and were under the same controls,” id. ¶ 63, and “were subject to the same fees and fines,” id. ¶ 71. And they attribute their allegedly common injuries-no hourly wages forced fees, and lost tips-to Defendants' “practice” of treating all “exotic dancers at Stadium Club as independent contractors.” Thompson Decl., ¶ 7, ECF No. 26-1. Given these allegations, and consistent with how other courts have treated similar cases, conditional certification is appropriate. See, e.g., Eley v. Stadium Grp., Civ. A. No. 14-cv-1594 (KBJ), 2015 WL 5611331, at *2 (D.D.C. Sept. 22, 2015) ...