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Paige v. CD#15Cl2001, Inc.

United States District Court, D. Maryland, Southern Division

January 18, 2017

MARQUITA PAIGE, et al., Plaintiffs,
v.
CD#15CL2001, INC., Defendant.

          MEMORANDUM OPINION

          Paul W. Grimm United States District Judge.

         Plaintiff Marquita Paige filed suit against Defendant CD#15CL2001, Inc. to recover unpaid wages. Defendant has not responded to the pleadings, and Plaintiff has now filed a Motion for Default Judgment, ECF No. 9.[1] Having reviewed the filing, I find that a hearing is unnecessary. See Loc. R. 105.6. Plaintiff has shown Defendant's liability and established some of the damages she seeks. Accordingly, Plaintiff's Motion for Default Judgment will be granted in part and denied in part.

         FACTUAL AND PROCEDURAL HISTORY

         CD#15CL2001, Inc. is a Maryland corporation that operates two exotic dance clubs, Bazz & Crue Hall and X4B Luxury Club. See Compl. ¶ 2, ECF No. 1. Defendant employs exotic dancers to perform at its two locations “for the benefit of Defendant and Defendant's customers.” Id. ¶ 12. In September 2013, Paige successfully auditioned to work for Defendant as an exotic dancer. See Pl.'s Mot. 6. Paige remained employed by Defendant until May 2015. Id. at 3. Typically, she would work “about four (4) shifts per week, ” from 9:00 PM to 5:00 AM. Id. at 4. As an exotic dancer, she performed “dances on stage and privately for Defendants' clients in exchange for tips or ‘donations.'” Paige Aff. ¶ 5, Pl.'s Mot. Ex. 1, ECF No. 9-1. Paige asserts that while employed by Defendant she was never paid in wages at all. Id. ¶ 11. In fact, she was required to pay Defendant a “‘tip in' kickback as a condition precedent of starting any shift.” Id. ¶ 13. The kickback fee was typically $50.00. Id. ¶ 14. Defendant justified its compensation method by categorizing Paige as an “independent contractor.” Id. ¶ 15.

         On December 2, 2015, Paige filed a Complaint in this Court against Defendant for violations of the FLSA; the Maryland Wage and Hour Law (“MWHL”), Md. Code Ann., Lab. & Empl., § 3-401 et seq., and the Maryland Wage Payment and Collection Law (“MWPCL”), Lab. & Empl., § 3-501 et seq. On March 2, 2016, Plaintiff filed a Motion for Clerk's Entry of Default. ECF No. 6. Based on Defendant's failure to respond or otherwise defend in this proceeding, on March 30, 2016, pursuant to Rule 55(a) of the Federal Rules of Civil Procedure, the Clerk issued an Entry of Default as to the Defendant. ECF No. 7.

         DISCUSSION

         I. Legal Standard

         Rule 55 of the Federal Rules of Civil Procedure establishes a two-step process when a party applies for default judgment. First, the rule provides that “when a party … has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Following the Clerk's entry of default, “the plaintiff [then may] seek a default judgment.” Godlove v. Martinsburg Senior Towers, LP, No. 14-CV-132, 2015 WL 746934, at *1 (N.D. W.Va. Feb. 20, 2015); see Fed. R. Civ. P. 55(b). “The Fourth Circuit has a ‘strong policy' that ‘cases be decided on their merits.'” S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 420 (D. Md. 2005) (citing Dow v. Jones, 232 F.Supp.2d 491, 494 (D. Md. 2002)). However, “default judgment may be appropriate when the adversary process has been halted because of an essentially unresponsive party.” Id. at 420-22.

         In determining whether to grant a motion for default judgment, the Court takes as true the well-pleaded factual allegations in the complaint, other than those pertaining to damages. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001). If the Court finds that “liability is established, [it] must then determine the appropriate amount of damages.” Agora Fin., LLC v. Samler, 725 F.Supp.2d 491, 484 (citing Ryan, 253 F.3d at 780-81). In order to do so, “the court may conduct an evidentiary hearing, or may dispense with a hearing if there is an adequate evidentiary basis in the record from which to calculate an award.” Mata v. G.O. Contractors Grp., Ltd., No. TDC-14-3287, 2015 WL 6674650, at *3 (D. Md. Oct. 29, 2015); see Fed. R. Civ. P. 55(b).

         II. Liability

         A. Employee Determination Under the FLSA, MWHL, and MWPCL

         In order to recover under the FLSA, the MWHL, or the MWPCL, Plaintiff must first show that she was an “employee” of the Defendant. See Butler v. PP & G, Inc., No. WMN-13-430, 2013 WL 5964476, at *2 (D. Md. Nov. 7, 2013). The FLSA defines an employee as “any individual employed by an employer” and it defines “employ” as “to suffer or permit to work.”[2] 29 U.S.C. §§ 203(e)(1), (g). Though these definitions deliberately are broad, the FLSA recognizes a difference between employees, which it covers, and independent contractors, which it does not. See Schultz v. Capital Int'l Sec., Inc., 466 F.3d 298, 304 (4th Cir. 2006). Nevertheless, the Supreme Court has noted that “where the work done, in its essence, follows the usual path of an employee, putting on an ‘independent contractor' label does not take the worker from the protection of the [FLSA].” Rutherford Food Corp. v. McComb, 331 U.S. 722, 729 (1947).

         “To determine whether a worker is an employee under the FLSA, courts look to the ‘economic realities of the relationship between the worker and the putative employer.'” McFeeley v. Jackson St. Entm't, LLC, 825 F.3d 235, 241 (4th Cir. 2016) (quoting Schultz, 466 F.3d at 304). The “economic realities” test examines six factors, none of which is dispositive on its own:

(1) the degree of control that the putative employer has over the manner in which the work is performed; (2) the worker's opportunities for profit or loss dependent on his managerial skill; (3) the worker's investment in equipment or material, or his employment of other workers; (4) the degree of skill required for the work; (5) the permanence of the working relationship; and (6) the degree to which the services rendered are an integral part of the putative employer's business

Id. (quoting Schultz, 466 F.3d at 304-05). These factors first were discussed in United States v. Silk, 331 U.S. 704, 715 (1947), and therefore often are referred to as the Silk factors. “Rather than looking at one particular factor or applying these factors ‘mechanically, ' courts look at the totality of the circumstances in applying them.” Herman v. Mid-Atlantic Installation Servs., Inc., 164 F.Supp.2d 667, 671 (D. Md. 2000). Application of the test answers “whether the worker is economically dependent on the business to which he renders service or is, as a matter of economic [reality], in business for himself.” Schultz, 466 F.3d at 304 (citing Bartels v. Birmingham, 332 U.S. 126, 130 (1947)).

         1. Degree of Control

         With regard to the first factor, when determining the degree of control an employer club has over an individual dancer at the club, courts “generally look not only to the guidelines set by the club regarding the entertainers' performances and behavior, but also to the club's control over the atmosphere and clientele.” Butler, 2013 WL 5964476, at *4 (finding economic dependence where, even though club did not control the “day-to-day decisions” of its dancers, it still exercised significant control by regulating “the advertising, location, business hours, maintenance of facility, [and] aesthetics”). Courts also have found significant control where clubs establish conduct policies and control performance pricing. See McFeeley v. Jackson St. Entm't, LLC, 47 F.Supp.3d 260, 269 (D. Md. 2014), aff'd, 825 F.3d 235 (4th Cir. 2016) (finding significant ...


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