Defendants' Response Emergency Injunctive Motion, Jaguars Lawsuit

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

ERICA JONES, CRYSTAL WINTER and §

SELISHA BROOKS on Behalf of §

Themselves and on Behalf of All Others §

Similarly Situated, §

§

Plaintiffs, §

§ CIVIL ACTION NO. 3:11-cv-02743-O

v. §

§ JURY TRIAL DEMANDED

§

JGC DALLAS LLC and BRYAN SCOTT §

FOSTER, §

§

Defendants. §

______________________________________________________________________________

“DEFENDANTS’” BRIEF IN SUPPORT OF RESPONSE IN OPPOSITION TO

PLAINTIFFS’ EMERGENCY MOTION AND NOTICE OF APPLICATION FOR

PRELIMNARY AND PERMANENT INJUNCTION

_____________________________________________________________________________

Respectfully submitted,

/s/ Roger Albright, Esq /s/ Luke Lirot, Esq.

Roger Albright Luke Lirot

Texas Bar No. 009 745 80 Florida Bar No. 714836

Law Offices of Roger Albright Law Offices of Luke Lirot, P.A. 3301 Elm Street 2240 Belleair Road, Suite 190

Dallas, Texas 75226-2562 Clearwater, Florida 33764 T (214) 939-9224 T (727) 536-2100

F (214) 939-9229 F (727) 536-2110

Email: [email protected] Email: [email protected]

Subject to Admission Pro Hac Vice

Case 3:11-cv-02743-O Document 20 Filed 12/12/11 Page 1 of 45 PageID 195

mailto:[email protected]

TABLE OF CONTENTS

Table of Contents .......................................................................................................................... i-ii

Table of Authorities .................................................................................................................. iii-vii

I. Introduction ...............................................................................................................................1

II. Plaintiffs Have No Likelihood of Success Because

They Have Not Sued the Correct Parties………………………………………………………1

III. There are No “Facts” to Support any “Retaliation Claim.” .......................................................9

IV. Response to “Facts” Alleged by The Plaintiffs .......................................................................13

V. Response to “Legal argument: Injunctive relief is authorized

by the FLSA.” ..........................................................................................................................19

VI. Response to “Elements of Plaintiffs Claims” and the

“Substantial Likelihood of Success” Issues ...............................................................................20

A. Regardless of the Plaintiffs’ Allegations, They Can Not

Short Circuit Due Process with Selectively

Incomplete Declarations ...............................................................................................20

B. The Plaintiffs Efforts to “Smuggle In” the Ultimate

Issue in this Action Should Have no Bearing on the

Requested Injunctive Relief ..........................................................................................20

C. Jaguars Situation is Entirely Unique and No Other Cases

Can be Used to Determine, Prior to the Completion of Discovery, Whether any

Relevant Relationship Creates an

“Employer-Employee” Relationship Under the FLSA ................................................22

D. Plaintiffs Can Not “Smuggle In” Any Request for Injunctive

Relief Based on the FLSA ............................................................................................24

E. Plaintiffs Are Not Entitled To Injunctive Relief ...........................................................25

VII. The Responding Parties Conduct Can Not be Shown To Be Retaliatory .............................30

i.


TABLE OF CONTENTS (cont’d.)

VIII. From the Most Expansive View Of the Remaining Criteria Governing

the Granting of Injunctive Relief, Plaintiffs have Not Established

Any Such Right .........................................................................................................33

A. Plaintiffs Have Not Shown “Irreparable Harm.” .........................................................33

B. Issuing an Injunction Will Undoubtedly Harm “Defendants,”

and Others……………………………………………………………………………35

C. The Public Interest will be Harmed by Issuance of a

Preliminary Injunction ................................................................................................35

Conclusion .....................................................................................................................................36

Certificate of Service .....................................................................................................................37

ii.


TABLE OF AUTHORITIES

Cases

Allee v. Medrano, 416 U.S. 802, 828-29 (1974) ..............................................................................3

Aluminum Workers Intern. Union v. Consolidated Aluminum Corp.,

696 F.2d 437, 443 (6th Cir. 1982) ............................................................................................33

Basicomputer Corp. v. Scott, 973 F.2d 507, 511 (6th Cir.1992) ...................................................33

Baltimore Football Club v. Sup.Ct. (Ramco, Inc.),

171 Cal. App. 3d 352, 358-59 (1985) .........................................................................................3

Barrentine v. Arkansas-Best Freight System,

750 F.2d 47, 51 (8th Cir. 1984) ................................................................................................24

Bowe v. Judson C. Burnes, Inc., 137 F.2d 37, 39 (3rd Cir. 1943) .................................................24

Brock v. Casey Truck Sales 839 F.2d 872, 877-78

(2nd Cir. 1988)……………………………………………………………………….………30

Cellnet Communications, Inc. v. New Par,

291 F.Supp.2d 565 (E.D.Mich., 2003) ......................................................................................33

Clincy v. Galardi South Enterpries, et al.,

No. 1:09-CV-2082-RWS, 20011 WL 3924860 (N.D.Ga. 2011) .............................................22

Comer v. Cisneros, 37 F.3d 775, 788 (2d Cir. 1994) ......................................................................3

Conner v. Schnuck Markets, Inc.,

121 F.3d 1390, 1398-1399 (10th Cir. 1997) .............................................................................30

DeJa Vu Entertainment Enterprises of Minnesota, Inc.v. United States,

1 F. Supp. 2d 964 (D. Minn. 1998) ...........................................................................................29

Doe v. Blum, 729 F.2d 186, 190, n.4 (2d Cir. 1984) .......................................................................3

Donovan v. Brandel, 736 F. 2d 1114, 1117-19 (6th Cir. 1984) .....................................................21

Doty v. Elias, 733 F.2d 720,722-723 (10th Cir. 1984) ..................................................................27

EEO v. SunDance Rehabilitation Corp., 466 F.3d 490, 501 (6th Cir. 2006) ................................31

Graves v. Womens' Prof'l Rodeo Assoc., 907 F.2d 71, 74 (8th Cir. 1990) ..............................26, 27

iii.


h

TABLE OF AUTHORITIES (cont’d.)

Hamad v. Woodcrest Condo. Ass'n, 328 F.3d 224, 230 (6th Cir.2003) ........................................25

Harris County v. CarMax Auto Superstores, Inc., 177 F.3d 306, 312 (5th Cir. 1999) ................19

Herman v. Express Sixty-Minutes Delivery Services, Inc.,

161 F.3d 299, 303 (5th

Cir. 1998) .............................................................................................21

Hoffman-LaRoche v. Sperling, 493 U.S. 165, 171 (1989) ............................................................32

Hoving v. Transnation Title Ins. Co.,

545 F. Supp. 2d 662, 666 (E.D. Mich. 2008) ..............................................................................3

Howard v City of Springfield, Illinois,

274 F.3d 1141, 1145 (7th Cir. 2001) ..................................................................................24, 25

Imars v. Contractors Mfg. Servs.., 165 F.3d 27 (6th Cir. 1998) ....................................................22

Ivfartin v. Circle C Investments, Inc.,

No. M0-91-CA-43, 1991 WL 338239 (W.Dist. Tex. 1991) ....................................................22

Jones v. City of Monroe, 341 F.3d 474, 476 (6th Cir.2003) ..........................................................25

Knickerbocker v. City of Stockton, 81 F.3d 907, 911 (9th Cir. 1996)...........................................30

Marlar, Inc.v.United States, 151 F.3d 962, 968 (9th Cir. 1998)....................................................29

Martin v. Friba Corp., 1992 WL 486911 (N.D. Tex.) .........................................................23

Matson v. 7445, Inc., 2000 WL 1132110 (D. Or. Jan 14, 2000) ...................................................34

Mechmet v. Four Seasons Hotels, Ltd., 825F.2d 1173, 1177 (7th Cir. 1987) ..............................34

Mednick v. Albert Enterprises, Inc., 508 F.2d 297, 299 (5th Cir. 1975) .......................................21

Merrill Lynch, Pierce, Fenner & Smith Inc. v. Ran,

67 F.Supp.2d 764,781, (E.D.Mich. 1999) .................................................................................36

Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288,292 (1960)............................................20

Moreloc v. NCR Corp., 546 F.2d 682, 688 (6th Cir. 1976) rev'd on other grounds,

435 U.S. 911 (1978) .......................................................................................................................25

iv.



Neff v. Civil Air Patrol, 916 F. Supp. 710, 711-715 (S.D. Ohio 1996) .........................................27

O'Connor v. Davis, 126 F.3d 112 (2nd Cir. 1997) ..................................................................26, 27

Oregon v. Acropolis Mclaughlin, Inc., 150 Or. App. 180 (1997) ..................................................27

O’Shea v. Littleton, 414 U.S. 488, 494 (1974) ................................................................................3

Patel v. Wargo, 803 F.2d 632, 635 (11th Cir. 1986) .....................................................................28

Performance Unlimited v. Questar Publishers, Inc.,

52 F.3d 1373, 1381 (6th Cir.1995) ...........................................................................................25

Reich v. Circle C. Investment, Ltd., 998 F.2d 324, 329 (5th Cir. 1993) ........................................22

Reich v. Priba Corp., 890 F. Supp. 586, 592 (N.D. Tex. 1995) ........................................21, 22, 34

Roberg v. Phipps Estate, 156 F.2d 958, 963 (2nd Cir. 1946) ........................................................24

Sampson v. Murray, 415 U.S. 61, 90 (1974) .................................................................................33

Six Clinics Holding Corp. ,II v. Cafcomp Systems, Inc.,

119 F.3d 393, 400 (6th Cir. 1997) ............................................................................................24

Smith v. Berks Community Television,

657 F. Supp. 794-796 (E.D. Penn. 1987) ..................................................................................29

Tadros v.Coleman, 717 F. Supp. 996, 1002-1006 (S.D.N.Y. 1989) ..............................................27

Taylor Blvd.Theatre, Inc. v. United States, 1998 WL 375291, (W.O. Ky.) ..................................29

Teamsters Local Union 299 v. U.S. Truck Co. Holdings, Inc.,

87 F.Supp.2d 726, 736-737 (E.D.Mich. 2000) .........................................................................33

Tony and Susan Alamo Foundation v. Sec. of Labor, 471 U.S. 290 (1985) ..................................28

University of Texas v. Camenish, 451U.S. 390, 395 (1980) ..........................................................24

U.S. v. Indianapolis Athletic Club, Inc.,

818 F.Supp. 1250, 1253 (S.D. Ind. 1993) .................................................................................34

v.



Village of Arlington Heights v. Metro. Hous. Dev. Corp.,

429 U.S. 252, 263-64, (1977) ......................................................................................................3

Villarreal v. Woodham, 113 F.3d 202, 205 (11th Cir. 1997) .........................................................28

Walling v. Nashville Chattanooga & St. Louis Ry.,

60 F. Supp. 1004, 1007 (D. Tenn. 1945) aff'd, 155 F.2d 101

(6th Cir. 1946), 329 U.S. 696 (1946),and 330 U.S. 158 (1947) ...............................................28

Walling v. Portland Terminal Co., 330 U.S. 148, 152 (1947) .................................................28, 29

Warth v. Seldin, 422 U.S.490, 498, (1975) ......................................................................................2

Winter Family Trust v. Queen, 503 F.3d 319, 325-26 (3d Cir. 2007) .............................................3

Wolf v. Coca-Cola Co., 200 F.3d 1337, (11th Cir. 2000) .............................................................30

Statutes

29 U.S.C.A. §

201…………………………………………………………………………………………8, 24, 25

29 U.S.C. § 203(m) ........................................................................................................................12

29 U.S.C. § 211 ........................................................................................................................24, 25

29 U.S.C.A. § 212 ..........................................................................................................................26

29 U.S.C. § 215(a)(3) ...............................................................................................................19, 20

29 U.S.C. §

216(b)…………………………………………...………………………………….…………15,24

29 U.S.C. § 217 ..................................................................................................................19, 24, 25

vi.



Other Authorities

Rev. Rule. 58-220 ..........................................................................................................................33

Rev. Rule. 58-515 .........................................................................................................................33

Rev. Rul. 59-2525 ..........................................................................................................................34

Rev. Rule. 65-282 ..........................................................................................................................33

Texas Alcoholic Beverage Code, Section 11.01 ............................................................................15

Texas Alcoholic Beverage Code, Section 61.01 ............................................................................15

Texas Alcoholic Beverage Code, Section 101.31 ..........................................................................15

Texas Alcoholic Beverage Code, Section 101.70 ..........................................................................15

vii.


I. Introduction

From the outset, it is clear that Plaintiffs’ counsel are hopping on the “band-wagon”

of the numerous “dancer classification” cases in the effort to "cash in" on alleged infirmities

of an allegedly “industry standard” business model, and exploit what has been a long and

mutually beneficial, albeit “informal,” relationship, wherein performers are given a generous

opportunity to share in the prosperity generated by the popularity of “upscale gentlemen’s

clubs.” To suggest that any performer who chose to earn her living by performing at any

relevant establishment did not receive “minimum wage” for whatever time they chose to

perform is not only not inaccurate, it borders on fraud.

That being said, the named entity Defendant, JGC Dallas, LLC, has never operated

any type of “gentlemen’s club,” and is simply not a proper party, since it holds only a liquor

license with plans for future business operations. Preserving the arguments supporting

dismissal of the Complaint as to JGC Dallas, LLC, since there is no “case or controversy’

existing involving this entity, and no performer of any classification has ever performed

with, for, or aware of JGC Dallas, LLC, and the same is true of “Bryan Scott Foster,” the

following Response is provided simply to address the issues of concern and establish that the

requested for injunctive relief are both unnecessary and inappropriate.

II. Plaintiffs Have No Likelihood of Success Because They Have Not

Sued the Correct Parties

The Plaintiffs lack standing to sue “JGC Dallas, LLC,” because it has never operated

any type of business, and has no relationship with any Plaintiff. Equally as fatal is the

unsupported fashion in which the Plaintiffs have attempted to sue Bryan Scott Foster, who,

individually, has never “required and/or permitted” any Plaintiff to do anything. The generic


references to “Defendants’ conduct” do not comport with even the most basic pleading

requirement and are subject to a Motion to Dismiss, a Motion to Strike and/or a Motion for a

More Definite Statement. Plaintiffs fail to allege, and there is no evidence to support, any

direct relationship between any Plaintiff and, either “JGC Dallas LLC” or “Bryan Scott

Foster.” Plaintiffs may not simply allege that “Defendant JGC Dallas LLC is a domestic

limited liability company doing business in Dallas, Texas for the purpose of accumulating

monetary profit,” or that “Defendant Bryan Scott Foster is an individual residing in Texas,”

and where he may be served, and then, through no foundation or meaningful allegation, allege

that “Defendants” (plural, with no explanation of how or why they may be connected) are

engaged in any relevant activity.

With no specific conduct alleged against any specific Defendant, the Complaint, as a

whole fails to state any specific cause of action upon which relief may be granted. In order to

get any form of relief, especially injunctive relief, Plaintiffs must establish standing. The

question of standing is whether the litigant is entitled to have the [judiciary] decide the

merits of the dispute or of particular issues. Warth v. Seldin, 422 U.S.490, 498, (1975). The

Supreme Court made clear in Warth that the threshold question in every federal case is

“whether the plaintiff has made out a case or controversy between himself and the defendant

within the meaning of Article III.” Id. at 498.

Article III judicial power exists only to redress or otherwise to protect against injury to

the complaining party, even though the court‘s judgment may benefit others collaterally. A

federal court‘s jurisdiction, therefore, can be invoked only when the plaintiff himself/herself

has suffered “some threatened or actual injury resulting from the putatively illegal action.” Id.

at 499. No such requirement has been met in the instant action.


In a proposed class action, like the present case, the named plaintiffs must demonstrate

that they have standing to pursue the claims alleged in the complaint. See Doe v. Blum, 729

F.2d 186, 190, n.4 (2d Cir. 1984) (citing Warth, 422 U.S. at 502; O’Shea v. Littleton, 414

U.S. 488, 494 (1974) (The class action allegation adds nothing to the standing inquiry since

the named plaintiffs must allege and show that they personally have been injured, not that

injury has been suffered by other, unidentified members of the class to which they

belong and which they purport to represent); see also Comer v. Cisneros, 37 F.3d 775,

788 (2d Cir. 1994) (citing Village of Arlington Heights v. Metro. Hous. Dev. Corp., 429

U.S. 252, 263-64, (1977) (For federal courts to have jurisdiction over any of these claims,

only one named plaintiff need have standing with respect to each claims); Hoving v.

Transnation Title Ins. Co., 545 F. Supp. 2d 662, 666 (E.D. Mich. 2008) (same). Therefore, a

class action may be maintained only against defendants as to whom the class representative

has a cause of action and [s]tanding cannot be acquired through the back door of a class

action. Allee v. Medrano, 416 U.S. 802, 828-29 (1974).

Further, if the representative plaintiff has claims against some but not all of the named

defendants, the action cannot be maintained as a class action against the defendants as to which

there is no standing. See, e.g., Baltimore Football Club v. Sup.Ct. (Ramco, Inc.), 171 Cal.

App. 3d 352, 358-59 (1985) (class action filed against football teams by season ticket holders

was not viable because there was no allegation that each plaintiff had purchased tickets from

each team). Thus, in a class action, ―[t]he initial inquiry is whether the lead plaintiff

individually has standing. Winter Family Trust v. Queen, 503 F.3d 319, 325-26 (3d Cir. 2007).

In the instant action, no Plaintiff has (or can) allege any conduct attributable to JGC

Dallas, LLC, since it has never operated any business. Additionally, no Plaintiff can make any


claim against Bryan Scott Foster, individually, since there has been no allegation of how he, in

any capacity, has engaged in any conduct in the operative Complaint not alleged to have been

done, apparently jointly, with an entity that has never engaged in any business other than to

own a liquor license. In order to even remotely show an entitlement to the relief requested, the

Plaintiffs must exercise at least a modicum of “due diligence,” and research what entity may

own what Club, who the principals of that entity may be, and how there is a lawful and

legitimate foundation upon which to establish standing as to why a Plaintiff has the ability to

maintain any cause of action against any party. None of that has been done here.

Contrary to any allegation, no performer has ever been “employed” as an entertainer at

any Jaguars Gold Club (which we will also refer to as "Jaguars" or “the Club(s)”, without

waiving the challenge to Plaintiffs’ inclusion of improper parties and failure to establish

standing to sue those parties). There do exist numerous adult entertainment nightclubs in Texas

and one in Arizona operating under the name “Jaguars Gold Club,” but Plaintiffs have not

established any of the necessary elements to support their action against any of them, certainly

not by naming a non-operating entity, or an individual, Bryan Scott Foster, who, to date, has

not answered or acceded to the jurisdiction of this Court, nor been the subject of any specific

allegation. The generic reference to “Defendants” in the Complaint simply misses the mark.

It is true that, on October 14, 2011, Plaintiffs filed a putative collective action against

this non-operating entity and the alleged “related individual,” Foster, but the Plaintiffs are

cavalier and premature in presenting the allegations of their virtually incomprehensible (at least

as to “who did what”) Complaint as the basis to seek any relief on the basis of anyone

“misclassifying them as independent contractors and attendant violations of the Fair Labor

Standards Act. (Dkt. 1.)” This is not even “notice pleading.”


Also presumptuous and false is the allegation that, “Upon learning of this suit in the

middle of November 2011, Defendants swiftly hatched an illegal plan to discourage other

potential class members from joining this lawsuit.” The truth is that a number of individuals

and legal counsel related to Jaguar’s Gold Clubs, painfully aware of the unbridled avarice

running rampant in the “dancer misclassification” cases popping up all over the Country, began

the process of creating and reviewing (under appropriate privilege) documentation that would

properly memorialize the exact terms and conditions of the “relationship” between the “Club”

and the “Performer.” These documents were initiated in August of 2011, and had been

prepared and were being finalized and distributed, unfortunately, just around the time of the

filing of the instant action. See the Declaration of Kevin Richardson, Def. Exhibit A.

Especially troubling is the false description of events surrounding the implementation

of the documentation at issue by one performer, Claudia Rede, who now asserts an inaccurate

and untruthful description of the events surrounding the efforts to review and enter into an

appropriate agreement with “the Club.” It was a conscious effort to try and establish, not a

loose “arrangement” that would invite the miscarriage of justice manifest in the instant action,

but an agreement that would provide an accurate description and memorialize the “meeting of

the minds” that every performer has had with the Club, since day one. No performer has acted

as an “employee,” and no performer has desired to be classified as an “employee.”

Ms. Rede, allegedly a performer in El Paso for over 5 years, was given every

opportunity to review her contracts, and also given an opportunity, apparent on the face of the

contracts, to take the documents to counsel of her choice, and review same, at her leisure. At

that point in time, no one associated with the Club had any knowledge that she had even “opted

into” anything, so any assertion that she was being “retaliated against” would be vacuous. No


one associated with any Club knew that she had any knowledge or participation in the pending

action, and, contrary to her assertions, she was neither pressured, threatened nor coerced to do

anything.

The specifics of Claudia Rede’s interaction with “Club” representatives is set forth in

the Declarations of Gary Garcia and Fernando Robles, attached hereto as Exhibits “B” and “C.”

In actuality, when the specifics of the untrue accusations made by Ms. Rede came to light and

were diligently researched, the undersigned Counsel sent Plaintiffs’ Counsel a letter offering to

allow Ms. Rede to return, where she, just like the performers known to be involved in the

action, would be welcomed to perform and enjoy the fruits of their own dancing skills. As set

forth below, no one would ever argue that a potential, or putative class member, or even one

that unknowingly had “opted in,” could be subjected to any form of coercion or duress, or any

of the pressures that are a defense to a valid contract. What is argued is that, under the pretense

of allegations of improper conduct that never occurred, Plaintiffs’ Counsel is attempting to “try

his entire case,” before the proper parties are even before the Court, and before any responsive

pleading has ever been filed by a proper Defendant. The “pretextual” efforts of Claudia Rede,

seeking “reinstatement of her job,” is simply an attempt by Plaintiffs’ Counsel to contaminate a

reasoned and good faith exposition of the facts, and an effort to properly memorialize an

understanding held between performer and Club that has always been in place.

No “Defendants” engaged in any “illegal conduct,” and, in spite of these allegations

being totally false, there is no allegation that ties any alleged conduct to any “agent,” of any

capacity, to any “Club” operation. Ms. Rede was not “terminated,” and, after hiding her alleged

“inebriation” from the Club, she was the one that acted improperly. After the epiphany of her

“propensity for misrepresentation,” she is still welcome to return, as either an “employee,”


should that be how she wants to earn her living, or as an “independent space lessee and

licensee,” as she has earned her living, handsomely, for the last several years. The letter from

the undersigned is attached hereto as Exhibit “D.”

It is true that the documents presented to the relevant performers have serious legal

consequences. This is set forth in bold type, repeatedly, on the documents. Theses “forms” have

been in preparation since long before the filing of this action, are attached hereto as Exhibits

“E” and “F.” Performers, at their discretion, earn their living at various times, since they do so

at “places of public assembly” which operate long into the evening. Any performer choosing to

dance during the day would have been presented with the subject documents when she was

present at the Club in the daytime. Any performer choosing to dance during the night would

have been presented with the subject documents when she was present at the Club in the

evening. The effort to make the professional and courteous fashion in which these documents

were presented, explained, and offered to be taken to counsel of one’s own choosing, was not

the “midnight raid” described by opposing counsel. There was no document presented to

anyone, ever, “for signature under hostile and deceptive circumstances.” In response to this

false accusation, see the Declarations of numerous performers, also presented with similar

documents, attached hereto as composite Exhibit “G,” sub numbered.

The subject documents speak for themselves, and do provide the entertainers with two

options to describe their relationship with the Club. These documents accurately set forth the

characteristics of both “options,” which, as has been seen as a result of the “after effects” of

these “dancer misclassification” cases, the Clubs suffer and the performers invariably curse the

day they ever expressed a “coached” desire to be an “employee.” There are no, as argued by

opposing counsel, “predictably misleading statements, half-truths and outright false statements


of the law” contained in the subject documents.

Indeed, if Plaintiffs’ Counsel accurately described the distinctions between the rights

and responsibilities of “employees,” and the freedom and above average (if not huge) income

derived by the alternatives under which any Club opened it s doors to performers, it is unlikely

that even those performers tired of the physically demanding, coordinated, and incredible

difficulty of this highly skilled (independent) profession would even dream of becoming

Plaintiffs or “opting in” to this desperate “cash grab.” Indeed, as will be developed in this

action, if necessary, virtually every performer that has participated in the “dancer

misclassification” cases has regretted doing so, not only because it can ultimately end up being

a negative “financial experience,” based on the affirmative defenses available to the defendants

in any such case, but also because the loss of freedom and control a performer has when

working as an “employee” under the alternative arrangements.

Ultimately, as discussed below, no one has tried to circumvent, “[t]his court's

authority to issue, if it so deems appropriate, notice to the potential class members of their

right to seek relief via this lawsuit pursuant to 216(b) of the Fair Labor Standards Act.” The

representatives of any related Club, having had a previous relationship with the

performers at issue, are free to communicate and negotiate with any performer,

particularly prior to any class certification. There is no need for any “amendment” to the

operative Complaint to allege “retaliation,” since none has occurred. It is true that, “29

U.S.C. 201, et seq., provides courts with broad authority to issue injunctive relief and warrants

immediate corrective action by this Court in the form of a temporary restraining order and a

preliminary injunction,” but the facts of the instant case simply do not warrant such judicial

intervention.


III. There are No “Facts” to Support any “Retaliation Claim.”

True, Plaintiffs filed their Complaint on October 14, 2011, as a collective action under

the FLSA on behalf of a group of current and former entertainers who, even though all

Plaintiffs know they made well over “minimum wage,” are hoping to exploit various alleged

industry wide standards of the “performer-club” relationship to extract inequitable and

formalistic damages from any defendant they can hook into this action. No one was denied

“minimum wage and overtime pay.” Also, in an “admission against interest” undermining the

allegation that the subject “contracts” circulated among performers had been hatched in

response to the instant lawsuit, it is abundantly true that, “This is one of many cases across the

country attempting to,” exploit an entirely lawful “industry practice” of classifying exotic

dancers as something other than “employees.” This classification is not to “avoid minimum

wage and overtime pay dueunder the FLSA,” it is to reflect the freedom and “self destiny”

enjoyed, for decades, by performers who desire to make much more than “minimum wage,”

yet also have flexibility with schedules, responsibilities, and being able to perform at any

location, and in any city, in which they choose to perform. There are no “pro hac vice”

requirements for exotic dancers.

The improperly named “Defendants” herein, represented by the undersigned Roger

Albright of Dallas, Texas, and co-counsel Luke Lirot of Clearwater, Florida (who is subject to

admission pro hac vice) did reach an agreement for Defendants' responsive pleading to be due

on January 6, 2012. (See Plaintiffs’ Exhibit 5, Waiver of Service of Summons). Naturally,

Plaintiffs need to sue the proper parties before any Answer can be filed. In any event, no one

can determine if any and all “related parties” were aware of the pendency of the lawsuit, since

they are not identified, but communications had been established, and the pendency of the


action was known to counsel. What is disputed is that Claudia Rede, at any point in time prior

to the filing of her Declaration, was known by anyone even remotely related to any Defendant,

to be an “opt-in” Plaintiff who worked at Jaguars Gold Club in El Paso. She was not

“terminated,” and, as the Declarations of Garcia and Robles indicate (Exhibits “B” and “C”),

her apparent “recollection” of the “facts” is entirely unsupported, even by other performers

going through the same process. No one was “required” to sign either the "Performer

Relationship Selection Agreement" (Exhibit “E”). The second one is titled "Performer

License and Temporary Space Lease Agreement" (Exhibit "F”).

These documents speak for themselves, and do contain an acknowledgement that any

performer reviewing them “had an opportunity to consult with an attorney of my own choice

prior to making a selection of being a License and Temporary Space Lessee or employee."

Jaguars' management presented the Contract and Space Lease to the “putative class

members” in the same way it communicated any message to any performer, they were

presented with same when during a time the performer chose to come into the Club to dance.

No member of “Management” waited for any person to “put on their outfits” or, as pointedly

and mischaracterized, ad nauseam, in their pleading, “get ready for work,” a never ceasing

effort by opposing counsel to “sneak in” some description of the relationship that is not

accurate and simply self serving.

To avoid the necessity of having to respond and correct every reference to “come to

work,” or similar statements, suffice it to say that performers essentially make their own

schedules and decide who to dance for and when. No aspect of the presentation of the subject

documents was designed to disadvantage, pressure or coerce any performer in any way.

Everyone was invited to review the documents at their own pace, and even take them to their


own lawyer, if they wished. If, as in Plaintiff Rede's case she was “too inebriated” to

know what she was doing (a disturbing allegation, since no alcohol is served at the

Club in El Paso), she could have done as she wished with the documents that were

provided to her! There was no limit to any “touch screen” as a method to review or

assent to the documents. Gary Garcia never told anyone, “all of the entertainers had to sign

the contract.” He is in upper management and was fully aware of the respect and formality of

supervising the negotiations involving these important documents. It is impossible to reconcile

Mr. Garcia’s Declaration (Exhibit “B”) with Ms. Rede’s declaration, but it is clear that he does

not state that he had done “four shots” before the event at issue. What is even more problematic

is that Ms. Rede, apparently too drunk to realize much of the events of the night in question,

seems to only remember with specificity those “facts” hoped to be beneficial to Plaintiffs.

Some call it “the straight face test,” some, perhaps more crudely, call it “the smell test.” By

whatever name, Ms. Rede’s Declaration passes neither.

The Contracts speak for themselves, and, contrary to the assertions of the Plaintiffs,

they do accurately inform performers of distinctions that, if properly explained by Plaintiffs’

Counsel to their clients, would result in an exodus to the door. There are no “misstatements of

facts and law,” and the documents simply provide a description of the different aspects of being

classified as an “employee,” or enjoying the freedoms of self destiny provided by the option

allowed by “the Club.” The statements are not inaccurate, and, even though taken out of

context, are informative:

• You will be paid the minimum wage, will get reduced minimum wage for tip

credit where ·allowed, and be paid like wait staff (currently $2.35 to $5.15

per hour, or as amended by Congress, every two weeks)

• You will be required to share tips with other club employees, where the

law allows


• You will be required to turn over to the Club all Dance Performance Fees which

are charged to the customers for couch, table, VIP and shower dances (including

tips or gratuities which you receive in excess of the posted prices)

• The Club can require you to dance for Club patrons and staff for FREE.

• You may be required to fill in for any other employee who does not show up for

work no matter what his or her job responsibilities may be, i.e. waitress, door

person, janitorial, etc.

• The Club can fire you and bring criminal charges against you for overcharging

patrons.

Ridiculously, the opposing counsel argues that, “The Contract makes no reference to the

fact that, to be valid, a tip pool must provide for a fair distribution of all tips from each

person participating in the pool. (See 29 U.S.C. § 203(m)). These documents do not imply,

“that the entertainers would be paid $2.35 per hour, have to pay their tips to the Club, would

even have to work for free, and would have to work as a janitor.” They simply set forth the terms

and conditions of working as a “tipped employee.” There is also nothing relevant about alleging,

“Jaguars makes no mention of the requirement to pay different wages for positions that do not

customarily receive tips.” The statements in the subject documents are accurate, and, as

conveniently left out, the document was clearly identified as not giving any “advice,” and, if

there were any questions, at all, on the contents of the document, the performer had the absolute

right to consult counsel of her own choice before executing same.

The Contract does contain language which purports to define the terms of individuals

employment if they are subsequently deemed to have been employees and not “independent

contractors,” giving the Defendants the right to demand monies which, until now, entertainers

have been allowed to retain, such as entertainment fees and scrip redemption amounts. This type

of set-off, regardless of whatever opposing counsel would like to argue, is a well-recognized


feature of these “dancer misclassification” cases. What apparently is most troubling to the

opposing counsel is their belief that, by signing the “Space Lease,” a performer could arguably

be “opting out of this collective action lawsuit” by agreeing to arbitrate all matters pursuant

an arbitration clause that waives their right to participate in a class or collective action lawsuit

such as this one. These types of arbitration clauses have been upheld, and, to the extent that no

class has been certified in this action, there is no impediment to communicating with the

“putative class members,” as shown below. To alleviate any concern of the Plaintiffs, a notice of

the pending suit can be circulated, and the option can be made to either acknowledge, or

disavow, those portions of the subject documents that may call for arbitration or waive any

participation in any class action, in the subject documents they may have signed.

The Court can clearly fashion, with the fair input of the parties, a notice, if deemed

appropriate, that would be “timely, informative and accurate.” Notice, fairness and equity are

desired by any (appropriately named) Defendant as much as that purportedly sought by the

Plaintiffs.

IV. Response to “Facts” Alleged by The Plaintiffs

Plaintiffs and opt-in Plaintiffs may have performed at various Clubs, but whether they

were “employed as entertainers” is sharply at issue. There is nothing sufficient in the Complaint

to base any claim that anything happened at “Defendants'” adult entertainment nightclub,” since

there is no such thing. The coached and selectively created declarations are not entirely accurate.

There were no “job duties,” and performers, not surprisingly, performed, when they wished, and

for whom they wished. While the Clubs put out “advertising and marketing,” performers

could have asked to have been included in any advertising, and, based on new technological

developments, many performers are believed to have advertised their presence at any Club


through “social media,” or through other means. Music selection was also open to request, and

any performer could make requests or suggestions to the DJ for the music they chose to dance to.

If no performer availed themselves of these actions, that is no basis to allege “control” over these

things. Club layout was a function of the status of pre-existing structures and building codes.

Any performer could request modifications in the lighting, hiring (or firing) of wait staff,

security and other employees who interact with customers. A performer could perform the hours

she chose, and “club hours” were those imposed by statute or code, not arbitrarily chosen. Club

amenities and cleanliness, cover charges and overall club atmosphere could have been the

subject of suggestions, input, or demands from any performer, but none were made.

These generic issues do not make the subject performers “employees,” and these issues

are simply some of the criteria considered in other cases to make a determination. They are facts

in dispute, subject to exploration in the discovery process, and can not be determined with

finality based on a handful of self-serving declarations. In addition to these other factors,

performers could well have been urged to maintain a consistent price for dance performances, to

ensure fairness to all dancers. There could also have been a “stage rotation” to give all dancers an

equal opportunity to be seen by patrons. Dancers could take all the time they wanted to “be on

the floor,” and could let the Club know they were there to perform for themselves.

In order to sign in, entertainers would scan their fingerprint into a Club computer located

at the manager's office and would then acknowledge that they had chosen to perform that day or

evening by signing the lease form. When ready, with no pressure or demand from the Club, the

entertainer would inform the DJ that she was ready to perform, and the DJ would scheduled

her, “first come first served,” in the dance rotation, to give the individual performers equal

access to the best marketing for their individual dance performances, the center stage.


Entertainers were not required to wear anything specific, there was no “uniform,” but they were

encouraged to wear gowns or other “classy” garments to add to their own popularity and

profitability. Entertainers were also encouraged to be present during heavily publicized events,

such as “Super Tuesdays,” in order to allow performers the greatest profitability and the

greatest benefit from these special events. Obviously, performers were not allowed to sell

alcohol to the customers. Texas Alcoholic Beverage Code (TABC) prohibits:

Section 11.01-no person without permit may sell, or possess for purpose of sale, liquor in

a wet area;

Section 61.01-prohibits one to sell or possess for purposes of sale, beer without having

obtained an appropriate permit or license;

Section 101.31-sell or possess with intent to sell in dry area (such as Abilene) –a Class B

misdemeanor;

Section 101.70-a place where alcohol is sold contrary to provisions of the code is a

common nuisance . a person who maintains such a place commits a separate offense. Order of

abatement for up to one year.

Additionally, to provide performers with the security that they would not be “crowded

out,” and could still make their living “performing,” the Club would encourage performers to

“reserve” at least four days a week, to provide continuity to the performer and also try to ensure

a full and profitable Club, for all performers. The “renting” of a “VIP” room was the province of

management, but a performer could request any gratuity she desired for “VIP dances.”

Once a performer had decided she had performed as much as she wanted (there was

never any “minimum” number of performances imposed on any performer), at the conclusion of

that performer’s desired “day,” a payment was required for the “lease” of the Club facilities. The


longer the performer “leased” the facilities, the more the lease payment. Whatever Plaintiffs

may “believe,” the factors that contributed to what a performer made on a given night were the

number of customers, an issue beyond the control of the Club, and the preferences and

generosity of the customers in the club. Their comparative “wealth” can’t be stated to be a

variable, since even a “financially challenged” patron might feel inspired to give a substantial

gratuity to a performer if she gave an exceptionally “skilled” dance performance. No “Plaintiffs'

ability to make money … depended on various financial decisions made by the club pertaining to

the amount of cash that was readily available to customers.” Every Club had a “bank,” and every

Club has an ATM, and the amount of money, credit ability or any other variable in this area is

entirely at the discretion of the patron. “Plaintiffs'” ability to make money was never “influenced

by the length of time they were called to dance on stage for their ‘stage set,’ as well as by the

time at which they were called for their ‘stage set.’” Any performer could forego a stage set, and

the only variables that truly decided income were the skill, the industry and the attitude of the

performer.

Most inaccurate was the allegation that, “The entertainers were required to pay the house

mom and the disc jockey (''DJ") directly at the end of the night from their tips.” A “House

Mom” was simply an independent “vendor,” providing make-up, outfits, costumes, hair styling

or any of a range of services, directly to the performers, and for whatever the performers felt

appropriate to pay, directly, as a gratuity to this “House Mom.” There was always an amount of

“peer pressure” as to what an appropriate gratuity would be, but that was neither an amount

demanded or set by the Club. Any performer with adequate skill, desire, and attitude could

choose to perform at any Club, therefore, the statement, “Accordingly, their ability to earn

money on stage was also affected by the other workers Jaguars Gold Club chose to hire,” is a


statement that just does not make sense.

True, “The amount of money entertainers earned on stage varied depending on the

number of customers in the club at the time and the amount of cash those customers decided to

use to tip the entertainers on stage.” This is no indication of any aspect of Club “control.” What

is unequivocal, is that, for the safety of all involved, no performer was “allowed to leave the club

with customers.”

Every Club is different. Some performers have “large groups of regular customers who

came specifically to see them at the club,” and some do not. This is dependent, again, on the

skill, the industry and the attitude of the performer, as well as how long she may have performed

at any given Club, or if the performer was active in “marketing” herself in social media, the

newspaper, or any other advertising media, all available to any performer. Most long term

performers, especially those with superlative skill, industry and attitude, could attract “regular

customers,” but, again, this was a factor entirely outside of the control of the Club. No performer

was required to “pay” any “House Mom,” and any records kept by any “House Mom” could

easily have been to record her “income,” not for any reason useful to Plaintiffs. No performer

was ever required to “pay” any DJ, but industry standard is that the DJ should be given

something from the performer, especially if he played the music that performer requested. No

performer was “obligated’ to give the DJ anything, and, again, any records kept by any DJ could

easily have been to record his “income,” not for any reason useful to Plaintiffs.

Plaintiffs were urged to perform at least four nights per week, however, under no

circumstances were any performers ever “discouraged from working at other adult entertainment

clubs.” As for whether a performer had any “formal dance training,” some may have had ballet

training, some may have none, but all needed to be skilled at performing. The ability to be an


exotic dancer is a blend of physical and social skills that defies common description, but to

suggest, as Plaintiffs seem to do, that a performer simply has to be “an ordinary person of

reasonable fitness and coordination” is absolutely not accurate. Yes, “an entertainer's

appearance” can clearly be important, but it is the skill of being able to blend beauty, charm,

dancing ability, social skills, industry, attitude, and any number of a multitude of intangibles, not

unlike that of an actress, that drives the income of a performer. Not every “pretty face” can be a

successful actress, and the same is true of performers, but to suggest that any “ordinary person”

of “reasonable fitness and coordination” can be a performer is both an insult and degrading to the

performers who dedicate many hours to enhancing the variables set forth above to be successful.

Clearly, “the ultimate factors which control how much money an entertainer can make” are not

“out of the entertainers' control,” they are decided entirely by the performer!

Also, while the Club would engage in advertising and marketing, any performer could do

so as well. The same media available to the Club, including radio, print media and electronic

media, was also available to the performer, and, in light of the ability of anyone and everyone to

promote themselves to the world on social media, again, a performer’s success based on this

variable, would be self-effectuating. Any performer could have made any request to modify or

include any message in any advertising, so to complain that, “Plaintiffs had no control over

Jaguars Gold Club's decisions to market itself in this fashion, nor were they consulted about it,”

is not a valid criticism if no Plaintiff ever made such a request!

As it pertains to the website at http://www.jaguarsgold.net/., any Plaintiff could have

offered input, had they even been aware of the website, or they could have established a

“link,” had they wanted to promote themselves as in connection to the website. Plaintiffs may

allege that they, “had no control or input into the design or content of the website” but not one


h

Declaration says that any Plaintiff ever tried to modify, add to or influence the content of the

website! The website is shared by various other Clubs, but not one is “owned” by JGC Dallas

LLC or Bryan Scott Foster.

V. Response to “Legal argument: Injunctive relief is authorized by the FLSA.”

There is no argument that, “The FLSA's anti-discrimination/anti-retaliation provision”

speaks for itself. The protections of 29 U.S.C. § 215(a)(3) are valid and beneficial, but they have

no applicability to the instant action. If an employer does retaliate against an employee, the

employee is entitled to legal and equitable remedies to put him in the same position he would

have been in had the retaliation not occurred, and well should be! See 29 U.S.C. § 216(b). There

is, however, a dispute as to whether this Court can enjoin violations of the FSLA, and is

“expressly authorized to grant an injunction to prohibit violations of section 215 of the FLSA,”

as set forth in 29 U.S.C. § 217. Luckily, this issue need not be decided here, since there is no

necessity to do so.

The standards for injunctive relief are also well accepted: (I) substantial likelihood of

success on the merits; (2) substantial threat of irreparable injury; (3) threatened injury to

plaintiff must outweigh threatened injury to defendant; and (4) granting of the injunctive relief

must not disserve the public interest. See Harris County v. CarMax Auto Superstores, Inc., 177

F.3d 306, 312 (5th Cir. 1999). There is no argument with the entirety of the legal arguments

made in this section of the Plaintiffs Memorandum, but hey are all based on a falsehood. At no

point in time did anyone “retaliate” against anyone, and, to try and “bootstrap” their entire case

into the misrepresentations of Ms. Rede is wholly inappropriate! None of the factors support the

Plaintiffs’ overreaching efforts, and, both on the basis of the points and authorities below, as well

as a review of each of the equitable factors raised herein, indicate that the Plaintiffs are not


entitled to any preliminary injunction, and, quite simply, the ranting of an admittedly inebriated

exotic dancer (Ms. Rede) cannot, alone, establish any of the necessary criteria, especially when

all of the other Declarations contained in Exhibit “G” show that her “recollection” of the

circumstances surrounding the offering and distribution of the subject documents was simply not

accurate. No injunction is needed to enforce “prohibiting further action by Defendants and

reinstatement of putative class members who have been terminated,” since no such conduct has

taken place, and absolutely no performer has been “terminated,” for any reason.

VI. Response to “Elements of Plaintiffs Claims” and the “Substantial Likelihood

of Success” Issues

A. Regardless of the Plaintiffs’ Allegations, They Can Not Short Circuit

Due Process with Selectively Incomplete Declarations

Defendants do not argue that § 215(a)(3) can be “read broadly,” and that a broad

construction ensures that an employer cannot create an atmosphere of intimidation and

"prevent[s] employees' attempts to secure their rights under the Act from taking on the character

of a calculated risk."' Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288,292 (1960).

That is all well and good, but there is no convincing evidence that any “retaliation,” threats,

coercion, or any untoward conduct was committed against any performer for any reason. The

presentation of the subject documents, long in the making, in an effort to streamline any

concerns that may have existed based on long term “industry standards,” is not tantamount to any

wrongdoing.

B. The Plaintiffs Efforts to “Smuggle In” the Ultimate Issue in this

Action Should Have no Bearing on the Requested Injunctive Relief

Regardless of the broad definition of “employee” at issue, these considerations are not


relevant to the requested injunctive relief. The nature of the dispute has no bearing on whether or

not a “putative class member” was wrongfully interfered with or whether the communications

with any such individual were nefarious enough to warrant judicial intervention. As stated

vigorously throughout this Response, no such wrongful conduct has occurred. Nonetheless, since

Plaintiffs has attempted to inject this “Emergency” proceeding with an effort to argue the

ultimate issue in this case, the Responding Parties can not ignore the issue. Notably, while there

are many old decisions that have found that “dancers” are not “independent contractors,” every

case must be judged on its own facts. See Reich v. Priba Corp., 890 F. Supp. 586, 592 (N.D.

Tex. 1995) (citing Mednick v. Albert Enterprises, Inc., 508 F.2d 297, 299 (5th Cir. 1975)).

There are many tests to use to determine the “relationship.” The use of the economic reality of

the relationship. determination of employment status is only one See Herman v. Express

Sixty-Minutes Delivery Services, Inc., 161 F.3d 299, 303 (5th

Cir. 1998).

The many Fifth Circuit cases cited by Plaintiffs incorporate a number of different theories

and, candidly, while some apply to the instant scenario, some do not. In the instant action, the

performers were properly classified as “non-employees,” regardless of the “breadth” of the term.

The most cogent summary is of the multi-factored "economic realities test" in determining

whether an employment relationship exists under the FLSA is as follows. The test evaluates six

factors to determine whether, in economic reality, a worker is employed by the business where

he or she works. These factors are (1) the permanency of the relationship, (2) the degree of skill

required from the worker, (3) the extent of the worker's investment in equipment or materials, (4)

the worker's opportunity for profit or loss, depending on his or her skill, (5) the extent of the

alleged employer's right to control the manner in which the work is performed, and (6) whether

the services rendered by the worker are an integral part of the business. Donovan v. Brandel, 736


F. 2d 1114, 1117-19 (6th Cir. 1984) (cited in Imars v. Contractors Mfg. Servs.., 165 F.3d 27 (6th

Cir. 1998). No single factor is determinative, and an evaluation of the facts of each case under

this scenario is the only just way to make an ultimate determination.

C. Jaguars Situation is Entirely Unique and No Other Cases Can

be Used to Determine, Prior to the Completion of Discovery, Whether

any Relevant Relationship Creates an “Employer-Employee”

Relationship Under the FLSA.

Courts considering the question of whether entertainers employed by adult clubs have

concluded that such individuals are employees pursuant to the FLSA. Not all decisions have,

however. While the Fifth Circuit may have reached a conclusion almost 20 years ago in Reich v.

Circle C. Investment, Ltd., 998 F.2d 324, 329 (5th Cir. 1993) (upholding trial court's

determination that adult club dancers are employees within the meaning of the FLSA), this

Court can not simply “short cut” the Responding Parties’ rights to challenge this apparent

“presumption.” Regardless of what other Courts may have decided, (Martin v. Friba Corp.,

1992 WL 486911 (N.D. Tex.); Ivfartin v. Circle C Investments, Inc., No. M0-91-CA-43,

1991 WL 338239 (W.Dist. Tex. 1991); Reich v. Friba Corp., 890 F. Supp. 586, 594 (N.D.

Tex.1995) (after bench trial, finding dancers at adult night club were employees for purposes of

the Fair Labor Standards Act in case brought by the Department of Labor)), nothing in this

action, at this point in the proceedings, justifies any “premature” decision on this issue.

The recent decision in Clincy v. Galardi South Enterpries, et al., No. 1 :09-CV-2082-

RWS, 20011 WL 3924860 (N.D.Ga. 2011), simply identifies issues to be evaluated, it does not

provide an excuse to deny the instant Responding Parties their day in Court. The Plaintiff

performers were presumably under the same flexible conditions as all of the relevant performers.

The Court should note that under the terms of every performer’s engagement, any performer was


entitled to perform exotic dances at other bars, nightclubs, and other venues, regardless of the

“suggestions” to the contrary. Based on the totality of the relationship, the performers were able

to set their own schedule, able to select her own costumes (absent “suggestions” for gowns, on

infrequent occasions), props, make up, method of performance, performance techniques, and also

they were also free to determine whether or not to provide dance performances to specific

customers.

According to the arrangement with the Responding Parties, a performer pays a "base

rent" to the club for each day, or "set" she works. At any time, a performer could choose to be

treated as an employee, or not. The Court should be aware that Plaintiffs by their own conduct,

agreed to be non-employees, and, until the institution of this litigation, conducted themselves as

such. When “Defendants” were advised that the Plaintiffs had instituted this litigation, it became

apparent that Plaintiffs had determined that they no longer wished to be a “lessee” or an

independent professional entertainer.

Incredibly, Plaintiff's counsel is asking the Responding Parties, and this Court, to allow

Ms. Rede to be treated as a “lessee” for certain purposes, and as an employee for other purposes.

It seems that Plaintiffs do not truly comprehend the effect of any election to change their status

from “lessee” to employee. Now that the results of that choice have been explained to the

performers, none of them want to be treated as an employee. Plaintiffs seek an injunction, which

can only ask this Court to "preserve the status quo," yet this is utterly misleading. The status quo

would be for Ms. Rede to continue to perform as a “lessee.” In any event, she has been invited to

return and do as she wishes, under any classification she wishes, so long as she embraces the

distinctions between her flexible relationship and unlimited opportunity for income she enjoyed

previously, for several years without complaint, or be willing to be a tipped employee. The relief


that Plaintiffs ask the Court to impose will NOT preserve the status quo, but will merely further

confuse Plaintiffs’ status. See Six Clinics Holding Corp. ,II v. Cafcomp Systems, Inc., 119 F.3d

393, 400 (6th Cir. 1997) (citing University of Texas v. Camenish, 451U.S. 390, 395 (1980)

Ms. Rede has requested that she be treated as an “employee,” and the Responding

Parties were willing to treat her as such. Now she is requesting that she be treated differently

than all the other employees and differently from the all the other performers. For reasons set

forth below, this Court should deny the Plaintiffs emergency motion and should also award to

Responding Parties their costs and fees incurred in having to respond to this frivolous motion.

D. Plaintiffs Can Not “Smuggle In” Any Request for Injunctive Relief

Based on the FLSA.

At the outset, the Plaintiffs have no right to seek injunctive relief on the FLSA. Plaintiff

seeks relief under the Fair Labor Standards Act ("FLSA"), 29 U.S.C.A. § 201, et seq.

Significantly, 29 U.S.C. § 211, contains the authority of the Secretary of Labor to conduct

investigations and inspections for violations of that act and provides that, except as provided in

section 212 (29 U.S.C.A. § 212) the "Administrator" shall bring all actions under section 217 (29

U.S.C.A. § 217) to restrain violations of the act. "Courts facing the issue have uniformly held

that according to that plain language [of § 217], the right to seek injunctive relief rests

exclusively with the Secretary of Labor."' Howard v City of Springfield, Illinois, 274 F.3d 1141,

1145 (7th Cir. 2001). See also, e.g., Barrentine v. Arkansas-Best Freight System, 750 F.2d 47,

51 (8th Cir. 1984); Roberg v.Phipps Estate, 156 F.2d 958, 963 (2nd Cir. 1946); and Bowe v.

Judson C. Burnes, Inc., 137 F.2d 37, 39 (3rd Cir. 1943). It is thus the consensus of the Circuits

that injunctions to restrain violations of the act are the sole province of the Secretary of Labor.

The Sixth Circuit instructs: “In actions pursuant to [29 U.S.C.] § 216(b), individuals are


limited to seeking legal remedies and are precluded from seeking injunctive relief." Moreloc

v.NCR Corp., 546 F.2d 682, 688 (6th Cir. 1976) rev'd on other grounds, 435 U.S. 911 (1978)

(emphasis added). Hence, there is no doubt that Plaintiffs have no ability to seek an injunction

for the payment of wages under the FLSA, yet they put this erroneous argument “front and

center” before this Court to try and bring it in under the cloak of exaggerations and

misrepresentations that form the entire basis for the improperly requested “emergency relief.”

Because Plaintiffs are unable to make out any legitimate claim for retaliation, they have

lumped into their current request for an emergency injunction the relief Plaintiffs seeks in their

weakly pled Complaint. Of course, the prospective relief requested in the Complaint may only be

sought the Secretary of Labor, pursuant to 29 U.S.C. § 217. Howard, 274 F.3d at 1145.

E. Plaintiffs Are Not Entitled To Injunctive Relief

As properly identified by the Plaintiffs, and addressed in part above, when deciding

whether to grant the "extraordinary" remedy of a preliminary injunction, this Court must

consider and balance four factors: (1) whether the moving party has a strong likelihood of

success on the merits; (2) whether the moving party would suffer irreparable injury without the

preliminary injunction; (3) whether issuance of the preliminary injunction would cause

substantial harm to others; and (4) whether the public interest would be served by issuance of the

preliminary injunction. Jones v. City of Monroe, 341 F.3d 474, 476 (6th Cir.2003) (citations

omitted). These four factors "are factors to be balanced, not prerequisites that must be met."

Hamad v. Woodcrest Condo. Ass'n, 328 F.3d 224, 230 (6th Cir.2003). A district court must

make specific findings concerning each of the four factors unless fewer are dispositive of the

issue. Performance Unlimited v. Questar Publishers, Inc., 52 F.3d 1373, 1381 (6th Cir.1995).

Plaintiffs here meet NONE of the above requirements. Further, when balancing these factors, it


is clear that the Plaintiffs are not entitled to injunctive relief.

What is crucial and dispositive of the status of the performers at issue here is the simple

fact that no one related to the Responding Parties “pays” any performer, and they did not, and

do not, pav performers any remuneration. Rather, the performers pav the club for the right to be

able to utilize the club premises for their entertainment services. This is evidenced by Plaintiffs’

own declarations. This fact becomes legally significant because of what is generally referred to

as the "antecedent question" of employment; that being the agreement to work for another for

pay. Courts recognize that, while the payment of wages or a salary does not, per se, establish an

employment relationship, it is a mandatory factor- a precondition, if you will- in which to find

the existence of such a relationship.

The most succinct description of this doctrine is found in O'Connor v. Davis, 126 F.3d

112 (2nd Cir. 1997), where the Second Circuit was asked to consider the common law factors of

employment status in regard to a worker who had made a Title VII (sexual discrimination) claim.

The appellate court observed, however, that it need not engage in such an analysis because of

"the antecedent question of whether O'Connor was hired by [the defendant] for any purpose."

ld. at 115 (emphasis and clarification added). The appellate court stated:

"courts turn to common-law principles to analyze the character of an economic

relationship:

'only in situations that plausibly approximate an employment relationship.' Graves v. Womens' Prof'l Rodeo Assoc., 907 F.2d 71, 74 (8th Cir. 1990). Where no financial benefit is obtained by the purported employee from the employer, no 'plausible' employment relationship of any sort can be said to exist because although (compensation by the putative employer to the putative employee in exchange for his services is not a sufficient condition, ... it is an essential condition to the existence of an employer-employee relationship."

O'Connor, 126 F.3d at 115-116 (emphasis added, citations omitted).


Pursuant to this line of authority, the Second Circuit held that the “preliminary

question of remuneration" was dispositive of the case, and that because the plaintiff had never

received any salary or other wages from the alleged employer, she could not be held to be an

employee of the defendant. Id. at 116. The exact same conclusion should be reached here.

O'Connor was a decision that evaluated an employment relationship in the context

of the "common law" factors as are generally found in the Restatement (Second) of Agency,§

220. In addition, a more restrictive test for evaluating employment status, known as the

"economic reality test," is used for determining employment status under the FLSA. For a

comparison of these two standards, see, e.g., Oregon v. Acropolis Mclaughlin, Inc., 150 Or.

App. 180 (1997), on reconsideration. Regardless, however, cases cited in the O'Connor

decision, as well as others, establish beyond any question that lack of payment by the alleged

employer precludes a finding of employee status under either the common law or the more

restrictive economic reality test.

Cases holding that lack of remuneration bars a finding of employment in the more

restrictive economic realities context include Neff v.Civil Air Patrol, 916 F. Supp. 710, 711-715

(S.D. Ohio 1996) (in a Title VII case, the court, in utilizing the economic realities test,

concluded that the plaintiff could not be found to be an employee as a matter of law and that

the plaintiff had not produced any evidence that could lead a "reasonable juror to conclude that

she worked in expectation of compensation") (emphasis added); Tadros v.Coleman, 717 F.

Supp. 996, 1002-1006 (S.D.N.Y. 1989) (a person who is not paid for services is not

"economically dependent on the business to which [they] render [ ] service," and therefore is

not within the definition an employee under the economic realities test ) aff'd, 898 F.2d 10 (2d

Cir. 1990), quoting Doty v.Elias, 733 F.2d 720,722-723 (10th Cir. 1984); Graves v. Woman's

Professional Rodeo Assoc.,Inc., 907 F.2d 71, 72-74 (8th Cir. 1990). Further, cases directly


under the FLSA are no different. See, e.g., Patel v. Wargo, 803 F.2d 632, 635 (11th Cir. 1986)

(no employment relationship as there was no evidence that the plaintiff "contemplated

compensation for his acts"); Villarreal v. Woodham, 113 F.3d 202, 205 (11th Cir. 1997) ("in

general, work constitutes employment when there is an expectation of in-kind benefits in

exchange for services") (emphasis added); and Walling v.Nashville Chattanooga & St. Louis

Ry., 60 F. Supp. 1004, 1007 (D. Tenn. 1945), aff'd, 155 F.2d 1016 (6th Cir. 1946), 329 U.S.

696 (1946),and 330 U.S. 158 (1947) (payment of wages is "one of the indicia of a contract of

employment).

As the Supreme Court noted in consideration of the definition of "employee" as set

forth in the FLSA, that definition was"... obviously not intended to stamp all persons who,

without any express or implied compensation agreement, might work for their own advantage

on the premises of another." Walling v. Portland Terminal Co., 330 U.S. 148, 152 (1947)

(emphasis added). This issue was clarified by the decision of the Supreme Court in Tony and

Susan Alamo Foundation v. Sec. of Labor, 471 U.S. 290 (1985). At issue there were alleged

volunteer "associates" of an evangelical foundation. These workers received "no cash salaries,

but the Foundation provide[d] them with food, clothing, shelter and other benefits." ld. at 292.

The Court began its analysis by observing that the question of whether the FLSA

protections applied to the "associates" was governed by a two-step analysis. First, the Court

had to determine if the workers or the business "enterprise" was, engaged in interstate

commerce. ld. at 295 & n. 8. Second, the compensation by the putative employer to the

putative employee in exchange for his services is not a sufficient condition, "it is an essential

condition to the existence of an employer-employee relationship," and that the court will use

the economic realities test "only in situations that plausibly approximate an employment

relationship"- since there was no payment in the case at bar, the court did not utilize the


economic realities test because the relationship did not "make it past this first cut'') (emphasis

added); and Smith v. Berks Community Television, 657 F. Supp. 794-796 (E.D. Penn. 1987)

("control" in the relationship was not dispositive in evaluating economic dependence in a Title

VII claim in order to determine whether the worker was an employee or an independent

contractor, as the worker must be "paid by" the alleged employer, which was not the case

there, and therefore no employment relationship could be found) (emphasis in original).

Associates must be found to be "employees" within the meaning of the act. ld. at 295. In

regard to this latter (and, more importantly, dispositive) issue, the Court noted:

"An individual who, 'without promise or expectation of compensation, but

solely for his personal purpose or pleasure, worked in activities carried on by

other persons either for their pleasure or profit,' is outside the sweep of the Act."

Id. (emphasis added), citing Walling, 330 U.S. at 152.

Thus, the Supreme Court concluded that the question of whether or not the associates

received remuneration would be dispositive of the question of whether those workers were

covered by the protections of the FLSA, which were "only those who engage in those activities

in expectation of compensation." 471 U.S. at 302 (emphasis added).

Finally, numerous federal decisions have verified that adult entertainment clubs need

not categorize entertainers as employees for tax and withholding purpose. In the few cases of

which counsel is aware where the IRS had determined that such entertainers were employees

and where the IRS had then ruled that the clubs were required to pay employment taxes, the

federal courts reviewing those determinations have uniformly reversed them. DeJa Vu

Entertainment Enterprises of Minnesota, Inc.v. United States, 1 F. Supp. 2d 964 (D. Minn.

1998), Taylor Blvd.Theatre, Inc. v. United States, 1998 WL 375291, (W.O. Ky.); Marlar,

Inc.v.United States, 151 F.3d 962, 968 (9th Cir. 1998).


VII. The Responding Parties Conduct Can Not be Shown To Be Retaliatory

For purposes of this motion, the question of whether Plaintiffs are likely to succeed on

the merits of her claim should be solely limited to the merits of their isolated and bogus

retaliation claim. The issue of whether Ms. Rede, the only person complaining of any issue (in

contrast to the voluminous Declarations in Exhibt G, specifying otherwise) was an independent

contractor or an employee in the past relates only to any claims for “back damages” that may be

requested in an operative Complaint. Neither the Responding Parties, nor anyone related to them,

has taken any retaliatory action against Ms. Rede or anyone.

The Plaintiff's retaliation claim fails as a matter of law because she cannot demonstrate

causation or, "but for" her engagement in a protected activity; she would have been subjected

to the injuries alleged. "In demonstrating causation, the plaintiff must prove that the adverse

action would not have been taken 'but for' the assertion of FLSA rights." Wolf v. Coca-Cola

Co., 200 F.3d 1337, (11th Cir. 2000) (emphasis added). See also, e.g., Conner v. Schnuck

Markets, Inc., 121 F.3d 1390, 1398-1399 (10th Cir. 1997); Knickerbocker v. City of Stockton,

81 F.3d 907, 911 (9th Cir. 1996); and Brock v. Casey Truck Sales, 839 F.2d 872, 877-78 (2nd

Cir. 1988). In the instant action, no one knew that Ms. Rede had “opted in” to the suit, and

there was no knowledge that she did not want to define her apparently longstanding

relationship with the Club consistently with the “meeting of the minds” long embraced by both

sides as the true classification of he relationship.

Here, neither Ms. Rede nor any Plaintiff ever complained about their non-employee

status to management prior to instituting the litigation. Prior to filling her Complaint, no one

had expressed any desire to be treated as an employee to any member of management.

Instead and quizzically, that desire was first communicated by way of Plaintiff's Class Action


I

Complaint. However, filing that Complaint was completely unnecessary. No Plaintiff needed

to assert any FLSA rights to obtain employee status. They only needed to make the free

election provided to them and every other current and prospective performer choosing that

classification on the subject documents. The employee status they received was exactly the

same as is available to every performer at the Club. Providing Plaintiffs with exactly what they

requested in accordance with generally applicable preexisting standards is not discrimination,

is not retaliation and cannot be construed as such.

In order to prevail on a retaliation claim, Plaintiff must demonstrate that the change in

the terms of her employment would be "materially adverse." EEO v. SunDance Rehabilitation

Corp., 466 F.3d 490, 501 (6th Cir. 2006). Nevertheless, Plaintiff has failed to make this

required showing. Plaintiffs will not be subject to any significant change in any responsibilities

until their employment status is finally determined by the court. Specifically, no one be

required to mop the floors or conduct any degrading activities, not has that ever occurred.

Plaintiffs have failed to demonstrate that any change in remuneration would constitute a

"material loss of benefits." SunDance, 466 F.3d at 501-502. Any performer opting to be an

employee would still be allowed to keep all the tips they receive from performing on stage and

tips received in excess of the dance fees that may be charged by the Club for private dances. In

addition, she would receive pay, just as any other tipped employee.

The standard employee working conditions as chosen by any Plaintiff will not and

cannot rise to the "objectively intolerable" standard cited by Plaintiffs counsel. In particular, it

cannot be said that such conditions would be "so difficult or unpleasant that a reasonable

person in [his] shoes would have felt compelled to resign." Furthermore, any performer that


elected to be an employee would receive the same employee opportunities and benefits in

exactly the same way as that given to every other employee at any Club.

The claims about retaliation by any Responding Party by terminating opt-in Plaintiff

Claudia Rede for refusing to sign documents that affected her rights under the FLSA are pure

fiction. There was no conditioning continued employment on the signing the Contract and

Space Lease, and, any claim that these “documents (are) void under the law because they

waive aspects of Plaintiffs' claims” has been addressed, and vitiated, by the offer to jointly

notify every performer that signed any component of the subject documents that, should they

wish, they, individually, have the option to eliminate any agreement to arbitrate or waive

participation in any “class action.” This remedial remedy does more than embrace the

“responsibility of the Court to safeguard the rights of class members in collective actions.” See

Hoffman-LaRoche v. Sperling, 493 U.S. 165, 171 (1989). This offer obviates any allegation

that, “It would have been improper for Jaguars to discourage putative class members from

joining this suit even based on truthful statements, but doing so in the middle of the night

under hostile circumstances based on false statements is outrageous,” which never happened,

under any circumstances.

Critically, under no circumstance should this Court enjoin “Defendants” from any

further distribution of the Contract agreement,” since the relief requested, i.e. the

“classification” as “employee,” is given, freely, to every potential performer. A list of every

performer who signed any “Contract and Lease Space agreement,” as well as with a list of all

individuals to whom the unsigned Contract was distributed can be shared with the Court and

with Plaintiffs, and the truth of what was explained and what was decided by each individual


performer, not the fictional account of what one inebriated dancer foist into the forefront to

enflame the Court, can be determined. If any remedy is needed, it is the fair offer of allowing

each and every performer to decide for herself whether to embrace the terms and conditions

of every “contract,” or, as offered herein, ignore any arbitration clause or waver of class

action and “jump right in.”

VIII. From the Most Expansive View Of the Remaining Criteria Governing the Granting of

Injunctive Relief, Plaintiffs have Not Established Any Such Right

A. Plaintiffs Have Not Shown “Irreparable Harm.”

In general, to obtain a preliminary injunction, the injury that would result in the absence

of the injunction must be irreparable, not merely substantial. See Sampson v. Murray, 415 U.S.

61, 90 (1974). "A plaintiff's harm is not irreparable if it is fully compensable by money

damages." Basicomputer Corp. v. Scott, 973 F.2d 507, 511 (6th Cir.1992), see Cellnet

Communications, Inc. v. New Par, 291 F.Supp.2d 565 (E.D.Mich.,2003). First, lost wages, even

those resulting in financial hardship, are not irreparable harm. See, e.g., Teamsters Local Union

299 v. U.S. Truck Co. Holdings, Inc., 87 F.Supp.2d 726, 736-737 (E.D.Mich. 2000) (citing

Aluminum Workers Intern. Union v. Consolidated Aluminum Corp., 696 F.2d 437, 443 (6th

Cir. 1982)). Second, upon information and belief, any performer may perform as an entertainer at

another gentlemen's club in the world, a feature exploited and enjoyed by many. It is

disingenuous to claim that Plaintiffs also complaint that any “mandatory fees” set by the club

and collected from the patron before the customer may enter the private dance section of the club

and before the dance may begin somehow limits a dancer’s “control.” As a general principle,

fees for services performed by an employee pursuant to the employment relationship are

included in the gross receipts of the employer and not the employee, and taxed

accordingly. See Rev. Rul. 65-282, Rev. Rul. 58-220, and Rev. Rul. 58-515. Further, treating


a mandatory and fixed fee collected before the service begins as a "tip," contravenes the

Internal Revenue Services longstanding definition of the term:

To constitute a "tip" in the commonly accepted meaning of the term, it is

inherent in the nature thereof that certain fundamental characteristics be present.

It must be presented by the customer free from compulsion; he must have the

unrestricted right to determine the amount thereof; and such amount should not

be subject of negotiation or dictate by employer policy. .. . The absence of any of

these factors creates a serious doubt as to whether the payment is really a tip

and indicates that it in fact a service charge for the use of certain facilities."

Rev. Rul. 59-2525 (emphasis added).See also, Mechmet v. Four Seasons Hotels, Ltd., 825F.2d

1173, 1177 (7th Cir. 1987) ("The plaintiffs concede that the service charge is not a tip, since it

is not discretionary with the customer."); and U.S. v. Indianapolis Athletic Club, Inc., 818

F.Supp. 1250, 1253 (S.D. Ind. 1993) ("The discretion to refuse payment is an essential element

of a tip or gratuity.")

If there is a “mandatory dance fee” set by the Club, this would be incompatible

with all the "fundamental characteristics" of a tip. First, the customer must pay the fee before

receiving a private dance, making the fee truly compulsory. The customer has no input in the

price of the dance. However, customers can (and do) freely give the performer a true tip, in any

amount, in addition to the dance fee, depending on his or her appreciation of the dance

performed.

The situation is wholly unlike that in Reich v. Priba Corp., 890 F.Supp. 586 (N.D.Tex.

1995), where the dancer and the club entered into an agreement that expressly stated the club

"shall have no right to any portion of cash sales or tips received." ld. at 595. In fact, this

situation is unlike almost all of the cases cited in Plaintiff's’ brief, as here performers are now

given a choice of electing between the well-defined options of performing as “lessees,” or

employees.


In this case, any mandatory dance fees are undoubtedly service fees that become part of

the club's gross receipts. In Matson v. 7445, Inc., 2000 WL 1132110 (D. Or. Jan 14, 2000), the

court recognized that, even under the Federal Regulations cited by the ABC York-Estes Corp.

court, mandatory dance fees charged by a club are undoubtedly service charges belonging to the

club. ("These definitions make it abundantly clear that the fixed fees collected by the [dancer]

in exchange for table dances are not 'tips."' Also noting, "in addition to these fixed fees, it is

true that the plaintiff received actual 'tips' from [the club's] patrons.") (clarification and

emphasis added). Based on the offer to allow any signatory of the “Contract” to extinguish any

agreement to arbitrate, or any waiver of any class action, the fact remains that the Plaintiffs, if

they prevail, are entitled ONLY to damages, so their injury is entirely monetary, and Plaintiffs

are not entitled injunctive relief.

B. Issuing an Injunction Will Undoubtedly Harm “Defendants,” and Others

The other performers who entertain patrons at any relevant Club are “lessees.” They

choose their basic schedules (subject to “minimum lease reservations”); they determine their

own costumes and make up; they choose their own stage names and stage personas; they

choose their own dance routines; they are free to refuse to perform for certain patrons; they are

free to develop and exploit their own fan base, including fan club activities, web page sites and

the like; they are free to perform at other clubs and venues. To grant the relief requested by

Plaintiffs would create havoc and, especially based on the offer made by the Responding

Parties to vitiate any agreement to arbitrate or any waiver of the ability to participate in any

class action, there is simply no need for any injunctive relief.

C. The Public Interest will be Harmed by Issuance of a Preliminary Injunction.

As shown above, the other performers who perform at the Club will be harmed by the


issuance of a preliminary injunction as requested by the Plaintiffs. As shown by the

Declarations in Exhibit G, the dancers who perform at the Club have been doing so pursuant to

written contracts (the Entertainer Application and Dancer Performance Lease) that render them

“lessees.” To issue an injunction that would invalidate those contracts would be contrary to the

public interest. Indeed, the public has an interest in enforcing contracts and unless courts

enforce the terms of those contracts it will be undermining the legitimate business

expectations, not only of the parties to the particular litigation, but of all contracting parties. "It

is the knowledge that valid and enforceable contracts will be enforced in courts of competent

jurisdictions which allows our competitive marketplace to thrive. Without such a rule of law,

parties could not rely on contracts to conduct their affairs." Merrill Lynch, Pierce, Fenner &

Smith Inc. v. Ran, 67 F.Supp.2d 764,781, (E.D.Mich. 1999). If this Court were to issue the

preliminary injunction as requested by the Plaintiffs here, it would essentially invalidate all of

the other contracts with all of the other performers who currently perform at any related Club,

against the wishes of those performers. Such an action cannot be in the public interest.

CONCLUSION

The “Defendants,” described herein as “Responding Parties,” since the actual named

Defendants are simply not properly named in this action, respectfully request that this

Honorable Court deny Plaintiffs’ Emergency Motion for Preliminary and Permanent

Injunction, in its entirety, and grant the Responding Parties their costs in defending this

motion.


Dated: December 12, 2011

Respectfully submitted,

/s/ Roger Albright, Esq /s/ Luke Lirot, Esq.

Roger Albright Luke Lirot

Texas Bar No. 009 745 80 Florida Bar No. 714836

Law Offices of Roger Albright Law Offices of Luke Lirot, P.A.

3301 Elm Street 2240 Belleair Road, Suite 190

Dallas, Texas 75226-2562 Clearwater, Florida 33764

T (214) 939-9224 T (727) 536-2100

F (214) 939-9229 F (727) 536-2110 Email: [email protected] Email: [email protected]

Subject to Admission Pro Hac Vice

CERTIFICATE OF SERVICE

I certify that this document was served on all parties via the Northern District’s

CM/ECF system on December 12, 2011 to the following parties:

Galvin B. Kennedy

State Bar No. 00796780

[email protected]

711 W. Alabama St.

Houston, TX 77006

Telephone: (713) 523-0001

Facsimile: (713) 523-1116

Ricardo J. Prieto

State Bar No. 24062947

[email protected]

KENNEDY HODGES, L.L.P.

711 W. Alabama St.

Houston, TX 77006

Telephone: (713) 523-0001

Facsimile: (713) 523-11

/s/ Roger Albright, Esq

Roger Albright

Texas Bar No. 009 745 80





Case 3:11-cv-02743-O Document 20-1 Filed 12/12/11 Page 1 of 3 PageID 240






Documents

Defendants' Response Emergency Injunctive Motion, Jaguars Lawsuit