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Rosebar v. CSWS, LLC

United States District Court, N.D. Illinois, Eastern Division

August 13, 2019

JAMISHA ROSEBAR et al., individually and on behalf of others similarly situated, Plaintiffs,


          Virginia M. Kendall United States District Judge.

         Plaintiffs Jamisha Rosebar, Breona Smith, Kenya Williams-Mix, Adrieana Powell, Shalayla Liddell, Jada Adams, Princess Wellington, and Laqueshia Miller (collectively, “the Plaintiffs”), on behalf of themselves and others similarly situated, brought this class and collective action against CSWS, LLC d/b/a Ocean Gentlemen's Club, Deborah Diaz, and Seif El Sharif (collectively, “the Defendants”) for failing to pay the plaintiffs any minimum or overtime wages for their services as dancers. The plaintiffs assert claims against the defendants under the Fair Labor Standards Act (FLSA) (Count I), the Illinois Minimum Wage Law (IMWL) (Count II), the Illinois Wage Payment and Collection Act (IWPCA) (Count III), and in the alternative, unjust enrichment under the common law of contracts (Count IV). The defendants now move to dismiss all of the plaintiffs' claims under Federal Rule of Civil Procedure 12(b)(6), arguing that they failed to state a claim upon which relief can be granted. (Dkt. 35.) For the reasons set forth below, the Court grants the defendants' motion (Dkt. 35) in part and denies it in part.


         The plaintiffs worked for the defendants as dancers at the Ocean Gentlemen's Club in Bedford Park, Illinois. (Dkt. 32 ¶ 44-64.) The Club provides adult entertainment, food, and alcoholic drinks to its customers. Id. ¶ 69. As dancers, the plaintiffs performed routines set to music streamed in the Club. Id. ¶ 72. The defendants posted videos of the dancers on websites and social media to further advertise the Club's business. Id. ¶ 71. The plaintiffs were also responsible for interacting with patrons and handling customers' tips. Id. ¶ 79.

         Deborah Diaz and Seif El Sharif operate the Club. Id. ¶¶ 30-34. For instance, Diaz handles bookkeeping, while both Diaz and El Sharif manage the staff through the implementation of a set of rules and guidelines. Id. ¶¶ 32, 35-40. Diaz and El Sharif hired and fired dancers, determined their compensation policies, and set their work schedules. Id. ¶¶ 37-38, 41-42. Both Diaz and El Sharif were often present at the Club to supervise the employees. Id. ¶¶ 31, 34-36.

         The defendants required dancers to work at least three nights a week. Id. ¶ 82. The shifts typically lasted seven to nine hours. Id. ¶ 85. In 2018, the defendants upped their mandatory minimum of three nights to four nights per week, and if a dancer wanted to work a weekend, she had to work at least one weekday first. Id. ¶¶ 83-84. Sometimes, the defendants made the plaintiffs work extra afternoon shifts when the Club was short on dancers. Id. ¶ 86. On multiple occasions, each plaintiff worked over forty hours per week. Id. ¶¶ 87-103.

         Although the plaintiffs often worked at least forty hours per week, the only compensation they received was tips from patrons of the club. Id. ¶ 81. The defendants did not pay any of their dancers, including the plaintiffs, wages or any form of compensation for their work at the club. Id. ¶ 104. The plaintiffs did not receive any overtime compensation either. Id. ¶ 105. The defendants often imposed fees and fines on the plaintiffs' tips. (Dkt. 32 ¶¶ 107-08.) The standard fees ranged from twenty to fifty dollars, and included payment to the: Club, management, house parent, disc jockey, and security/bouncers. Id. ¶ 107.

         The defendants additionally fined the plaintiffs for not coming to work, for being late to the Club or the stage, and for missing mandatory meetings. Id. ¶ 108. These penalties ranged from fifty dollars to five hundred dollars. Id. For example, Shalayla Liddell worked on her birthday. Id. ¶ 99. When no customers showed up, she asked to leave, and the defendants consequently fined her $100 even though she did not receive any tips that night. Id. The plaintiffs allege that this compensation scheme violates federal and state minimum wage laws. Id. ¶¶ 111-12. They therefore sued the defendants in this Court. (Dkt. 32.)


         In order to survive a motion to dismiss under Rule 12(b)(6), a complaint must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The Court accepts as true all well-pleaded facts alleged in the complaint and draws all reasonable inferences in the light most favorable to the plaintiff. See Twombly, 550 U.S. at 556. But the Court need not accept as true legal conclusions because “[t]hreadbare recitals of a cause of action, supported by mere conclusory statements do not suffice.” Iqbal, 129 S.Ct. at 1940.


         The plaintiffs demand relief for unpaid wages and withheld tips under the FLSA, the IMWL, the IWCPA, and the common law of contracts. The defendants moved to dismiss the plaintiffs' claims contending: (1) the plaintiffs failed to establish that the defendants are personally liable for the alleged misconduct as employers under the FLSA; (2) the defendants complied with their minimum and overtime wage obligations because what the plaintiffs call tips were actually service charges and thus counted as paid wages; (3) the IWPCA only covers wages owed to an employee under a written agreement with her; and (4) a claim for unjust enrichment is untenable when there is a written agreement in place. The Court takes each argument in turn.

         I. FLSA

         Congress enacted the FLSA to provide “fair labor standards for employees, including those marginalized workers unable to exert sufficient leverage or bargaining power to achieve adequate wages in the absence of statutory protections.” McFeeley v. Jackson Street Entertainment, LLC, 825 F.3d 235, 247 (4th Cir. 2016). To recover for a violation of the FLSA, the plaintiffs must prove that: (1) the defendants employed them; (2) the defendants' business engaged in commerce; and (3) they did not receive minimum or overtime wages. 29 U.S.C. § 206(a); see Parrish v. Premier Directional Drilling, L.P., 917 F.3d 369, 379 (5th Cir. 2019). The defendants contest the first and third elements. They ...

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