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Stevens v. Oval Office, LLC

United States District Court, E.D. Wisconsin

December 29, 2016

DAWN STEVENS, individually and on behalf of all others similarly situated, Plaintiff,


          William C. Griesbach, Chief Judge

         Plaintiff Dawn Stevens, an “exotic” dancer, filed a putative collective action against the Oval Office Gentlemen's Club, an adult entertainment business allegedly owned and operated by Defendants Oval Office, LLC, Jennifer DeCaster, and Gary DeCaster. Plaintiff brings this action asserting violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (FLSA), Wisconsin wage and hour laws, and Wisconsin Statute § 103.455, claiming that Defendants improperly classified her as an independent contractor instead of an employee, failed to pay minimum wages, and improperly deducted fines imposed for poor workmanship from her pay.

         On November 21, 2016, Defendants moved to dismiss Plaintiff's Wis.Stat. § 103.455 claim of illegal and unauthorized deductions from wages pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendants argue that the fines deducted from wages to incentivize good performance do not violate Wis.Stat. § 103.455. On December 12, 2016, Plaintiff filed an amended complaint to clarify her allegations regarding the wrongful deductions. In their reply brief, Defendants requested that the court extend their motion for partial dismissal to Plaintiff's amended complaint and dismiss Plaintiff's claim in the amended complaint alleging illegal and unauthorized deductions from wages in violation of Wis.Stat. § 103.455. After a review of the amended complaint, the court finds that the amended complaint does not moot Defendants' motion to dismiss because it does not resolve the legal issues raised in the motion. As such, the court will extend Defendants' motion for partial dismissal to the amended complaint. For the reasons below, however, Defendants' motion will be denied.


         The following factual allegations are taken directly from Plaintiff's amended complaint and are accepted as true for the purpose of the motion for partial dismissal. Ameritech Corp. v. McCann, 297 F.3d 471, 585 (7th Cir. 2002). The putative plaintiffs in this action are or were exotic dancers at an establishment operated by Defendants called the Oval Office Gentlemen's Club. Plaintiff claims she was deemed an “independent contractor” at the Oval Office and not paid any hourly wages. Plaintiff disputes Defendants' characterization of the dancers as independent contractors, noting that the Oval Office “retained the absolute right to control and direct the work of” the dancers since October 21, 2013. (Am. Compl. at ¶ 34, ECF No. 19.) She alleges that the Oval Office determines the fee customers are required to pay for each dance performed. A portion of the fee paid by the customer is retained by the Oval Office as a “house fee” and the balance is paid to the dancer. The entirety of the compensation received by dancers consists of the fees and tips paid by the customers.

         Plaintiff also asserts that Defendants impose various “fines” for alleged violations of the Oval Office's company policies for poor workmanship, including getting to the stage late; starting a routine late; leaving the stage before the next dancer arrives; failing to spend enough time on the floor with customers to sell additional services; failing to fully remove all clothing, except for underwear, by the end of the first song when dancing on stage; spending too much time in the dressing room; and not dressing according to the Oval Office's dress code. (Id. at ¶¶ 50, 54.) The fines assessed by Defendants have not been authorized in writing by Plaintiff, and Defendants have not provided Plaintiff the opportunity to contest them. (Id. at ¶¶ 51-52.) As a result of the foregoing allegedly illegal pay and deduction policies, Plaintiff asserts claims for unpaid minimum wages and overtime compensation under the FLSA and Wisconsin wage and hour laws, and for illegal deductions under Wis.Stat. § 103.455.


         A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted. Fed.R.Civ.P. 12(b)(6). Rule 8(a)(2) mandates that a complaint need only include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The Supreme Court has held that a complaint must contain factual allegations that “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While a plaintiff is not required to plead detailed factual allegations, he or she must plead “more than labels and conclusions.” Id. A simple, “formulaic recitation of the elements of a cause of action will not do.” Id. In evaluating a motion to dismiss, the court must view the plaintiff's factual allegations and any inferences reasonably drawn from them in a light most favorable to the plaintiff. Yasak v. Retirement Bd. of the Policemen's Annuity & Benefit Fund of Chi., 357 F.3d 677, 678 (7th Cir. 2004).


         The issue before the court is whether Defendants' deduction of Plaintiff's wages, as alleged in the amended complaint, fall within the scope of deductions prohibited under Wis.Stat. § 103.455.

         That statute provides:

No employer may make any deduction from the wages due or earned by any employee, who is not an independent contractor, for defective or faulty workmanship, lost or stolen property or damage to property, unless the employee authorizes the employer in writing to make that deduction or unless the employer and a representative designated by the employee determine that the defective or faulty workmanship, loss, theft or damage is due to the employee's negligence, carelessness, or willful and intentional conduct, or unless the employee is found guilty or held liable in a court of competent jurisdiction by reason of that negligence, carelessness, or willful and intentional conduct.

Wis. Stat. § 103.455. Plaintiff argues that the fines assessed by Defendants fall within Wis.Stat. § 103.455 because they are deductions for faulty workmanship. She contends that the definition of “workmanship” is sufficiently broad to encompass the deductions made for failing to perform exotic dances in compliance with Defendants' requirements. Conversely, Defendants argue that Plaintiff's definition of workmanship is too broad and that the statute only prohibits employers from making deductions from wages in order to recoup actual business losses. This is a question of statutory interpretation.

         Under Wisconsin law, “[t]he primary goal of statutory interpretation is to determine the legislature's intent.” Peters v. Menard, Inc., 224 Wis.2d 174, 185, 589 N.W.2d 395 (1999). The search for legislative intent begins with the plain language of the statute. State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶ 45, 271 Wis.2d 633, 681 N.W.2d 110. When the meaning of the statute cannot be discerned from the language of the statute itself, i.e., when the statute is ambiguous, resort is then made to extrinsic aids such as the statute's history, purpose, scope, and context to discern the legislature's intent. Miller v. Wal-Mart Stores, Inc., 219 Wis.2d 250, 271, 580 N.W.2d 233 (1998). “[A] statute is ambiguous if it is capable ...

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