Club's back pay put at $342,754

Lawyers argue liability, tips in briefs filed with U.S. court

An attorney for seven former workers at the now-defunct Peaches Gentleman's Club in Jacksonville argued Friday that the club's former owners should have to pay them $342,754.60 for denying them minimum wages during a three-year period.

The seven include four women who worked as exotic dancers and were wrongly classified as "contract workers" instead of "employees," and three others who worked as a bouncer, a disc jockey and a bartender.

The amount due was argued in a post-trial brief filed Friday by Little Rock attorney Josh Sanford, who in 2012 filed suit on behalf of the workers, naming former club owners Danny Martindill and his ex-wife, Casey Martindill, as defendants.

The Martindills and the corporation that Danny Martindill owns, Barney's Barn Inc., were found liable for violating federal wage and hour laws in a default judgment issued by U.S. District Judge Susan Webber Wright in February, after the defendants repeatedly failed to respond to court directives. Then on July 7, the judge held a hearing limited to the issue of damages -- who should pay and how much should be paid for the uncontested violations of the Fair Labor Standards Act.

Each of the plaintiffs, and both Martindills, testified.

In lieu of closing arguments, Wright asked both sides to submit written briefs by Friday. She intends to issue a written ruling after reading the final submissions but hasn't said when she expects to rule on the case.

Attorney Keith Vaughan of Jacksonville, who represents the Martindills, contended in his brief, also filed Friday, that only Barney's Barn Inc., or Danny Martindill in his official capacity only, could have been considered the "employer."

Vaughan also argued that it was clear during testimony that all the plaintiffs "made much more in tips than minimum or overtime compensation required by FLSA, so there were no actual damages."

Sanford agreed that each of the plaintiffs, who worked at the club at various times from 2009 through 2012, worked "well over" 40 hours a week. But he said the nondancer plaintiffs were paid wages that "fell below the minimum wages established by the FLSA and the AMWA," the Arkansas Minimum Wage Act, while the dancers received no wages whatsoever. In addition, Sanford said, the dancers were each required to pay the club a fee of between $25 and $50 each night they worked and should get those fees back.

Sanford argued that the Martindills should both be held individually liable as employers under the federal labor law and noted that "Where a corporate defendant is without assets or has ceased operations, Congress has crafted the FLSA in such a way that the courts may look to individuals who acted on behalf of the corporation."

He argued that because both Martindills "controlled the conditions" of the workers' employment, had the authority to direct their work and profited from the failure to pay them minimum wage, both constituted "employers" under the law "and are jointly and severably liable" for damages.

Sanford said that Danny Martindill "painted himself as an active, hands-on owner" who said he treated the dancers as independent contractors based on what he heard transpired at other strip clubs, acknowledging that he never consulted an attorney to make sure he understood the law correctly. Danny Martindill testified that his father ran the club for many years, and after his father died, the club became his.

Casey Martindill, a former exotic dancer herself who was married to Danny Martindill at the time the club was operating, had "management duties" and admitted being the "house mom" who directed the workers and enforced club rules, Sanford said. But Vaughan argued that "there was no evidence that Casey Martindill was anything other than Danny's wife."

The defense attorney also argued that Danny Martindill acted in good faith in paying workers as his father had, and as was generally done in the industry.

Sanford said that while federal law allows employers to pay a direct wage of $2.13 an hour to certain tipped employees, and then take a "tip credit" to meet the $7.25 an hour minimum wage requirement, the dancers received no wages at all, so the tip credit doesn't apply in their case. Regarding the nightly fees the dancers had to pay to perform each night, Sanford said, "the unlawful fees effectively made [the dancers'] wages less than zero."

He listed individual amounts he says the workers are due with the amounts ranging from $12,923.24 to $159,411.20.

Metro on 07/26/2014

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