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Hogan v. Cleveland Ave Restaurant Inc.

United States District Court, S.D. Ohio, Eastern Division

June 8, 2017


          Algenon L. Marbley, Judge



         This matter is before the Court on Plaintiffs' Motion for Sanctions and for a Hearing to Show Cause Why Defendants are not in Contempt (ECF No. 43), Defendants' Memorandum in Opposition (ECF No. 47), and Plaintiff's Reply in Support. (ECF No. 58.) For the reasons that follow, Plaintiff's Motion is GRANTED IN PART and DENIED IN PART. (ECF No. 43.)

         I. BACKGROUND

         This is a wage lawsuit brought against a Columbus-area adult entertainment club known as “Sirens.” (ECF No. 1; “Compl.” ¶ 30.) For the entertainment of its patrons, Sirens allegedly employs bartenders, servers, managers, DJs, exotic dancers, and security personnel. (Id.) Many employees at Sirens work in more than one of the afore-mentioned capacities. (Id. ¶ 31.) Plaintiff Jessica Hogan (“Plaintiff” or “Hogan”) worked at Sirens, primarily as a bartender who danced while acting as a bartender. During those times, Hogan was compensated as a bartender. (Id. ¶ 33.) Plaintiff also worked in various other positions at the club, including as an exotic dancer, during which times she was compensated as an exotic dancer under a separate schematic framework. (Id. ¶ 34.)

         Plaintiff now challenges a number of Defendants' pay practices under both state and federal law, including charging Plaintiff fees for the time she spends performing exotic dances, charging Plaintiff 10% on customer tips left on credit cards, and requiring Plaintiff to pay tips to non-tipped employees. (Id. ¶ 2.) Plaintiff alleges that Defendants have violated portions of 29 U.S.C. §§ 201, et seq., the Fair Labor Standards Act, Article II § 34(a) of the Ohio Constitution, and § 4113.15 of the Ohio Revised Code. (Id. ¶ 3.)

         Plaintiff additionally seeks collective/class certification to represent all Sirens dancers and non-dancers who were not paid at least regular minimum wage for all hours worked. On June 9, 2016, this Court denied without prejudice Plaintiff's Motion for Federal Rule of Civil Procedure 23 Class Certification, in order to accord Defendants, who oppose the motion, their right as a matter of law to conduct fact-finding. (ECF No. 27 at 5.)

         On March 31, 2016, Plaintiff served discovery requests on Defendants. (ECF No. 34-1.) Defendants issued a First Set of Discovery Responses on May 25, 2016. Plaintiffs then moved to compel Defendants to answer Plaintiff's discovery requests, which the Court granted in part on December 15, 2016. (ECF No. 50.) Leading up to the Court's Order granting in part Plaintiff's Motion to Compel, the Court held two phone conferences and then allowed Plaintiff to conduct a 30(b)(6) deposition to find out what evidence existed.

         During the June 27, 2016 conference, the Court instructed Defendants that they were to issue discovery responses that encompassed the entire potential putative class, not just bartenders, servers, and waitresses, which Defendants had argued were the only employees at issue. (ECF No. 31.) Then, on September 1, 2016, the Court held another phone conference where Defendants' counsel represented that his clients did not have the documents - a class list and documents showing when dancers worked - that Plaintiff had requested. On October 3, 2016, Plaintiff deposed Sirens' corporate representative Jay Nelson.

         Plaintiff contends that Defendants should be sanctioned based on information discovered during the October 3, 2016 deposition. Plaintiff's Motion for Sanctions is based on Defendants' assertion throughout discovery that they did not have information related to dancers' identities, timesheets/payroll records, or hours worked each day. However, apparently Mr. Nelson's deposition revealed that Defendants did in fact loosely track dancers' work in two ways: through “lease agreements” and through “Bubblesheets” and “Penthouse Sheets.” (Pl.'s Mot. Sanctions at 8-9, ECF No. 43.)

         The Court understands the “lease agreements” to be purported contracts between the Defendants and dancers establishing the dancers as independent contractors or renters/lessees under a lease agreement. (Id. at 5.) According to Mr. Nelson's deposition, it is Defendants' practice to destroy the lease agreements for any dancers who have not worked for a month or longer. (Nelson Dep. 110:14-111:6, ECF No. 43-7.) Until the June 27, 2016, conference Defendants continued the practice of throwing out the lease agreements. Since the conference, however, Defendants claim that they stopped destruction of the records and that they have “produced over 700 pages of documents and leases to comply with the Courts new directive.” (Defs.' Opp. at 3.) To support their position that sanctions are unwarranted, Defendants contend that they were unaware of the litigation-hold rules and that “[u]p until the June 27, 2016 status conference - Defendants were not aware they were required to alter their documentation retention policies as it pertains to leases.” (Defs.' Opp. at 3, 7.) Plaintiff on the other hand contends that Defendants did not stop destruction of the lease agreements and Bubble/Penthouse Sheets after the June 27, 2016 conference, but instead only stopped after the October 3, 2016 deposition. (Pl.'s Reply at 8-9.) After reviewing the deposition, the Court concludes that Defendants' current assertion that record destruction ceased before the deposition took place is inconsistent with Jay Nelson's testimony. (See Nelson Dep. 107:13-112:12, ECF No. 43-7.)

         The “Bubble Sheets” apparently record dancers' names, whether the dancer in question paid her “rent” to the club, how many private dances the dancer gave that night, and the friction monitor's name. (Pls.' Mot. Sanctions at 9.) Penthouse Sheets are similar but record dancers' ‘Champagne Room' performances. (Id.) Defendants' practice was to destroy the Bubble Sheets and Penthouse Sheets daily. (Id. at 10.)

         Defendants contend that the Bubble/Penthouse Sheets were not responsive to Plaintiffs' requests because they only contained dancers' stage names, which Defendants note are duplicative, and because all of the financial information contained within the sheets was uploaded into QuickBooks and preserved there. (Defs.' Opp. at 4.)

         II. ...

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