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Hogan v. Cleveland Ave Restaurant Inc.
United States District Court, S.D. Ohio, Eastern Division
December 10, 2019
JESSICA HOGAN, et al., Plaintiffs,
CLEVELAND AVE RESTAURANT INC. d/b/a SIRENS, et al., Defendants.
Deavers Magistrate Judge
OPINION & ORDER
ALGENON L. MARBLEY CHIEF UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiff's Motion for
Preliminary Approval of Class Action Settlement (ECF No.
223), Defendant's Separate Motion for Preliminary
Approval of Class Action Settlement (ECF No. 228), a Joint
Motion for Leave to File Under Seal Class Member Claim
Distribution Protocol (ECF No. 224), and Plaintiff's
Unopposed Motion to File the Parties' Joint Proposed
Claim Form for Entertainer Subclass Members (ECF No. 225).
For the reasons stated below, the Court
GRANTS all four motions.
Court incorporates the relevant background facts and
settlement terms set forth in Plaintiff's Motion, which
read as follows:
2. Background of the Lawsuit and Claims
2.2. The Parties
Sirens is a Columbus-area strip club. Plaintiffs allege that
the individual defendants (Chad Sullivan, Francis Sharrak,
Michael Sharrak, Dominick Alkammo, and Jay Nelson) are
Sirens' owners, managers, or other individual
“employers, ” as defined by wage and hour laws.
Jessica Hogan is a former Sirens bartender. She also
occasionally worked there as an exotic dancer. Ms. Hogan
worked at Sirens from approximately August 2013 until June
10, 2015. DeJha Valentine is a former Sirens exotic dancer.
She worked at Sirens from approximately October 2015 until
the summer of 2017.
2.3. The Claims at Issue
Plaintiffs bring claims on behalf of two subclasses of
Sirens' workers- bartenders and entertainers. Each
subclass has separate claims.
2.3.1. Bartender Claims
Plaintiff Jessica Hogan brings several claims on behalf of
herself and similarly situated bartenders. First, she alleges
that Sirens overcharged the bartenders to process credit card
tips. Specifically, Hogan alleges that Sirens paid
approximately a fee of 2-5% to process credit card tips, but
Sirens kept 10% of all of the bartenders' credit card
tips. See Amended Complaint, Doc. 74, ¶ 56;
Amended Answer, Doc. 100, ¶ 56(a); Nelson Dep., p. 66.
Second, Hogan alleges that Sirens required bartenders who
performed three or more dances in a night to tip out
non-tipped employees, including security guards and disc
jockeys. See Amended Complaint, Doc. 74, ¶ 56.
Third, Hogan alleges that Sirens required bartenders to use
their tips to pay Sirens for any drawer shortages or
overages. See Amended Complaint, Doc. 74, ¶ 56.
Fourth, Hogan alleges that Sirens required bartenders to
purchase uniforms and outfits to work at the club,
id., and that because Sirens paid the bartenders
tipped minimum wage, these purchases necessarily dropped the
bartenders' wages below minimum wage. See 29
C.F.R. 531.35. Fifth, Hogan alleges that Sirens required
bartenders to attend mandatory, unpaid company meetings.
See Amended Complaint, Doc. 74, ¶ 56.
Plaintiffs contend that the first three pay policies violate
the FLSA's “tip credit” requirements,
see 29 U.S.C. 203(m), and that if Hogan proved any
one of these violations, she and her fellow bartenders would
be entitled to the difference between full minimum wage and
the tipped minimum wage that Sirens paid. If Hogan proved
that Sirens unlawfully required her and other bartenders to
purchase uniforms, Sirens could be liable for the cost of the
uniforms. Finally, if Hogan proved that Sirens required
employees to work off-the-clock by attending mandatory,
unpaid company meetings, Sirens would be liable for those
unpaid wages. Both the FLSA and Ohio law allow prevailing
workers to also recover additional damages and attorney's
2.3.2. Entertainer Wage Claims
Both Plaintiffs bring straightforward claims on behalf of
Sirens' entertainers. Instead of the club paying the
entertainers to work there, it is undisputed that the 2 club
charged entertainers various fees and “rent” to
work at Sirens.2 Like many clubs in Ohio, Sirens
enshrined this practice in a document called a “lease
agreement” and referred to the practice as the
“tenant system” or the “entertainer tenant
Although the lease agreement outlines Sirens' pay
practices, it is the practices, not the agreement itself,
that give rise to Plaintiffs' claims. In other words,
Plaintiffs contend it does not matter whether someone signed
the agreement. What matters, they contend, is that a woman
worked for Sirens and was not paid for her work-a policy
Sirens concedes that it applied to all entertainers. See,
e.g., Sirens 30(b)(6) dep., pp. 58, 60-62, 69-70. Sirens
also applied these practices to employees who occasionally
danced, like Plaintiff Jessica Hogan. Id., at pp.
Like other clubs that employ this practice, Sirens'
defense is that the entertainers are “tenants, ”
not employees. Plaintiffs counter that, nearly without
exception, “courts have found an employment
relationship and required the nightclub to pay its dancers a
minimum wage.'” Hart v. Rick's Cabaret
Int'l, Inc., 967 F.Supp.2d 901, 912 (S.D.N.Y. 2013).
If Plaintiffs proved that Sirens' practices violated the
law, the entertainers would be entitled to full minimum wage
for every hour they worked, plus additional FLSA and Ohio law
damages, attorney's fees, and costs.
2.3.3. Entertainer Spoliation and Sanctions
A subclass of entertainers also raised spoliation claims
against Sirens. Plaintiffs raised those claims in two
contexts, sanctions and the Ohio tort of spoliation. The
Court already granted Plaintiffs' sanctions request,
see Doc. 165, which the Sirens Defendants moved to
reconsider. The spoliation claim would be left for trial or
summary judgment, absent the settlement. Although no specific
monetary allocation is made for these claims, they will be
released by this settlement.
. . . .
2.4 Summary of Settlement Terms
This settlement encompasses both monetary and non-monetary
relief for the entertainer subclass. Defendants purport to
have fixed their pay practices with respect to the
bartenders, so the Agreement provides the bartenders with
only monetary relief.
2.4.1 Monetary Terms
Sirens has agreed to pay a total of $600, 000 to settle
Plaintiffs' claims. See Agreement § 3. This
amount is inclusive of fees, service awards, and most costs.
Id. Note that the discussion below on the money
allocated to bartenders and dancers is prior to the
deductions for fees, expenses, and service awards. Before
delving into how the money is divided and distributed under
the Settlement Agreement, it is necessary to address the
amount of the settlement fund. Plaintiffs contend that Sirens
paid the vast majority of its workers nothing for the
relevant time frame, about 6.5 years. Payroll records for
entertainers do not exist, thus, Plaintiffs are left to guess
at the potential damages. Still, Plaintiffs contend this
might provide a reasonable estimate:
20 entertainers at any one time × 20 hours worked per
week per entertainer × 52 weeks per year × 6.5
years × approximate minimum wage of $8.20 = $1, 108,
640 in unpaid wages
The damages do not stop there, however, because Ohio wage law
(Art. II, Sec. 34a) and the FLSA impose additional
multipliers on unpaid wages. If combined, Plaintiffs contend
that those multipliers would add another $3, 325, 920 in
liquidated/additional damages and that Ohio's Prompt Pay
Act could add even more ($200 per person per pay period).
Plaintiffs' antitrust claims also include damages
multipliers. None of this accounts for the fees and rent
Plaintiffs and the Entertainer Subclass members paid to
Defendants, which would act as a negative wage and, thus,
would also be recoverable (with FLSA/Ohio ...
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