Melissa McGrew v. VCG Holding Corp.

• Court: Court of Appeals for the Sixth Circuit
• Decided: August 23, 2018
• Docket: 17-5474
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 18a0432n.06

No. 17-5474

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT FILED Aug 23, 2018 MELISSA MCGREW, et al., ) DEBORAH S. HUNT, Clerk ) Plaintiffs-Appellants, ) ) ON APPEAL FROM THE v. ) UNITED STATES DISTRICT ) COURT FOR THE WESTERN VCG HOLDING CORP., et al., ) DISTRICT OF KENTUCKY ) Defendants-Appellees. ) )

BEFORE: NORRIS, BATCHELDER, and STRANCH, Circuit Judges.

ALICE M. BATCHELDER, Circuit Judge. The Plaintiffs, a group of exotic dancers

who worked at a “gentleman’s club,” attempted to bring a class action against the club, a holding

company that owned the club, and two executives (collectively “Defendants”), alleging that the

Defendants had misclassified the Plaintiffs as independent contractors rather than as employees,

resulting in violations of the Fair Labor Standards Act (“FLSA”) and certain Kentucky state

employment laws. But each of the Plaintiffs had entered into individual arbitration agreements

with the Defendants, so the district court dismissed the case and compelled individual arbitration.

The Plaintiffs appealed, raising four issues. First, whether under NLRB v. Alternative

Entertainment, Inc., 858 F.3d 393 (6th Cir. 2017), decided after the district court’s decision, the

individual arbitration agreements conflicted with the National Labor Relations Act (“NLRA”)’s

collective-action guarantees. Second, whether the individual arbitration agreements conflicted

with the FLSA’s collective-action guarantees. Third, whether the arbitrator or the district court

should initially decide whether the Plaintiffs were employees (who are covered by the NLRA and No. 17-5474, Melissa McGrew, et al. v. VCG Holding Corp., et al.

FLSA) or independent contractors (who are not covered by the NLRA or FLSA). Fourth, whether

the district court abused its discretion by enforcing individual arbitration before facilitating notice

to other potential class members pursuant to Section 216(b) of the FLSA.

We delayed deciding this case because the Supreme Court’s then-pending decision in Epic

Sys. Corp. v. Lewis, 138 S. Ct. 1612 (2018), would resolve the first issue, and our then-pending

decision in Gaffers v. Kelly Servs., Inc., No. 16-2210 (6th Cir. 2018), would resolve the second

issue. In Epic, the Supreme Court abrogated our Alternative Entertainment decision and held that

individual arbitration agreements do not conflict with the NLRA’s collective-action guarantees.

See 138 S. Ct. at 1623–32. And in Gaffers, we held that individual arbitration agreements do not

conflict with the FLSA’s collective-action guarantees. See No. 16-2210, __ F.3d __, slip op. at 2

(6th Cir. Aug. 15, 2018). Epic and Gaffers control here, and resolve the first and second issues in

this case in the Defendants’ favor. And because the holdings of Epic and Gaffers mean that

individual arbitration agreements are enforceable against both employees and independent

contractors, we need not resolve what would have been the third issue in this case if Epic and

Gaffers had gone the other way.

This leaves us with only the fourth issue, and Epic and Gaffers have made it an easy one.

In FLSA collective actions, the Supreme Court has authorized district courts to facilitate notice to

similarly situated potential plaintiffs. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 169–

74 (1989). Whether or how to facilitate notice, however, is within the discretion of the district

court. Id. at 171. The Plaintiffs cite no in-circuit authority showing that the district court abused

its discretion at the time by declining to facilitate notice to other potential plaintiffs. But even if

the district court did abuse its discretion, after Epic and Gaffers there will be no FLSA collective

action against the Defendants about which the district court could facilitate notice.

For these reasons, we AFFIRM the judgment of the district court.

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