MCGREW v. VCG HOLDING CORP (2018)

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 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, ––– U.S. ––––, 138 S.Ct. 1612, 200 L.Ed.2d 889 (2018), would resolve the first issue, and our then-pending decision in Gaffers v. Kelly Servs., Inc., No. 16-2210, 900 F.3d 293, 2018 WL 3863422 (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, 900 F.3d 293, ––––, 2018 WL 3863422, 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, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989). Whether or how to facilitate notice, however, is within the discretion of the district court. Id. at 171, 110 S.Ct. 482. 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.

ALICE M. BATCHELDER, Circuit Judge.