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Terry v. Sapphire/Sapphire Gentlemen's Club

Supreme Court of Nevada

October 30, 2014

ZURI-KINSHASA MARIA TERRY, INDIVIDUALLY; MARLENE NUNO, INDIVIDUALLY; MICHELE COSPER, INDIVIDUALLY; SELENA DENISE PELAEZ, INDIVIDUALLY; JESSICA ANNE MORGAN, INDIVIDUALLY; AND TINA CHAREST, INDIVIDUALLY, AND ALL ON BEHALF OF CLASS OF SIMILARLY SITUATED INDIVIDUALS, Appellants,
v.
SAPPHIRE/SAPPHIRE GENTLEMEN'S CLUB, A BUSINESS ORGANIZATION FORM UNKNOWN; AND SHAC, LLC, AN ACTIVE NEVADA DOMESTIC LIMITED LIABILITY COMPANY D/B/A SAPPHIRE/SAPPHIRE GENTLEMEN'S CLUB, Respondents

Page 952

Appeal from a district court summary judgment holding that appellants were independent contractors and not employees within the meaning of NRS Chapter 608 . Eighth Judicial District Court, Clark County; Jerome T. Tao, Judge.

Christensen Law Offices, LLC, and Thomas Christensen, Las Vegas; Rusing & Lopez and Michael J. Rusing and Sean E. Brearcliffe, Tucson, Arizona; The Law Offices of Robert L. Starr and Robert L. Starr, Woodland Hills, California, for Appellants.

Greenberg Traurig, LLP, and Mark E. Ferrario and Tami D. Cowden, Las Vegas, for Respondents.

PICKERING, J., Gibbons, C.J., Parraguirre, J., Cherry, J., Hardesty, J., Douglas, J., Saitta, J.

OPINION

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BEFORE THE COURT EN BANC.

PICKERING, J.:

This case presents the question of whether appellants, performers at Sapphire Gentlemen's Club, are Sapphire employees within the meaning of NRS 608.010 and thus entitled to the minimum wages guaranteed by NRS Chapter 608. Because NRS 608.010's definition of employee hinges on NRS 608.011's definition of employer, we must decide the larger issue of when an entity is an employer under NRS 608.011, and in particular whether Sapphire is the performers' employer under that section. Given that the Legislature has long used federal minimum wage laws as a platform for this state's minimum wage scheme, that the statutes in question do not signal any intent to deviate from that course, and that for practical reasons the two schemes should be harmonious in terms of which workers are entitled to protection, we herein adopt the Fair Labor Standards Act's " economic realities" test for employment in the minimum wage context. 29 U.S.C. § § 201-219 (2012). Under that test, the performers are Sapphire's employees within the meaning of NRS 608.010. We therefore reverse and remand.

I.

Sapphire Gentlemen's Club contracts for semi-nude entertainment with approximately 6,600 performers. Under these contracts, the performers may determine their own schedules (but agree to work a minimum shift length of six hours any day they decide to work unless they advise a Sapphire employee of their early clock-out); set prices for their private performances (provided that they comply with the club's established minimum charge); control the " artistic aspects" of their performances (though the club D.J. chooses the music they dance to, and they must obey club rules as to body positioning and physical contact with customers); and perform at other venues should they wish to. The performers also agree to abide by certain " house rules," including a minimum standard of coverage by their costumes and a minimum heel height; payment of a " house fee," which ranges in amount, any night they work; and performing two dances per shift on the club stage unless they pay an " off-stage" fee.

Sapphire pays no wages to the performers; their income is dependent upon tips and dancing fees paid by Sapphire patrons. In the district court, the performers challenged this practice, claiming that they were " employees" within the meaning of NRS 608.010 and thus guaranteed a minimum wage. The district court applied a five-factor test formerly used to determine employment status under the Nevada Industrial Insurance Act, now codified at NRS Chapters 616A-616D, see Sims v. Gen. Tel & Elecs., 107 Nev. 516, 528, 815 P.2d 151, 159 (1991), overruled by Tucker v. Action Equip. & Scaffold Co., Inc., 113 Nev. 1349, 951 P.2d 1027 (1997), overruled

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by Richards v. Republic Silver State Disposal, Inc., 122 Nev. 1213, 148 P.3d 684 (2006), and found that the performers were not " employees" within the meaning of NRS Chapter 608. The district court then granted a motion for summary judgment brought by Sapphire. The performers appeal.

II.

Only an " employee" is entitled to minimum wages under NRS Chapter 608. NRS 608.250, superseded in part by constitutional amendment as recognized in Thomas v. Nev. Yellow Cab Corp., 130 Nev., 327 P.3d 518 (2014). NRS 608.010 defines employees as " persons in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed." Sapphire argues that the performers had no " contract of hire" and alternatively that the performers were not " in the service of" Sapphire. But these arguments lack merit. First, the signed entertainment agreement, which describes in detail the terms under which Sapphire permits the performers to dance at its facility, is an express contract of hire, despite that therein the parties state that they " intend that the relationship created [by the agreement] will be only that of Sapphire and Entertainer and not any other legal relationship." Particularly where, as here, remedial statutes are in play, a putative employer's self-interested disclaimers of any intent to hire cannot control the realities of an employment relationship. See Rutherford Food Corp. v. McComb, 331 U.S. 722, 729, 67 S.Ct. 1473, 91 L.Ed. 1772 (1947); Real v. Driscoll Strawberry ...


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