Camacho v. 673 J.R.V. Corp d/b/a Diamond Club

Background

Sky Marlene Camacho sued 673 J.R.V. Corp., doing business as Diamond Club, and other defendants under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), alleging wage violations. Camacho danced at Diamond Club beginning in June 2021. She was paid only from customer tips, paid the House Mom at least $10 for each night she danced, and did not receive a W-2 or 1099 tax form.

The defendants moved for summary judgment, arguing that the undisputed facts established Camacho was an independent contractor rather than an employee. Summary judgment is a decision without a trial that is appropriate only when no genuine dispute over an important fact exists and the moving party is entitled to judgment under the law.

FLSA analysis

The court applied the FLSA’s “economic reality” test, which considers the overall circumstances of the working relationship. The five factors are: the club’s control over the work; the worker’s opportunity for profit or loss and investment in the business; the skill and independent initiative required; the permanence of the relationship; and whether the work is an integral part of the business.

Some facts favored independent-contractor status. Camacho made her own schedule, did not have to report when she planned to dance, could leave when she wanted, could work at other establishments, did not sign in or out, and received no training or instruction from the defendants.

Other facts favored employee status or created factual disputes. The House Mom had to approve a dancer’s appearance and makeup and could require certain clothing. Camacho and the defendants disputed whether she had to arrive by a particular time, whether she could be penalized for arriving late or performing poorly, whether she had to dance a certain number of times per hour, whether management directed her to dance with particular clients, and whether she had been terminated. The parties also disputed the importance of dancers to the club’s business.

The court rejected the argument that Camacho’s clothing, makeup, social-media promotion, and ability to attract customers established that she was an independent business owner as a matter of law. The court also found that the defendants’ investment in operating, maintaining, and promoting the club was significant compared with Camacho’s investment. Although Camacho could work elsewhere, the court treated that factor as having only modest weight in this setting.

Considering the disputed facts in Camacho’s favor, the court concluded that a reasonable jury could find that she was the defendants’ employee. The court therefore denied summary judgment on the FLSA claim.

New York Labor Law analysis

The court applied the substantially similar NYLL test, which places particular emphasis on the alleged employer’s control over the work. The relevant factors include whether the worker set her own schedule, could work elsewhere, received benefits, was on the employer’s payroll, and worked a fixed schedule.

The facts that Camacho made her own schedule, could work at other establishments, received no benefits, and was not on the defendants’ payroll favored independent-contractor status. But the House Mom’s control over Camacho’s appearance, the required payment to the House Mom, the management’s power to suspend dancers, and the disputed rules about lateness, performance, dancing requirements, client assignments, and termination could support employee status.

Because the extent of the defendants’ control was disputed, the court concluded that a reasonable jury could find Camacho was an employee under New York law. The court therefore denied summary judgment on the NYLL claim as well.

Disposition

The court denied the defendants’ motion for summary judgment. It did not decide that Camacho was an employee; it decided only that the disputed facts prevented the court from ruling, without a trial, that she was an independent contractor. The court directed the parties to appear for a telephone conference to set pretrial deadlines and directed the Clerk of Court to terminate the motion at ECF No. 53.