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Equal Employment Opportunity Commission v. Danny's Restaurant, LLC

United States District Court, S.D. Mississippi, Northern Division

September 30, 2018




         Before the court is the Motion for Summary Judgment as to Liability filed by the Plaintiff, United States Equal Opportunity Employment Commission (hereafter “EEOC”) [doc. no. 81]. Defendant, Danny's of Jackson, LLC (hereafter “Danny's of Jackson” or “Defendant”) opposes the motion. The parties have completed their briefing on the motion and this court is prepared to rule.

         This lawsuit is an enforcement action brought by the EEOC under the auspices of Title VII of the Civil Rights Act of 1964[1], as amended, and the Civil Rights Act of 1991, to correct allegedly unlawful employment practices of the Defendant based on race. The suit seeks relief on behalf of Ashley Williams and a class of Black female exotic dancers (hereafter referred to collectively as ‘complainants') who worked at Danny's Downtown Cabaret (also referred to as “Danny's”) and allegedly were subjected to disparate terms and conditions of employment based on their race. The Defendant, Danny's of Jackson, is the owner of Danny's Downtown Cabaret, a “strip club” located on S. West Street in Jackson, Mississippi. Danny McGee Owens (hereafter “Owens”) is the only member of Danny's of Jackson, LLC.



         Danny's Downtown Cabaret was the subject of a previous EEOC lawsuit. Sherida Edwards, (hereafter “Edwards”), a dancer who worked for the club beginning in 2009, filed a charge with EEOC alleging that she and the other Black dancers were required to adhere to a schedule that required them to work certain days and shifts. If they missed their assigned shift, said Edwards, they were fined $25.00. White dancers, according to Edwards, were not made to comply with a schedule and were not fined for missing any certain days. White dancers, she said, could set their own schedules, choosing to work on whatever days they wanted. This schedule had the effect of limiting the number of Black dancers who worked on any given shift. Edwards filed her charge of discrimination with the EEOC in April of 2011 and an amended charge in October, 2011.

         After its investigation, EEOC made the following findings.

The Commission's investigation revealed that Respondent employed substantially fewer black dancers than white dancers, limited the number of black dancers who could perform on a single shift, and required black dancers to work an assigned schedule. The failure by black dancers to comply with that schedule resulted in financial sanctions. Respondent did not subject white dancers to the same terms and conditions of employment as Respondent imposed on black dancers. Subsequent to Charging Party filing her initial charge with the Commission on April 18, 2011, Respondent subjected her to a relentless pattern of harassment and threats. Respondent also adversely limited Charging Party's work schedule.

EEOC Determination. [doc. no. 81-9 at p. 2]

         The EEOC additionally concluded that there was reasonable cause to believe that a class of Black employees had been subjected to disparate terms and conditions of employment because of race and that the charging party had suffered realiation and constructive discharge, all in violation of Title VII. [doc. no. 81-9 at p. 2]

         On September 28, 2012, the EEOC filed suit against Baby O's Restaurant, Inc., the owner of Danny's Downtown Cabaret at that time. Equal Employment Opportunity Commission v. Baby O's Restaurant, d/b/a Danny's, Civ. No. 3:12-cv-681 (S.D Miss. Sept. 28, 2012). The suit was settled by consent decree on June 28, 2013. The EEOC filed a motion on December 18, 2014, for civil contempt against Baby O's for allegedly violating the terms of the consent decree. That motion was resolved by entry into an Amended Consent Decree on January 26, 2016. By September of that same year, EEOC had filed another motion for contempt against Baby O's for failure to comply with the Amended Consent Decree. This proceeding was also resolved by mutual agreement, resulting in a Second Amended Consent Decree in March of 2017. Tellingly, this Second Amended Consent Decree was entered into and signed by Danny McGee Owens as president of Danny's Of Jackson, LLC. Civ. No. 3:12-cv-681 [doc. no. 42].


         In August of 2013, shortly after the entry of the first consent decree in the previous suit, Ashley Williams filed her charge with the EEOC. Williams EEOC charge [doc. no. 79-17]. Williams' charge alleged that she had been discriminated against because of her race and that she was fired from her position for refusing to work at Black Diamonds. This was a strip club recently opened by Owens' son, Danny Daxon Owens (hereafter “Dax”), across the street from Danny's Downtown Cabaret. Notice of the charge was sent to Dax, Manager of Danny's Downtown Cabaret, who, in turn, informed Owens, his father. Affidavit of Daniel Daxon Owens [doc. no. 81-11]. The EEOC issued a Letter of Determination on June 2, 2016, finding reasonable cause to believe that the Defendants had violated Title VII. EEOC Letter of Determination [doc. no. 81-13].

         At the conclusion of its investigation, EEOC issued its letter of determination, dated June 1, 2016, which included the following:

Examination of the evidence revealed that Respondent treated Williams and a class of other black female entertainers in a discriminatory manner and subjected them to segregated working conditions. Specifically, Respondent assigned Charging Party and a class of black dancers to work at Black Diamonds. The assignment at Black Diamonds paid significantly less than comparative assignments at Danny's. Moreover, Charging Party and a class of blacks were subjected to harsher disciplinary action than similarly situated White entertainers in the form of excessive fines.
Based on its investigation the Commission has concluded there is reasonable cause to believe discrimination occurred because Charging Party and a class of black female employees were subjected to disparate terms and conditions of employment by Respondent in violation of Title VII.

EEOC Determination Letter [doc. no. 81-13 at p. 3]

         Efforts at conciliation failed and on July 29, 2016, the Plaintiff issued to Defendants a Notice of Failure of Conciliation. On behalf of the complainants, the EEOC filed the instant lawsuit on September 30, 2016.

         This suit initially was brought against Danny's Restaurant, LLC, as well as against Danny's of Jackson, LLC. Danny's Restaurant, LLC did not file an answer nor enter an appearance in this cause, and the Clerk of Court entered default against it on August 24, 2017, [doc. no. 41]. The only remaining Defendant is Danny's of Jackson, LLC, formerly known as Baby O's Restaurant, Inc., doing business as Danny's Downtown Cabaret.

         In this lawsuit, Plaintiff seeks, inter alia, injunctive relief; back pay with prejudgment interest for Ashley Williams, the complainant terminated by the Defendants; compensation for past and future pecuniary losses, compensation for past and future and non-pecuniary losses; and other affirmative relief to make all of the complainants whole. Plaintiff also asks for punitive damages for what it alleges to be malicious and reckless conduct.

         The EEOC filed this motion, in accordance with Rule 56 of the Federal Rules of Civil Procedure, for summary judgment as to liability on the claims asserted by the EEOC. This court has previously granted partial summary judgment motions finding that the dancers working at Danny's Downtown Cabaret are “employees” of the club as opposed to “independent contractors”, and that Danny's of Jackson, LLC is the successor in interest to Baby O's Restaurant, Inc., for purposes of liability.

         EEOC contends that it has produced direct evidence of unlawful discrimination on the basis of race and that no genuine issue of fact exists on any of the issues of liability. Danny's of Jackson opposes the motion and denies that it is liable for the alleged violations of Title VII, because, says Danny's of Jackson, the complainants did not suffer any adverse employment action and were not subjected to disparate terms and conditions of employment.


         A. THE OWNERS

         Danny McGee Owens (hereafter “Owens”), already the owner of a strip club in Memphis, Tennessee, opened a strip club in Mississippi on Lakeland Drive in Jackson. The club was later moved to the downtown Jackson area.

         Following a felony conviction, Owens was incarcerated with the Federal Bureau of Prisons from 1992 to 2016. At the time Ashley Williams filed her charge with the EEOC on August 2, 2013, Owens was in prison, and his son, Danny “Daxon” Owens, (hereafter “Dax”) was the general manager of the club, which was operating as Danny's Downtown Cabaret on South West Street in Jackson, Mississippi. Dax was the general manager during the period relevant to the complaints of discrimination sub judice. According to Michael Rayner and Owens' 30(b)(6) deposition [doc. no. 81-7], Dax was the general manager of Danny's Downtown Cabaret from 2010 until 2016. Despite being incarcerated during this period, however, Owens remained deeply involved in the operations of the club. See B. Rayner Dep. 62:25-63:1 [doc. no. 79-15 pp.18-19]; Wade Dep. 24:11-24 [doc. no. 79-14 at pp. 8-9].

         After Owens' release from prison in 2016, he formed Danny's of Jackson LLC. His son Dax was originally listed as a member of the LLC but that was later changed to reflect that Owens is the sole member. The assets of Danny's Downtown Cabaret were transferred from Baby O's Restaurant, Inc., to Danny's of Jackson. Owens subsequently replaced Dax in the management role over the club.


         Plaintiff's brief describes the physical layout of the club. Deposition testimony and declarations of former employees support this description. The Defendant does not dispute any of the description provided.

         The club has one main stage and several satellite stages where the dancers perform to music. On nights when a lot of dancers perform, they may dance in pairs on stage. They generally perform in the same order as they arrived and checked in. The EEOC contends, however, that Dax or Owens oftentime would depart from this procedure when too many Black dancers appear. This matter will be discussed in more detail later. The dancers receive tips for their performances; these tips are their only compensation for the stage dances.

         Private areas are positioned around the perimeter of the club, called VIP areas. At these venues, the dancers treat their guests to more private dances, in exchange for set fees established by club management. In addition to these VIP rooms, other rooms are provided for a higher dance fee of $100 or $300. For safety purposes, these areas feature cameras.

         Customers are required to pay a fee at the door to enter. These patrons are generally seated at tables on the open floor area where they can watch the dancers and consume drinks. Dancers may circulate around the floor, in and among the tables, to solicit drinks and private dances. Waitresses also circulate among the tables to take drink orders. Managers and security personnel walk the floor as well, to keep track of the number of dances each performer is selling, and for security purposes. A small bar area with seating sells beer.

         The club schedules two shifts per day. The day shift begins in the early afternoon. Fewer customers and employees are present during the day. Night shifts are more lucrative; more customers are present. Thursday, Friday and Saturday nights are the most profitable nights. The night shift begins at 7:00 p.m. Dancers wanting to dance that night must arrive by 11:00 p.m. The club closes around 2:00 a.m., or later, on busy nights. Generally, the performers have no set work schedules, except for the schedules applied to the Black dancers, as will subsequently be discussed in more detail.

         Brittany Rayner said in her deposition:

Q: Okay. And how was it decided which dancers danced on day or night shift? How was that decided?
A: It's just who showed ...

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