Case: 19-20567 Document: 00515660972 Page: 1 Date Filed: 12/04/2020
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
December 4, 2020
No. 19-20567 Lyle W. Cayce
Clerk
Casey Nelson; Maylene Velasco,
Plaintiffs—Appellants,
versus
Texas Sugars, Incorporated, doing business as Moments,
Defendant—Appellee.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:17-CV-2171
Before Owen, Chief Judge, and King and Engelhardt, Circuit Judges.
Per Curiam:*
Exotic dancers sued the club where they perform, alleging violations
of the Fair Labor Standards Act for failure to pay minimum and overtime
wages. After trial, the jury returned a verdict in favor of the club, finding that
the dancers were not employees within the meaning of the Fair Labor
Standards Act. We AFFIRM.
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
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No. 19-20567
I.
Defendant-appellee Texas Sugars, Inc. owns and operates Moments
(the “Club”), an adult cabaret in Pasadena, Texas, which features exotic
dancers. Plaintiffs-appellants Casey Nelson and Maylene Velasco were exotic
dancers at the Club (the “dancers”). The dancers filed suit in federal court,
alleging that Texas Sugars misclassified them as independent contractors and
failed to pay them minimum and overtime wages in violation of the Fair Labor
Standards Act (the “FLSA”). The dancers’ suit proceeded to a jury trial,
where the Club’s general manager and multiple dancers 1 testified.
Specifically, the jury heard competing testimony on a range of relevant topics
such as how the dancers were paid, the various aspects of the work
arrangement that the dancers and the Club each controlled, the relative
investments of the dancers and the Club, the skill and initiative involved in
being a dancer, and the dancers’ typical tenure at the Club.
Plainly put, after several days of testimony, the jury heard various
narratives about the dancers’ work at the Club from which to determine
whether the dancers were employees or independent contractors.
After Texas Sugars concluded its case-in-chief, the dancers moved
pursuant to Federal Rule of Civil Procedure 50 for a directed verdict as to
liability on the basis that, under our economic realities test, the dancers are
employees and not independent contractors. The district court denied the
motion. The dancers also objected to the jury instructions regarding
employee status, arguing that the question of employee status was not
appropriate to submit to the jury and that the instructions misstated the law.
The district court overruled the objections, opting instead to follow our
1
In addition to the two named dancers, six other dancers testified, three of whom
were opt-in plaintiffs and another three of whom were not.
2
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pattern instructions verbatim. Once the jury returned a verdict in favor of
Texas Sugars, the dancers moved for a new trial and renewed their motion
for a directed verdict. The district court denied the motion for a new trial.2
The dancers timely filed a notice of appeal.
II.
At bottom, this appeal is about whether the evidence adduced at trial
supports the jury’s finding that the dancers were not employees of the Club.
We conclude that the evidence supports exactly that.
We review challenges to the denial of a Rule 50 motion de novo.
Orozco v. Plackis, 757 F.3d 445, 448 (5th Cir. 2014). 3 And to be clear, where
there has been a jury trial, a Rule 50 motion “is a challenge to the legal
sufficiency of the evidence supporting the jury’s verdict.” Id. “A motion for
judgment as a matter of law should be granted if there is no legally sufficient
evidentiary basis for a reasonable jury to find for a party.” Id. In other words,
“[a] post-judgment motion for judgment as a matter of law should only be
granted when the facts and inferences point so strongly in favor of the movant
that a rational jury could not reach a contrary verdict.” Pineda v. United Parcel
Serv., Inc., 360 F.3d 483, 486 (5th Cir. 2004). To that end, we view the
2
The district court did not explicitly deny the renewed motion for a directed
verdict. But, although “[t]here are circumstances where a district judge might rationally
deny the motion[] for directed verdict . . . but grant the motion for a new trial,” Urti v.
Transp. Com. Corp., 479 F.2d 766, 769 (5th Cir. 1973), the inverse is not necessarily so. In
this case, the arguments on both the motion for a new trial and the renewed motion for a
directed verdict were such that after ruling on the motion for a new trial, the district court
was left with nothing else to resolve. See FED. R. CIV. P. 50(b) (explaining that after the
jury returns a verdict, “the movant may file a renewed motion for judgment as a matter of
law and may include an alternative or joint request for a new trial”).
3
And though Texas Sugars posits that we should review this challenge for plain
error, we disagree. The dancers preserved their challenge for appeal, and as discussed
supra, their challenge nevertheless fails under our de novo review.
3
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evidence in the light most favorable to the verdict. Orozco, 757 F.3d at 448;
Eberline v. Media Net, L.L.C., 636 F. App’x 225, 226 (5th Cir. 2016). Our
review is especially deferential where there has been a jury verdict, and we
do not engage in credibility determinations or reweigh the evidence. Orozco,
757 F.3d at 448; Eberline, 636 F. App’x at 226.
In FLSA cases for minimum wage and overtime compensation, a
plaintiff must establish that she is an employee of the alleged employer. In
determining whether a worker qualifies as an employee, we apply the
economic realities test. Specifically, we “focus on whether, as a matter of
economic reality, the worker is economically dependent upon the alleged
employer or is instead in business for [her]self.” Hopkins v. Cornerstone Am.,
545 F.3d 338, 343 (5th Cir. 2008). Five non-exhaustive factors guide our
inquiry, and no one factor is determinative: “(1) the degree of control
exercised by the alleged employer; (2) the extent of the relative investments
of the worker and the alleged employer; (3) the degree to which the worker’s
opportunity for profit or loss is determined by the alleged employer; (4) the
skill and initiative required in performing the job; and (5) the permanency of
the relationship.” Id.; see also Reich v. Circle C. Invs., Inc., 998 F.2d 324, 327
(5th Cir. 1993).
In this case, we consider whether the jury could properly determine,
“as a matter of economic reality,” that the dancers failed to establish that
they were employees. Reich, 998 F.2d at 327. We will only reject the jury’s
verdict if the facts and inferences weigh so heavily in the dancers’ favor “that
a rational jury could not reach a contrary verdict.” Id.; see also Eberline, 636
F. App’x at 226 (discussing that our review of jury verdicts is especially
deferential). For the reasons that follow, we find that there was sufficient
evidence for the jury to conclude that the dancers were not employees.
4
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First, given the fact that the dancers set their own schedule, worked
for other clubs, chose their costume and routine, decided where to perform
(onstage or offstage), kept all the money that they earned, and even chose
how much to charge customers for dances, a reasonable jury could conclude
that the Club did not exercise significant control over them. Indeed, we have
previously found that a worker’s ability to adjust his or her own schedule,
negotiate prices with customers, and keep whatever money was earned are
all factors that a reasonable jury could conclude weigh against employee
status and in favor of independent contractor status. Eberline, 636 F. App’x
at 227–28.
Second, as to the “relative investments” factor, because the dancers
provided their own costumes and makeup, the jury could conclude that this
factor, too, weighed against employee status or was neutral. Specifically,
although the Club made significant investments in, inter alia, advertising,
décor, food, and alcohol, the jury could have concluded that those
investments were not essential for the dancers to perform their work and thus
the relative investments of the Club and the dancers were not necessarily
comparable. In other words, the dancers’ ability to perform and earn money
did not depend on the Club’s décor or food and alcohol offerings. And we
have previously found that a reasonable jury could conclude that this factor
weighs against employee status where a worker provides his or her own tools
and supplies. Eberline, 636 F. App’x at 228.
Third, the jury could conclude that, although the Club determined
certain aspects about the Club, the dancers assumed the risk of profit or loss
by deciding how and when they chose to engage with customers, including
when they worked, whether they performed onstage or offstage, and what
choices they made regarding their costume and makeup. In other words, the
dancers’ risk of profit or loss was determined (at least in part) by when they
worked and how they chose to interact with and market themselves to
5
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customers. In fact, we have previously found that a reasonable jury could
conclude that this factor weighs against employee status where the worker
could set his or her own schedule and profit by how he or she chose to
“market” himself or herself and which services he or she was willing to
provide. Eberline, 636 F. App’x at 228.
Fourth, the jury could conclude that, although no specific dancing skill
was required, the dancers had to take initiative in terms of when they worked
as well as their customer interactions. Again, we have found that a jury could
conclude that this factor weighs against employee status where the worker
controls his or her schedule and can profit based on the services offered to
customers. Id. at 228–29.
Fifth, even though some of the dancers worked at the Club for years,
because the dancers had no set schedule and could pick their hours, the jury
could have concluded that this arrangement was not a permanent one. We
have previously found that arrangements that allow for movement from club
to club and lack a set term weigh against employee status. See Reich, 998 F.2d
at 328.
Finally, we note that we have also sometimes looked to whether the
worker’s services are integral to the business. Hobbs v. Petroplex Pipe &
Constr., Inc., 946 F.3d 824, 836 (5th Cir. 2020). And though the dancers
argue that this consideration weighs in their favor because, without the
dancers, the Club would just be a bar, this fact does not change our analysis.
Nor would a determination that the relative investments factor is neutral.
This is so because no one factor is determinative. Hopkins, 545 F.3d at 343;
Reich, 998 F.2d at 327; Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1043–
44 (5th Cir. 1987); see also Eberline, 636 F. App’x at 229 (upholding jury
verdict finding in favor of independent contractor status even where one of
6
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the factors favored employee status). To that end, the jury could reasonably
conclude that, on balance, the factors did not favor employee status.
III.
The dancers also challenge the jury instructions. Specifically, on
appeal, the dancers argue that the jury instructions misstated the law because
they did not accurately capture the above-mentioned factors comprising our
economic realities test. But the dancers are incorrect. Indeed, our pattern
instructions, which the district court followed verbatim, undoubtedly capture
these factors.
We review challenges to jury instructions that were properly objected
to for abuse of discretion. 4 Eastman Chem. Co. v. Plastipure, Inc., 775 F.3d
230, 240 (5th Cir. 2014).
Typically, we “afford the trial court great latitude in the framing and
structure of jury instructions.” Eastman Chem. Co., 775 F.3d at 240. “In
order to demonstrate reversible error, the party challenging the instruction
must show that the charge creates substantial and ineradicable doubt whether
the jury has been properly guided in its deliberations.” Id. In reviewing such
challenges, we “consider whether the instruction, taken as a whole, ‘is a
correct statement of the law and whether it clearly instructs jurors as to the
principles of law applicable to the factual issues confronting them.’” United
States v. Freeman, 434 F.3d 369, 377 (5th Cir. 2005). To object, a party “must
do so on the record, stating distinctly the matter objected to and the grounds
for the objection.” Fed. R. Civ. P. 51(c)(1).
4
Here, again, Texas Sugars urges us to review this challenge for plain error. But
because the dancers preserved this challenge for appeal, we decline to do so. Further, as
discussed supra, this challenge nevertheless fails under abuse of discretion.
7
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Further, we have previously held that a “district court [does] not
abuse its discretion by using a pattern jury instruction that correctly state[s]
the law.” United States v. Toure, 965 F.3d 393, 403 (5th Cir. 2020); United
States v. Sheridan, 838 F.3d 671, 673 (5th Cir. 2016) (“It is well-settled,
however, that a district court does not err by giving a charge that tracks this
Circuit’s pattern jury instructions and that is a correct statement of the
law.”) (citations omitted); see also United States v. Redd, 355 F.3d 866, 874
(5th Cir. 2003) (discussing that “on a point such as instructions to juries
there should be no difference in procedure between civil and criminal
cases”).
In this case, the district court simply used our pattern instructions
without any deviation. And these pattern instructions specifically pertain to
the question of employee status in the FLSA context. See Fifth Circuit
Pattern Jury Instruction (Civil Case) 11.26.
To be sure, when read as a whole, the instructions are not
misstatements of the law but accurately capture the employee-status inquiry.
Specifically, the jury was directed to consider who controlled the dancers’
work, how the dancers were paid, the risk or opportunity the dancers had for
profit or loss, who supplied the necessary equipment, how the services were
rendered, and how the parties understood their relationship. 5 All these
considerations are relevant to the economic realities test that we apply to this
5
To that end, the dancers’ argument that the district court abused its discretion in
failing to give an instruction on three economic realities factors—permanency of the
relationship, skill and initiative, and whether the dancers are an integral part of the Club’s
business—is unavailing. First, we emphasize that no one factor is determinative. Hopkins,
545 F.3d at 343. Second, these factors are necessarily included in our pattern instructions.
For example, even though the instructions do not use the words “relative investments” or
“permanency,” the jury was instructed to consider them because the jury was directed to
consider how the services are rendered and the ability to transfer services.
8
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question. 6 Compare Pattern Jury Instruction 11.26 with Reich, 998 F.2d at 327
(outlining our five, non-exhaustive factors that we use to guide the employee
status inquiry). And, under the economic realities test, the considered factors
are non-exhaustive. Reich, 998 F.2d at 327 (explaining that the “factors are
merely aids in determining the underlying questions”); Brock, 814 F.2d at
1043–44 (discussing that “the factors are not exhaustive”); see also Parrish v.
Premier Directional Drilling, L.P., 917 F.3d 369, 379 (5th Cir. 2019).
We note that, just because the dancers contend that a certain factor
should have favored employee status, does not necessarily mean that the
factor was framed incorrectly or even that the jury found to the contrary on a
specific factor. Based on the jury’s verdict, there is no way to know how the
jury actually weighed any one factor, and we emphasize that no one factor is
determinative. Hopkins, 545 F.3d at 343; Reich, 998 F.2d at 327; Brock, 814
F.2d at 1043–44.
Therefore, the district court did not abuse its discretion in adhering to
our pattern instructions and overruling the dancers’ objections to the jury
instructions.
IV.
For the foregoing reasons, we AFFIRM.
6
And though the dancers also argue that the specific pattern instruction, which
directs the jury to consider the parties’ intent, allows the jury to consider a factor outside
of the five commonly considered factors, we emphasize that those factors are non-
exhaustive, Brock, 814 F.2d at 1043–44, and our pattern instructions are careful to remind
the jury that no one factor is determinative, see Fifth Circuit Pattern Jury Instruction (Civil
Case) 11.26 (instructing the jury that “no single factor determines the outcome”).
9