United States District Court, S.D. California
CIERRA DAVIS, on behalf of herself and on behalf of other current and former employees similarly situated et al., Plaintiffs,
RED EYE JACK'S SPORTS BAR, INC., a Nevada Corporation doing business as Cheetahs Gentleman's Club, doing business as Cheetahs Nightclub, et al., Defendants.
ORDER: (1) DENYING DEFENDANTS' MOTION TO COMPEL
ARBITRATION; (2) GRANTING IN PART DEFENDANTS' REQUEST FOR
Roger T. Benitez, United States District Judge.
this Court is Defendant Red Eye Jack's Sports Bar, Inc.
(“Cheetahs”) and Suzanne Coe's motion to
compel arbitration and stay action as to Plaintiff Cierra
Davis (“Davis”),  which Defendant Rich Buonantony
joins. (Docket Nos. 32, 34.) The motion is fully briefed. For
the reasons set for below, the Defendants' motion to
compel arbitration is DENIED, and
Defendants' request to stay the action is GRANTED
Cheetahs is an all-nude strip club. It is open seven days a
week, from 12:00 p.m. to 2:00 a.m. At all relevant times,
Defendants Suzanne Coe (“Coe”) and Rich
Buonantony (“Buonantony”) owned, operated,
controlled, and/or managed Cheetahs. Davis alleges Coe and
Buonantony are alter egos of Cheetahs, and that Buonantony is
also a managing agent of Cheetahs.
2014, Cheetahs hired Davis as an adult entertainer or dancer.
Davis worked at Cheetahs “about seven days per week,
from approximately 6:00 p.m. to 2:00 a.m.” (TAC ¶
8.) Davis alleges Defendants “refused to compensate
[her] as a dancer for her time working at the club. Among
other things, [she] never received minimum wage or any other
compensation from Cheetahs.” (Id.) Davis
generated income solely through tips and/or gratuities
received from patrons when she performed dance services.
essence, Davis alleges Defendants misclassified, and continue
to misclassify “all of their employees who work as
adult entertainers, including [Davis], as ‘independent
contractors.'” (Id. ¶ 23.) “As
a result of this uniform misclassification, [Davis] and [her]
fellow dancers were denied minimum wages required under the
FLSA and the California Labor Code and, therefore, suffered
injury and incurred financial loss.” (Id.)
Davis also alleges Cheetahs wrongfully required her to pay
“a daily ‘house fee' simply for showing up
for work, ” wrongfully “skimmed” her tips
and gratuities by requiring her to pay “fees or tip-out
a substantial percentage of all [her] daily earnings to
‘the DJ' and/or ‘door' and/or
‘manager, ” and failed to provide her meal and
rest breaks. (Id. ¶¶ 26-30.) Approximately
20% of Davis's tips and gratuities “go back to
Cheetahs.” (Id. ¶ 33.)
asserts these facts give rise to claims against Defendants
for: (1) violation of 29 U.S.C. § 206(a) (failure to pay
minimum wage under the FLSA); (2) violation of multiple
sections of the California Labor Code for failure to pay
wages, overtime, provide adequate rest and meal breaks, and
reimbursement of necessary work expenditures; and (3)
move for arbitration on the grounds that Davis agreed to
submit the claims she alleges in the TAC to binding
arbitration. Davis responds that Ninth Circuit authority
requires the Court find the arbitration agreement upon which
Defendants rely is invalid and unenforceable.
2 of the Federal Arbitration Act (“FAA”) states
A written provision in any ... contract evidencing a
transaction involving commerce to settle by arbitration a
controversy thereafter arising out of such contract or
transaction ... shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the
revocation of any contract.
U.S.C. § 2. Section 2 demonstrates “‘a
national policy favoring arbitration of claims that parties
contract to settle in that manner.” Preston v.
Ferrer, 552 U.S. 346, 352-53 (2008) (citing
Southland Corp. v. Keating, 465 U.S. 1, 10 (1984)).
Section 3 of the FAA, where an issue involved in a suit or
proceeding is referable to arbitration under an agreement in
writing, the district court “shall on application of
one of the parties stay the trial of the action until such
arbitration has been had in accordance with the terms of the
agreement . . . .” 9 U.S.C. § 3. The language is
mandatory, and district courts are required to order
arbitration on issues as to which an arbitration agreement
has been signed. Kilgore v. KeyBank, N.A.,
718 F.3d 1052, 1058(9th Cir. 2013) (citing Dean Witter
Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985)). The
role of the district court is “limited to determining
(1) whether a valid agreement to arbitrate exists and, if it
does, (2) whether the agreement encompasses the dispute at
issue.” Chiron Corp. v. Ortho Diagnostic Sys.,
Inc., 207 F.3d 1126, 1130 (9th Cir. 2000).
agreement to arbitrate is “valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.” 9 U.S.C.
§ 2. Under California law, the elements of a valid
contract are (1) parties capable of contracting; (2) mutual
consent; (3) a lawful object; and (4) consideration. Cal.
Civ. Code § 1550. However, a court will not enforce an
otherwise valid ...