Mays v. Midnite Dreams , 300 Neb. 485 ( 2018 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
07/26/2018 01:08 AM CDT
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Nebraska Supreme Court A dvance Sheets
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MAYS v. MIDNITE DREAMS
Cite as 300 Neb. 485
Elizabeth M ays, and all others similarly situated,
appellee, v. M idnite Dreams, I nc., doing business
as Shaker’s, and Daniel Robinson, appellants.
___ N.W.2d ___
Filed July 13, 2018. No. S-17-674.
1. Contracts: Statutes: Appeal and Error. The construction of a contract
and the meaning of a statute are questions of law which an appellate
court reviews de novo.
2. Contracts: Public Policy. The determination of whether a contract vio-
lates public policy presents a question of law.
3. Judgments: Appeal and Error. An appellate court independently
reviews questions of law decided by a lower court.
4. Employer and Employee: Independent Contractor: Master and
Servant. Ordinarily, a party’s status as an employee or an independent
contractor is a question of fact. However, where the facts are not in
dispute and where the inference is clear that there is, or is not, a master
and servant relationship, the matter is a question of law.
5. Judgments: Appeal and Error. In a bench trial of a law action, the
trial court’s factual findings have the effect of a jury verdict, and an
appellate court will not disturb those findings unless they are clearly
erroneous.
6. ____: ____. In reviewing a judgment awarded in a bench trial of a law
action, an appellate court does not reweigh evidence, but considers the
evidence in the light most favorable to the successful party and resolves
evidentiary conflicts in favor of the successful party, who is entitled to
every reasonable inference deducible from the evidence.
7. Appeal and Error: Words and Phrases. Plain error exists where there
is an error, plainly evident from the record but not complained of at
trial, which prejudicially affects a substantial right of a litigant and is of
such a nature that to leave it uncorrected would cause a miscarriage of
justice or result in damage to the integrity, reputation, and fairness of the
judicial process.
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8. Contracts: Wages. The policy statement in Neb. Rev. Stat. § 48-1201
(Reissue 2010) precludes parties from avoiding the protections of the
Wage and Hour Act, Neb. Rev. Stat. § 48-1201 et seq. (Reissue 2010 &
Cum. Supp. 2016), by contractual agreement.
9. Statutes: Legislature: Public Policy. It is the function of the Legislature,
through the enactment of statutes, to declare what is the law and public
policy of this state.
10. Contracts: Public Policy. A contract which is clearly contrary to public
policy is void.
11. Constitutional Law: Rules of the Supreme Court: Notice: Statutes:
Appeal and Error. Strict compliance with Neb. Ct. R. App. P.
§ 2-109(E) (rev. 2014) is required in order for an appellate court to con-
sider a challenge to the constitutionality of a statute.
12. Estoppel. The doctrine of equitable estoppel is based upon the principle
that one who has previously taken a position with reference to a transac-
tion and thereby obtained a benefit from the other party cannot thereaf-
ter take an inconsistent position which would result in prejudice to the
party who relied on the original position.
13. Appeal and Error. On appeal, an appellate court will consider only
arguments that were both specifically assigned and specifically argued
in the appellate brief.
14. Employer and Employee: Independent Contractor. No single test
exists for determining whether one performs services for another as an
employee or as an independent contractor, and the following factors
must be considered: (1) the extent of control which, by the agreement,
the employer may exercise over the details of the work; (2) whether the
one employed is engaged in a distinct occupation or business; (3) the
type of occupation, with reference to whether, in the locality, the work is
usually done under the direction of the employer or by a specialist with-
out supervision; (4) the skill required in the particular occupation; (5)
whether the employer or the one employed supplies the instrumentali-
ties, tools, and the place of work for the person doing the work; (6) the
length of time for which the one employed is engaged; (7) the method of
payment, whether by the time or by the job; (8) whether the work is part
of the regular business of the employer; (9) whether the parties believe
they are creating an agency relationship; and (10) whether the employer
is or is not in business.
15. ____: ____. The right of control is the chief factor distinguishing an
employment relationship from that of an independent contractor.
16. Federal Acts: Employer and Employee: Wages. The Fair Labor
Standards Act, 29 U.S.C. § 201 et seq. (2012 & Supp. IV 2016), requires
employers subject to its provisions to pay each employee engaged
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in commerce or in the production of goods for commerce, or who is
employed in an enterprise which is engaged in commerce or in the pro-
duction of goods for commerce, specified wages for all hours worked,
certain of which are to be compensated at overtime rates.
17. Federal Acts: Employer and Employee: Words and Phrases.
Commerce as used in the Fair Labor Standards Act, 29 U.S.C. § 201 et
seq. (2012 & Supp. IV 2016), means interstate commerce.
18. Federal Acts: Employer and Employee: Proof. One of the basic ele-
ments necessary to showing an entitlement to relief under the Fair Labor
Standards Act, 29 U.S.C. § 201 et seq. (2012 & Supp. IV 2016), is that
the work involved interstate activity.
19. ____: ____: ____. Under the Fair Labor Standards Act, 29 U.S.C. § 201
et seq. (2012 & Supp. IV 2016), the burden is on the employee to prove
a sufficient nexus to interstate commerce as an essential element of
the claim.
20. ____: ____: ____. Without at least some minimal showing as to the par-
ties’ relationship to interstate commerce, the Fair Labor Standards Act,
29 U.S.C. § 201 et seq. (2012 & Supp. IV 2016), cannot be said to apply
as a matter of law.
21. Federal Acts: Employer and Employee. The question whether an
employee is engaged in commerce within the meaning of the Fair
Labor Standards Act, 29 U.S.C. § 201 et seq. (2012 & Supp. IV 2016),
is determined by practical considerations, not by technical concep-
tions. The test is whether the work is so directly and vitally related
to the functioning of an instrumentality or facility of interstate com-
merce as to be, in practical effect, a part of it, rather than isolated local
activity.
22. ____: ____. Work that is purely local in nature does not meet the
requirements of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.
(2012 & Supp. IV 2016), but any regular contact with commerce, no
matter how small, will result in coverage.
23. ____: ____. For an employee to be “engaged in commerce” under the
Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (2012 & Supp. IV
2016), the employee must be directly participating in the actual move-
ment of persons or things in interstate commerce by (1) working for an
instrumentality of interstate commerce, e.g., transportation or communi-
cation industry employees, or (2) by regularly using the instrumentalities
of interstate commerce in his or her work, e.g., regular and recurrent use
of interstate telephone, telegraph, mails, or travel.
24. Federal Acts: Employer and Employee: Sales: Proof. To succeed
on a Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (2012 & Supp.
IV 2016), claim alleging enterprise coverage, an employee must elicit
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evidence to prove that his or her employer’s sales were high enough to
trigger coverage under the act.
25. Employer and Employee: Wages. Under Neb. Rev. Stat. § 48-1203(2)
(Cum. Supp. 2016), an employee is considered to be a tipped employee
if the employer proves the employee received tips sufficient to com-
pensate the employee at a rate greater than or equal to the mini-
mum wage.
26. Statutes: Appeal and Error. Statutory language is to be given its plain
and ordinary meaning, and an appellate court will not resort to inter-
pretation to ascertain the meaning of statutory words which are plain,
direct, and unambiguous.
27. Actions: Employer and Employee: Wages. The Nebraska Wage
Payment and Collection Act, Neb. Rev. Stat. § 48-1228 et seq. (Reissue
2010 & Cum. Supp. 2016), does not grant a cause of action to an
employee in a case where no regular payday has been established and
he or she has never received payment from his or her employer.
28. Appeal and Error. An appellate court is not obligated to engage in an
analysis that is not necessary to adjudicate the case and controversy
before it.
Appeal from the District Court for Lancaster County: Susan
I. Strong, Judge. Affirmed in part, and in part reversed and
remanded with direction.
Robert B. Creager, of Anderson, Creager & Wittstruck, P.C.,
L.L.O., for appellants.
Kathleen M. Neary, of Powers Law, for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, and
Papik, JJ., and Daugherty, District Judge.
Funke, J.
This appeal concerns an order from the Lancaster County
District Court which found that Elizabeth Mays, an exotic
dancer with Midnite Dreams, Inc., doing business as Shaker’s,
was an employee entitled to compensation under the federal
Fair Labor Standards Act1 (FLSA) and the Wage and Hour
1
29 U.S.C. § 201 et seq. (2012 & Supp. IV 2016).
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Act2 (WHA). The district court then awarded damages and
attorney fees and costs under the FLSA and the Nebraska
Wage Payment and Collection Act3 (NWPCA). While the
court’s ruling that Mays was an employee under the WHA was
not clearly erroneous, the court erred in granting Mays relief
under the FLSA and the NWPCA. Therefore, we affirm in part,
and in part reverse and remand with direction to award dam-
ages and attorney fees and costs, calculated consistently with
the WHA.
I. BACKGROUND
Shaker’s, a juice bar featuring all-nude dancers, is owned by
Midnite Dreams and located near Waverly, Nebraska. Shaker’s
operates as a “leased” club, meaning it contracts with danc-
ers to lease them the use of its facilities and the dancers
receive compensation only from customer tips. Shaker’s also
directly employs a doorman, wait staff, a bartender, and a
disk jockey. Daniel Robinson, one of the appellants, manages
Shaker’s and is the principal owner and sole corporate officer
of Midnite Dreams.
From 2012 to 2014, Mays danced at Shaker’s, under two
1-year “Independent Artist Lease Agreements” with Midnite
Dreams. Under the agreements, Mays paid a flat nightly fee for
the use of Shaker’s stage and dressing room, with additional
fees for each use of the “VIP” or private rooms. The agree-
ments did not provide that Shaker’s would compensate Mays
for any service and did not contain any schedule or minimum
work requirements. The appellants never provided any com-
pensation to Mays.
While dancing at Shaker’s, Mays was informed of over 50
additional “house rules,” posted at the facility and orally com-
municated to the dancers, concerning the dancers’ conduct and
the use of Shaker’s facility. Robinson provided inconsistent
2
Neb. Rev. Stat. § 48-1201 et seq. (Reissue 2010 & Cum. Supp. 2016).
3
Neb. Rev. Stat. § 48-1228 et seq. (Reissue 2010 & Cum. Supp. 2016).
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testimony as to whether these rules were mandatory or merely
“suggestions.” However, Mays testified that the house rules
were enforced by Robinson and his employees and that failure
to follow the house rules would result in discipline through
belligerent reprimands, impositions of fines, and threats to ter-
minate the agreements, which were terminable at will.
The “house rules” concerned the dancers’ shift arrival
times; hair, makeup, lotion, and dress requirements for the
dancers; the number and order of sets the dancers performed
during a shift; the method of payment the dancers could accept
from customers; cleaning duties; the price the dancers could
charge for private and “VIP” room dances; off-stage dancer
conduct; and conduct during onstage performances, specify-
ing clothing items the dancers were expected to remove dur-
ing certain sets.
Mays prepared a spreadsheet of the dates and hours she
performed at Shaker’s from various documents and recol-
lections. She also calculated her average compensation from
customer tips, after lease fees, while working at Shaker’s as
$44 per hour.
Mays filed a complaint and an amended complaint against
the appellants seeking unpaid wages, liquidated damages, and
attorney fees and costs under the FLSA and Nebraska law.
Though Mays’ amended complaint alleged that the appel-
lants violated the FLSA and Nebraska law, it contained no
allegations concerning whether Mays had engaged in com-
merce or whether Midnite Dreams was an enterprise engaged
in commerce.
The court determined Mays was an “employee” entitled to
minimum wage compensation under the FLSA and Nebraska
law, applying the “ABC test” under § 48-1229(1)(a) through
(c) and the 10-factor test under § 48-1202(3). The court con-
cluded that by instituting and enforcing the house rules, the
appellants transformed Mays into an employee and themselves
into employers. The court also ruled Mays was not estopped
from claiming she was an employee.
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The court determined Mays was entitled to a full minimum
wage rate because, unlike Nebraska Law, the FLSA required
specific notice requirements to count a “tip credit” against min-
imum wage requirements. Further, it ruled the FLSA entitled
Mays to overtime compensation and liquidated damages. The
court ruled the appellants were jointly and severally liable for
$7,586.78 in damages for unpaid wages, $27,945 in attorney
fees, and $504.70 in costs. The appellants filed a motion for
new trial, which was denied.
The appellants perfected a timely appeal. We moved the case
to our docket on our own motion pursuant to our authority to
regulate the caseloads of the Nebraska Court of Appeals and
this court.4
II. ASSIGNMENTS OF ERROR
The appellants assign, restated and reordered, error to the
court for (1) concluding that a written lease agreement between
the parties created an employment relationship, (2) apply-
ing the FLSA and the WHA policy statements to change the
parties’ contractual relationship, (3) failing to find Mays was
estopped from arguing she was an employee, (4) finding Mays
was an employee of the appellants, (5) finding Mays was enti-
tled to minimum wage compensation, (6) failing to conclude
Mays was a tipped employee, and (7) awarding excessive and
unreasonable attorney fees.
III. STANDARD OF REVIEW
[1-3] The construction of a contract and the meaning
of a statute are questions of law which an appellate court
reviews de novo.5 The determination of whether a contract
violates public policy presents a question of law.6 An ­appellate
4
See Neb. Rev. Stat. § 24-1106(3) (Supp. 2017).
5
Brozek v. Brozek, 292 Neb. 681, 874 N.W.2d 17 (2016).
6
Johnson v. Nelson, 290 Neb. 703, 861 N.W.2d 705 (2015).
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court independently reviews questions of law decided by a
lower court.7
[4] Ordinarily, a party’s status as an employee or an inde-
pendent contractor is a question of fact. However, where the
facts are not in dispute and where the inference is clear that
there is, or is not, a master and servant relationship, the matter
is a question of law.8
[5,6] In a bench trial of a law action, the trial court’s fac-
tual findings have the effect of a jury verdict, and we will not
disturb those findings unless they are clearly erroneous.9 In
reviewing a judgment awarded in a bench trial of a law action,
an appellate court does not reweigh evidence, but considers the
evidence in the light most favorable to the successful party and
resolves evidentiary conflicts in favor of the successful party,
who is entitled to every reasonable inference deducible from
the evidence.10
[7] Plain error exists where there is an error, plainly evident
from the record but not complained of at trial, which prejudi-
cially affects a substantial right of a litigant and is of such a
nature that to leave it uncorrected would cause a miscarriage
of justice or result in damage to the integrity, reputation, and
fairness of the judicial process.11 An appellate court may, at its
option, notice plain error.12
IV. ANALYSIS
The appellants’ arguments on appeal can be consolidated
into the following four issues: (1) Did the court err as a matter
7
Donut Holdings v. Risberg, 294 Neb. 861, 885 N.W.2d 670 (2016).
8
Will. v. Allstate Indemnity Co., 266 Neb. 794, 669 N.W.2d 455 (2003).
9
Aksamit Resource Mgmt. v. Nebraska Pub. Power Dist., 299 Neb. 114, 907
N.W.2d 301 (2018).
10
Elting v. Elting, 288 Neb. 404, 849 N.W.2d 444 (2014).
11
Houser v. American Paving Asphalt, 299 Neb. 1, 907 N.W.2d 16 (2018).
12
In re Robert L. McDowell Revocable Trust, 296 Neb. 565, 894 N.W.2d 810
(2017).
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of law in considering whether Mays was an “employee” when
the agreements stated the parties had a lessee/lessor relation-
ship? (2) Did the court err in ruling Mays was an “employee”?
(3) Did the court err in ruling Mays was entitled to full mini-
mum wage compensation? (4) Was the amount of attorney fees
awarded to Mays excessive and unreasonable?
1. M ays Was Employee Entitled
to Compensation
(a) Agreements Neither Waived Protections
Afforded to Mays by WHA nor
Estopped Mays From Asserting
Rights Under WHA
The appellants contend that because of the agreements
entered into by the parties, as a matter of law, Mays cannot
be considered an employee. They argue that the parties’ con-
stitutional right to contract supersedes the policy statement in
§ 48-1201. This argument, however, relies on a presumption
that the WHA permits an employee to forfeit the protections
afforded to him or her by the WHA through contract. The
appellants fail to cite any authority for their argument that the
protections of the WHA may be waived, and we find no basis
for such in the WHA.
Section 48-1201 provides:
It is declared to be the policy of this state (1) to estab-
lish a minimum wage for all workers at levels consistent
with their health, efficiency and general well-being, and
(2) to safeguard existing minimum wage compensation
standards which are adequate to maintain the health,
efficiency and general well-being of workers against the
unfair competition of wage and hours standards which do
not provide adequate standards of living.
[8-10] The policy statement in § 48-1201 is precisely why
parties may not contract away the protections afforded by the
WHA. It is the function of the Legislature, through the enact-
ment of statutes, to declare what is the law and public policy
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of this state.13 And a contract which is contrary to public policy
is void.14 Accordingly, the agreements are void to the extent
they defined the parties’ employment relationship, under
§ 48-1202(3).
[11] To the extent the appellants challenge the constitution-
ality of the WHA, we do not reach this argument. Neb. Ct.
R. App. P. § 2-109(E) (rev. 2014) requires that a party chal-
lenging a statute’s constitutionality file and serve notice with
the Supreme Court clerk at the time of filing the party’s brief.
Strict compliance with § 2-109(E) is required in order for an
appellate court to consider a challenge to the constitutionality
of a statute.15 A review of the record shows the appellants did
not file a notice of a constitutional question with the clerk.
[12] The appellants also contend that because Mays prof-
ited from the agreements, she is estopped from claiming relief
as an employee. The doctrine of equitable estoppel is based
upon the principle that one who has previously taken a posi-
tion with reference to a transaction and thereby obtained a
benefit from the other party cannot thereafter take an incon-
sistent position which would result in prejudice to the party
who relied on the original position.16 The necessary elements
of equitable estoppel are as follows:
“As to party estopped, (1) conduct which amounts to a
false representation or concealment of material facts, or,
at least, which is calculated to convey the impression that
the facts are otherwise than, and inconsistent with, those
which the party subsequently attempts to assert; (2) the
intention, or at least the expectation, that such conduct
shall be acted upon by, or influence, the other party or
other persons; and (3) knowledge, actual or construc-
tive, of the real facts; as to the other party, (4) lack of
13
Bamford v. Bamford, Inc., 279 Neb. 259, 777 N.W.2d 573 (2010).
14
Id.
15
Cain v. Custer Cty. Bd. of Equal., 291 Neb. 730, 868 N.W.2d 334 (2015).
16
Will. v. Williams, 206 Neb. 630, 294 N.W.2d 357 (1980).
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knowledge and of the means of knowledge of the truth as
to the facts in question; (5) reliance, in good faith, upon
the conduct or statements of the party to be estopped; and
(6) action or inaction based thereon of such a character as
to change the position or status of the party claiming the
estoppel, to his injury, detriment, or prejudice.”17
However, Mays could not have made a false representa-
tion or concealment of material facts by entering into the
agreements the appellants imposed upon her. In addition, the
appellants could not have relied, in good faith, upon the con-
duct or statements of Mays, because the agreements cannot
define the relationship between the parties for the purposes of
§ 48-1202(3). As a result, Mays cannot be estopped from exer-
cising the rights afforded to her under the WHA.
(b) Court’s Determination Mays Was
“Employee” Under § 48-1202(3)
Was Not Clearly Erroneous
[13] While the appellants assigned error to the district
court’s determination that Mays was an “employee,” the court
made the determination under the three separate acts consisting
of the FLSA, the WHA, and the NWPCA. Because the appel-
lants reference only the 10-factor employee test that the court
applied to the WHA, we confine our analysis to that determi-
nation. On appeal, we will consider only arguments that were
both specifically assigned and specifically argued in the appel-
late brief.18
[14] No single test exists for determining whether one per-
forms services for another as an employee or as an independent
contractor, and the following factors must be considered:
(1) the extent of control which, by the agreement, the
employer may exercise over the details of the work;
(2) whether the one employed is engaged in a distinct
17
Id. at 637, 294 N.W.2d at 362.
18
Lombardo v. Sedlacek, 299 Neb. 400, 908 N.W.2d 630 (2018).
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occupation or business; (3) the type of occupation, with
reference to whether, in the locality, the work is usually
done under the direction of the employer or by a spe-
cialist without supervision; (4) the skill required in the
particular occupation; (5) whether the employer or the
one employed supplies the instrumentalities, tools, and
the place of work for the person doing the work; (6) the
length of time for which the one employed is engaged;
(7) the method of payment, whether by the time or by
the job; (8) whether the work is part of the regular busi-
ness of the employer; (9) whether the parties believe they
are creating an agency relationship; and (10) whether the
employer is or is not in business.19
The appellants argue 3 of the 10 factors support a finding
that Mays would be an independent contractor. Those three
factors, which include the method of payment, the parties’
belief that they were not creating an agency relationship, and
the extent of control they had over the details of the work, each
favor a determination Mays was an independent contractor.
While the court did not specifically address the method of
payment or the parties understanding of their relationship, both
support an independent contractor finding. Nevertheless, these
were merely two factors considered in conjunction with the
other eight factors.
Ordinarily, a party’s status as an employee or an indepen-
dent contractor is a question of fact.20 In this matter, there is
a factual question regarding what the “house rules” were and
whether they were mandatory or were merely suggestions. As
a result, we review the court’s determination that Mays was an
employee as a question of fact. In reviewing the court’s factual
determinations, we do not reweigh the evidence but consider it
in the light most favorable to Mays.
19
Allstate Indemnity Co., supra note 8, 266 Neb. at 801, 669 N.W.2d at
461-62.
20
Id.; Kime v. Hobbs, 252 Neb. 407, 562 N.W.2d 705 (1997).
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[15] The court’s decision strongly relied on a finding that
the “house rules” imposed on Mays controlled almost every
aspect of her employment. The court correctly noted that the
“right of control is the chief factor distinguishing an employ-
ment relationship from that of an independent contractor.”21
As the district court also noted, the appellants were in the
business of operating a club which offered fully nude, live
entertainment. Mays’ work was a vital part of that regular
business. In addition, the appellants instituted the “house
rules,” which significantly controlled the manner in which the
dancers performed their work, including the dancers’ move-
ment on stage and inside the club, the type of dress worn
by the dancers, the dancers’ cleaning duties, their schedule
of performing, their contact with customers, the rates they
charged, the method of payment, their cell phone usage, the
types of lotions they used, the music they danced to, and
their attendance at mandatory meetings. Further, the appellants
meted out penalties for violations of the “house rules,” which
included monetary fines, relegation to less desirable time slots,
and verbal reprimands.
The appellants’ argument that they did not control the means
and methods of the dancers’ performances is not supported by
the record, does little to undercut the well-reasoned analysis
of the court, and fails to address the existence of the “house
rules.” In addition, the appellants have provided no basis for
finding the court’s determination that Mays was an “employee”
entitled to a minimum wage, under the WHA, clearly errone-
ous. Therefore, we find these assignments of error to be with-
out merit.
(c) Appellants Failed to Properly
Raise Issue of Robinson’s
Personal Liability
The appellants argue in their brief that the evidence clearly
shows Midnite Dreams, and not Robinson, was Mays’ employer
21
See Kime, supra note 20, 252 Neb. at 414, 562 N.W.2d at 711.
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and that the court improperly pierced the corporate veil without
legal basis to make Robinson personally liable. They provide
no support for their implication that an owner of a company
may be liable under employment laws for wages only if the
corporate veil may be pierced, which the court explicitly
rejected in its order on the motion for rehearing. Further, the
appellants failed to assign error to the court’s determination
that Robinson was one of Mays’ employers and, therefore, was
jointly liable for her wages.
As mentioned above, we will consider only arguments that
were both specifically assigned and specifically argued in the
appellate brief. The trial court ruled Robinson was an employer
based on his direct role at Shaker’s, not merely through his
role as the owner of Midnite Dreams. Therefore, we do not
consider this argument.
2. M ays Failed to Prove
FLSA A pplied
[16] The FLSA requires employers subject to its provi-
sions to pay each employee engaged in commerce or in the
production of goods for commerce, or who is employed in an
enterprise which is engaged in commerce or in the production
of goods for commerce, specified wages for all hours worked,
certain of which are to be compensated at overtime rates.22
Any employer who violates these requirements is liable to each
employee in the amount of his or her unpaid minimum and
overtime wages, an additional equal amount as liquidated dam-
ages and reasonable attorney fees and costs.23
The trial court found that under the FLSA, the appellants
were liable to Mays for minimum wage, without any tip credit;
overtime wage compensation; liquidated damages; and attorney
fees and costs. The appellants argue the court erred in certain
determinations of its liability under the FLSA.
22
Banks v. Mercy Villa Care Center, 225 Neb. 751, 407 N.W.2d 793 (1987).
See 29 U.S.C. §§ 206 and 207.
23
See 29 U.S.C. § 216(b).
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[17] Nevertheless,
[t]o recover for minimum-wage or overtime violations
under the FLSA, a plaintiff-employee must demonstrate
that either (1) his employer is an “enterprise engaged in
commerce or in the production of goods for commerce”
or (2) the plaintiff himself has “engaged in commerce or
in the production of goods for commerce” in his capacity
as an employee.24
The FLSA defines commerce as meaning “trade, commerce,
transportation, transmission, or communication among the
several States or between any State and any place outside
thereof.”25 In short, commerce, as used in the FLSA, means
interstate commerce.26
[18-20] Accordingly, “[o]ne of the ‘basic elements’ neces-
sary to showing an entitlement to relief under the FLSA is that
‘the work involved interstate activity.’”27 “The burden is on the
employee to prove a sufficient nexus to interstate commerce as
an essential element of the claim.”28 Similarly, we have held
that “[w]ithout at least some minimal showing as to the [par-
ties’] relationship to interstate commerce, the [FLSA] cannot
be said to apply” as a matter of law.29
Neither the parties nor the court addressed this element of
Mays’ FLSA claims. Therefore, before addressing the merits of
the award of unpaid minimum and overtime wages, liquidated
damages, and reasonable attorney fees and costs, we consider
24
Helfand v. W.P.I.P., Inc., 165 F. Supp. 3d 392, 396 (D. Md. 2016), citing
29 U.S.C. §§ 206(a) and 207(a)(1). Accord Martinez v. Petrenko, 792 F.3d
173 (1st Cir. 2015).
25
29 U.S.C. § 203(b).
26
See Banks, supra note 22.
27
Martinez, supra note 24, 792 F.3d at 179.
28
Id. at 175. See, also, e.g., Sobrinio v. Medical Center Visitor’s Lodge, Inc.,
474 F.3d 828 (5th Cir. 2007), citing Warren-Bradshaw Co. v. Hall, 317
U.S. 88, 63 S. Ct. 125, 87 L. Ed. 83 (1942).
29
Fisbeck v. Scherbarth, Inc., 229 Neb. 453, 469, 428 N.W.2d 141, 151
(1988), citing Banks, supra note 22.
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whether Mays made a sufficient showing to entitle her the pro-
tections of the FLSA as a matter of law.
As a dancer, Mays was not engaged in the production
of goods in commerce. Instead, we limit our consideration
to whether Mays engaged in commerce or whether Midnite
Dreams was an enterprise engaged in commerce. The facts
capable of establishing coverage under both of these theories
are different. “To establish individual coverage, the employee
must present facts showing his own activities. To establish
enterprise coverage, the employee instead must present facts
showing the activities of other employees, and the employ-
er’s sales.”30
(a) Evidence Does Not Show Mays
Was Engaged in Commerce
[21,22] “The question whether an employee is engaged ‘in
commerce’ within the meaning of the [FLSA] is determined
by practical considerations, not by technical conceptions.”31
“‘The test is whether the work is so directly and vitally related
to the functioning of an instrumentality or facility of inter-
state commerce as to be, in practical effect, a part of it, rather
than isolated, local activity.’”32 “The [U.S.] Supreme Court
has articulated that it is the intent of Congress to regulate
only activities constituting interstate commerce, not activi-
ties merely affecting commerce.”33 “Work that is purely local
30
Martinez, supra note 24, 792 F.3d at 175.
31
Mitchell v. Vollmer & Co., 349 U.S. 427, 429, 75 S. Ct. 860, 99 L. Ed.
1196 (1955). See, also, e.g., Wirtz v. Modern Trashmoval, Inc., 323 F.2d
451 (4th Cir. 1963).
32
Mitchell v. H. B. Zachry Co., 362 U.S. 310, 324, 80 S. Ct. 739, 4 L. Ed.
2d 753 (1960). See, also, e.g., Josendis v. Wall to Wall Residence Repairs,
Inc., 662 F.3d 1292 (11th Cir. 2011); Williams v. Henagan, 595 F.3d 610
(5th Cir. 2010); Wirtz, supra note 31.
33
Thorne v. All Restoration Services, Inc., 448 F.3d 1264, 1266 (11th Cir.
2006), citing McLeod v. Threlkeld, 319 U.S. 491, 63 S. Ct. 1248, 87 L. Ed.
1538 (1943).
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in nature does not meet the FLSA’s requirements, but ‘[a]ny
regular contact with commerce, no matter how small, will
result in coverage.’”34
[23] The 11th Circuit Court of Appeals has espoused the
following test to determine if an employee is engaged in
commerce:
[F]or an employee to be ‘engaged in commerce’ under
the FLSA, he must be directly participating in the actual
movement of persons or things in interstate commerce by
(i) working for an instrumentality of interstate commerce,
e.g., transportation or communication industry employees,
or (ii) by regularly using the instrumentalities of interstate
commerce in his work, e.g., regular and recurrent use of
interstate telephone, telegraph, mails, or travel.35
Regarding the first type of interstate employees, courts
have further expounded on the actions that qualify as engag-
ing in commerce to include an employee that “either crosses
state lines in connection with his employment, handles goods
directly moving in the channels of interstate commerce, or
directly contributes to the repair or extension of facilities of
interstate commerce.”36
There is also substantial case law considering the limits of
this type of interstate employment. The U.S. Supreme Court
has stated that “handlers of goods for a wholesaler who moves
them interstate on order or to meet the needs of specified cus-
tomers are in commerce, while those employees who handle
goods after acquisition by a merchant for general local dispo-
sition are not.”37 Based on this principle, courts have rejected
claims that an employee operating a vehicle and purchasing
34
Henagan, supra note 32, 595 F.3d at 621. See, also, 29 C.F.R. § 779.109
(2017).
35
Thorne, supra note 33, 448 F.3d at 1266, citing 29 C.F.R. §§ 776.23(d)(2)
and 776.24 (2005). See, also, 29 C.F.R. § 779.103 (2017).
36
Wirtz, supra note 31, 323 F.2d at 457, citing Vollmer & Co., supra note 31.
37
McLeod, supra note 33, 319 U.S. at 494.
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gasoline, both of which were produced out-of-state, was in the
stream of commerce.38
In Sobrinio v. Medical Center Visitor’s Lodge, Inc.,39 an
employee of a motel, connected to a large local medical cen-
ter, worked in roles as a janitor, security guard, and driver
for guests. He drove guests on errands to local stores and
the medical center, but never drove them to the airport or
other transportation centers. While he served many out-of-state
guests, the court held he was not engaged in commerce under
the FLSA, because his duties were purely local in nature.40
It distinguished his transportation duties from those of other
employees that “engaged in commerce when ‘their work was
entwined with a continuous stream of [interstate] travel.’”41
Regarding the second type of interstate employees, there
is less agreement among courts on what activities constitute
engagement in commerce.
In Jian Long Li v. Li Qin Zhao,42 the U.S. District Court
for the Eastern District of New York rejected an argument that
using a cell phone “‘connecting to phone towers across the
United States’” amounted to engaging in commerce. In Jian
Long Li, the plaintiff used a cell phone to contact customers
in the course of making local deliveries for a New York City
restaurant. The court ruled “the use of a cellular phone by
[the plaintiff], but not for communication between states, is
strictly an intrastate activity, notwithstanding the fact that it
utilizes interstate technology.”43 It reasoned that while using
38
Jian Long Li v. Li Qin Zhao, 35 F. Supp. 3d 300 (E.D.N.Y. 2014), citing
Josendis, supra note 32, and Thorne, supra note 33.
39
Sobrinio, supra note 28.
40
Id.
41
Id. at 829-30 (emphasis in original).
42
Jian Long Li, supra note 38, 35 F. Supp. 3d at 308.
43
Id. at 309, citing Junkin v. Emerald Lawn Maint. & Landscaping, Inc., No.
04-CV-1537, 2005 WL 2862079 (M.D. Fla. Nov. 1, 2005). See, also, 29
C.F.R. § 779.103.
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a cell phone, as well as other intrastate activities, may affect
or indirectly relate to interstate commerce, it would be unten-
able to conclude that such local activities would lead to FLSA
coverage without evidence of the communication crossing state
lines, because it would be “difficult to imagine anyone, in
this modern day and age, who [would not then qualify for
FLSA coverage].”44
Two unpublished U.S. District Court opinions have
addressed what activities of dancers constitute engaging in
commerce, Miller v. Centerfold Entertainment Club, Inc.45 and
Foster v. Gold & Silver Private Club, Inc.46 In Miller, the court
rejected arguments that a dancer was engaged in commerce
by dancing for out-of-state customers and serving beverages
produced in another state, but ruled the dancer’s use of music
streamed over the Internet, text messages to clients, and self-­
publication on social media constituted engagement in com-
merce. In Foster, the court ruled broadcasting dances over the
Internet was engagement in commerce.
At oral arguments, Mays argued that Robinson’s con-
tracting with dancers from outside Nebraska and scheduling
them to come to Nebraska and the fact that Mays commuted
to Nebraska to dance constituted engagement in interstate
commerce. However, the record is devoid of evidence that
Robinson communicated with the dancers across state lines
by using cell phones or the Internet. In addition, as men-
tioned above, only Mays’ personal activities are relevant to
analyzing whether she was an employee engaged in com-
merce. The U.S. Department of Labor regulations explicitly
distinguish an employee’s personal actions of commuting to
and from the work place, which do not constitute engaging in
44
Jian Long Li, supra note 38, 35 F. Supp. 3d at 309.
45
Miller v. Centerfold Entertainment Club, Inc., No. 6:14-CV-6074, 2017
WL 3425887 (W.D. Ark. Aug. 9, 2017) (unpublished decision).
46
Foster v. Gold & Silver Private Club, Inc., No. 7:14CV00698, 2015 WL
8489998 (W.D. Va. Dec. 9, 2015) (unpublished decision).
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commerce, from an employee’s traveling across state lines in
the performance of his or her duties, who must do so consist­
ently to be considered engaged in commerce.47 Further, it has
been held that an employer’s action of hiring an employee in
another state and paying for his travel to the state where his
employment activities were located did not amount to that
employee’s engaging in commerce, because the relocation
was unrelated to the employee’s actual duties.48 We decline to
expand the scope of the FLSA to cover employees based on
actions performed in their personal capacity with no relation
to the performance of their employment.
Here, even considering the most liberal standards, the evi-
dence fails to show that Mays engaged in interstate commerce.
Even the activities the court in Jian Long Li was concerned
would bring all employees in the modern era under FLSA cov-
erage are not present.
While Robinson testified dancers were free to accept pay-
ment by credit card, Mays stated dancers were strictly forbid-
den from doing so and there was no evidence Mays had ever
accepted credit card payment. The evidence shows out-of-state
customers did attend Shaker’s but, as stated in Sobrinio, purely
local interactions with out-of-state individuals is not an inter-
state activity.49
Unlike Miller, there was no evidence Mays ever commu­
nicated with customers in Nebraska or elsewhere by telephone
or promoted herself on social media. Also, while the dancers
could request music, Robinson and the disk jockey exclu-
sively handled playing music and it was not established that
such music was streamed via the Internet. Therefore, we must
47
29 C.F.R. § 776.12 (2017). See, also, 1 Les A. Schneider & J. Larry Stine,
Wage and Hour Law § 4:3 (2018).
48
Oliphant v. Kaser et al., d.b.a. Kaser Construction Co., 10 Lab. Cas.
(CCH) ¶ 62,928 (Dallas Cty. Dist. Ct., Iowa, No. 16470, Nov. 13, 1945).
49
See Sobrinio, supra note 28.
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conclude that as a matter of law, Mays failed to make even a
minimal showing she engaged in commerce.
(b) Evidence Does Not Show
Midnite Dreams Was Enterprise
Engaged in Commerce
The FLSA defines an “‘[e]nterprise engaged in commerce or
in the production of goods for commerce’” as, in relevant part,
an enterprise that
(A)(i) has employees engaged in commerce or in the
production of goods for commerce, or that has employees
handling, selling, or otherwise working on goods or mate-
rials that have been moved in or produced for commerce
by any person; and
(ii) is an enterprise whose annual gross volume of
sales made or business done is not less than $500,000
(exclusive of excise taxes at the retail level that are sepa-
rately stated).50
[24] FLSA coverage through enterprise coverage is particu-
larly expansive compared to individual coverage based on the
broad definition of how an employee may engage in commerce
in § 203(s)(1)(A)(i).51 Congress, however, curbed this poten-
tially limitless definition by including the revenue threshold
in § 203(s)(1)(A)(i).52 To succeed on a FLSA claim alleging
enterprise coverage, an employee must elicit “evidence to
prove that his employer’s sales were high enough to trigger
coverage under the [FLSA].”53
We need not consider the scope of activities constitut-
ing enterprise coverage here, because there was no evidence
50
29 U.S.C. § 203(s)(1).
51
Helfand, supra note 24; Ethelberth v. Choice Sec. Co., 91 F. Supp. 3d 339
(E.D.N.Y. 2015).
52
Helfand, supra note 24.
53
Martinez, supra note 24, 792 F.3d at 175.
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adduced or even an allegation concerning the annual gross
volume of sales made or business done by Midnite Dreams.
Therefore, we must conclude that as a matter of law, Mays
failed to make even a minimal showing Midnite Dreams was
an enterprise engaged in commerce.
The court’s ruling in favor of Mays on her FLSA claims,
despite Mays’ failure to prove all of the elements of her claims,
affected a substantial right of the appellants, and to leave this
error uncorrected would amount to a miscarriage of justice.
Therefore, we find plain error in the court’s ruling that Mays
was entitled to compensation, overtime compensation, no tip
credit, liquidated damages, and attorney fees and costs under
the FLSA.
3. M ays Was Tipped Employee
[25] The court did not explicitly rule whether Mays was
a tipped employee under Nebraska law. However, unlike the
FLSA, § 48-1203(2) does not require any prior notification for
an employee to be a tipped employee. Instead, an employer
must merely prove the employee received tips sufficient to
compensate the employee at a rate greater than or equal to the
minimum wage.
Mays’ evidence that she was compensated by way of gra-
tuities at an average rate of $44 per hour clearly satisfies this
requirement. Therefore, under § 48-1203(2), Mays was entitled
to a wage of only $2.13 per hour.
4. M ays Was Not Entitled to
R elief Under NWPCA
The NWPCA requires that absent an exception, “each
employer shall pay all wages due its employees on regular days
designated by the employer or agreed upon by the employer
and employee.”54 Under the NWPCA, “[a]n employee having
a claim for wages which are not paid within thirty days of the
54
§ 48-1230(1).
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regular payday designated or agreed upon may institute suit for
such unpaid wages in the proper court.”55 We have summarized
this cause of action as “essentially permit[ing] an employee
to sue his or her employer if the employer fails to pay the
employee’s wages as they become due.”56
“Wages” are defined as “compensation for labor or services
rendered by an employee, including fringe benefits, when
previously agreed to and conditions stipulated have been met
by the employee, whether the amount is determined on a
time, task, fee, commission, or other basis.”57 Accordingly, we
have stated that “‘unpaid wages’ means ‘wages which are not
paid within thirty days of the regular pay day designated or
agreed upon.’”58
[26] Statutory language is to be given its plain and ordinary
meaning, and an appellate court will not resort to interpretation
to ascertain the meaning of statutory words which are plain,
direct, and unambiguous.59
[27] As expressed by the preceding provisions, the plain
language of the NWPCA indicates that the act only applies to
a situation where a regular payday has been established by an
employer unilaterally or with the consent of an employee. An
employee is not granted a cause of action in the case where
no regular payday has been established and he or she has
never received payment from his or her employer. Instead, an
employee denied minimum wage compensation for employ-
ment that has no regular payday may only proceed to recover
under the WHA.60 Further, “wages,” under the NWPCA, is
55
§ 48-1231(1).
56
Pick v. Norfolk Anesthesia, 276 Neb. 511, 516, 755 N.W.2d 382, 386 (2008).
57
§ 48-1229(6).
58
Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 670, 407 N.W.2d 751,
757 (1987).
59
Becher v. Becher, 299 Neb. 206, 908 N.W.2d 12 (2018).
60
§ 48-1206(5).
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expressly limited to a situation where the parties have agreed
the employer will compensate the employee for performing
work under the terms of the agreement.
In this case, the evidence shows Mays never received any
compensation from the appellants. Further, the agreements do
not contain any provision stating Mays will be paid for per-
forming services as a dancer or cleaner. There is also no evi-
dence the appellants had established a regular payday or that
Mays had agreed on a certain date for such payment. While
the court determined that the house rules were a condition
of employment, that is not sufficient to bring the agreements
within the scope of the NWPCA.
Therefore, Mays was not entitled to relief under § 48-1231
of the NWPCA.
While Mays is still entitled to recover minimum wage
benefits under the WHA, the court’s decision to grant relief
under § 48-1231 affected a substantial right of the appellants
by making them liable for attorney fees from this appeal and
requiring them to defend against the possibility of liability
for liquidated damages under § 48-1232. Thus, we find the
court’s ruling that Mays was entitled to minimum wage com-
pensation and attorney fees and costs under § 48-1231 consti-
tutes plain error.
5. Attorney Fees
[28] Because we determine the court erred in awarding
attorney fees under the FLSA and the NWPCA, we do not
consider the appellants’ assignment of error regarding whether
the amount of attorney fees the court awarded to Mays was
excessive and unreasonable. An appellate court is not obligated
to engage in an analysis that is not necessary to adjudicate the
case and controversy before it.61
61
Amend v. Nebraska Pub. Serv. Comm., 298 Neb. 617, 905 N.W.2d 551
(2018).
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V. CONCLUSION
We conclude the trial court’s determination that Mays was
an employee entitled to a minimum wage under the WHA was
not clearly erroneous, but Mays was entitled to only the mini-
mum wage amount for tipped employees. The WHA may also
entitle Mays to attorney fees and costs. Nevertheless, the court
erred in ruling Mays was entitled to relief under the FLSA and
the NWPCA. Therefore, we affirm in part, and in part reverse
and remand with direction to award damages and attorney fees
and costs, calculated consistently with the WHA.
A ffirmed in part, and in part reversed
and remanded with direction.