The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
)
URSULA MOFFITT and KRISTEN )
WHITE, on behalf of themselves and all other )
similarly situated individuals, )
) Case No. 23-cv-1059-RJD
)
Plaintiff, )
)
v. )
)
RCI DINING SERVICES (HARVEY), INC., )
)
Defendant.
ORDER
DALY, Magistrate Judge:
This matter comes before the Court on Defendant’s Motion for Reconsideration. Doc. 40.
Plaintiff filed a Response (Doc. 41). Defendant’s Motion is DENIED.
Plaintiffs Moffitt and White, on behalf of themselves and all other similarly situated
individuals, filed this suit against Defendant RCI Dining Services (Harvey), Inc., d/b/a Scarlett’s
Cabaret St. Louis. Plaintiffs allege that Defendant employed them and other current and former
exotic dancers to work at Scarlett’s Cabaret St. Louis in Washington Park, Illinois from April
2020-April 2023; Plaintiffs contend that Defendant misclassified them as non-employee
contractors and failed to compensate them pursuant to the Fair Labor Standards Act (“FLSA”).
Plaintiffs moved for conditional certification of the collective “to include all individuals that
worked or performed as exotic dancers for, at, or in Defendant’s Scarlett’s Cabaret St. Louis during
the period of April 2020 through the present.” Defendant objected, citing a contract (“Entertainer
License Agreement” or “ELA”) between Plaintiffs and Defendant that contained an arbitration
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agreement and collective action waiver. Defendant does not contend that the arbitration
agreement should be enforced-only the collective action waiver. The undersigned denied the
Motion for Conditional Certification without prejudice, finding that notice should not be sent to
dancers who signed a valid, enforceable collective action waiver and relying upon the Seventh
Circuit’s decision in Bigger v. Facebook, Inc. which involved a similar arbitration agreement
(though a collective action waiver was not at issue):
[B]efore authorizing notice to the alleged “arbitration employees”—
the Court must permit the parties to submit additional evidence on
the agreements’ existence and validity. The employer seeking to
exclude employees from receiving notice has the burden to show,
by a preponderance of the evidence, the existence of a valid
arbitration agreement for each employee it seeks to exclude
from receiving notice. The Court may not authorize notice to any
employee whom the employer shows entered a valid arbitration
agreement, unless the record reveals that nothing in the agreement
would prohibit that employee from participating in that action. To
be clear, if the employer does not prove that an employee entered a
valid arbitration agreement, then the court may authorize notice to
that employee—granted of course, that the employee is otherwise
an appropriate notice recipient.
947 F.3d 1043, 1049-50 (7th Cir. 2020) (emphasis added).
However, the Court also noted that in this case, the parties’ briefings reflected Plaintiffs
Moffitt and White first attempted to arbitrate their claims pursuant to the terms of the ELA, but
Defendant refused. Illinois law provides that “a party who materially breaches a contract cannot
take advantage of the terms of the contract that benefit him.” MHM Svcs., Inc. v. Assurance Co.
of America, 2012 IL App (1st) 112171, ¶48 (quoting James v. Lifeline Mobile Medics, 341 Ill.
App.3d 451, 455 (1st Dist. 2003); see also PML Development LLC v. Village of Hawthorn Woods,
2023 IL 128770, ¶50. The undersigned noted that the collective action waiver in the ELA may
not be enforceable (against Plaintiffs and/or other potential collective members) if Defendant
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breached the ELA by refusing to participate in arbitration.
The parties were ordered to propose dates for a scheduling order related to the disclosure
of the agreements between Defendant and “all individuals that worked or performed as exotic
dancers for, at, or in Defendant’s Scarlett’s Cabaret St. Louis during the period of April 2020
through the present” that contain a mutual arbitration agreement and/or a collective action waiver.1
The scheduling order allowed for discovery of information that would allow the parties to brief
the Court on whether the collective action waiver(s) are enforceable. Defendant filed the instant
Motion to Reconsider, contending the disclosure of the agreements would involve disclosure of
the identity of individuals who work(ed) as dancers at Scarlett’s Cabaret. Defendant avers that
these disclosures would “have a devastating effect on the club’s operations, because performers
would have no confidence that their identity and the fact that they participated in exotic dancing
would be kept private and would fear disclosure to their family members or significant
others…dancers would choose not to perform at Scarlett’s rather than risk this information being
shared with others without their consent.” Doc. 40-3, p.3.
Defendant’s argument is not persuasive. The Court recognizes that potential members of
the collective may not want their identities revealed, but there is a simple remedy to that solution.
Federal Rule of Civil Procedure 26(c) allows the Court to “issue an order to protect a party or
person from annoyance, embarrassment, oppression.” For example, in Bigger, the district court
carried out the Seventh Circuit’s instructions by ordering the defendant to produce the arbitration
agreements to Plaintiffs’ counsel, but also ordering Plaintiffs’ counsel to have no contact with
1 Defendant posits that the undersigned did not “expressly” order it to produce the ELAs but instead was “enabling
discovery” and “facilitating the process.” Doc. 40, p. 8. These statements are nonsensical. The parties were
allowed to propose dates by which Defendant had to produce the agreements, but the production was not optional.
To prove the existence of a written agreement that contains an enforceable collective action waiver, the written
agreements must be produced.
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potential members who had signed the agreements until further notice by the Court. Bigger v.
Facebook, Inc., Case No. 17-c-7753, (N. D. Ill. Jun. 2, 2020). Of course, a protective order in
this case may be more restrictive.
Instead of proposing terms for a protective order, however, Defendant then argues that
“precedent demonstrates that Defendant never waived the arbitration clause or the collective action
waiver.” Defendant claims that a recent Second Circuit Court of Appeals opinion “held that the
arbitration and class action waivers…were enforceable and not waived by [the Defendant’s]
refusal to pay the AAA’s fee schedule.”2 Defendant then explains that it did not refuse to
arbitrate, it simply refused to pay the “heavy-handed” fees charged by AAA (the parties’ arbitrator,
as identified in the ELA). This argument misconstrues the Order, which did not find that
Defendant waived the arbitration agreement and/or the prohibition against collective actions. The
issue presented in Plaintiffs’ Motion for Conditional Certification was whether to send notice to
members of the collective. The Seventh Circuit has determined a process to follow when deciding
this issue, considering that there are contractual agreements that may prohibit potential members
from joining the collective. The undersigned intends to follow that process. Defendant’s
Motion for Reconsideration is DENIED.
If Defendant intends to seek a protective order pursuant to Federal Rule of Civil Procedure
26(c) regarding written agreements between itself and “all individuals that worked or performed
as exotic dancers for, at, or in Defendant’s Scarlett’s Cabaret St. Louis during the period of April
2 In the recent Court of Appeals opinion cited by Defendant, the Second Circuit’s consideration was limited to finding
that the employer defendant did not “act[] so inconsistently with its arbitration right as to have waived arbitration”
and the district court “improperly lifted the stay [for arbitration] to the benefit of the party that refused to comply with
the express terms of the ELAs.” Brown v. Peregrine Enterprises, Inc., 2024 WL 8800728, *4 (2d. Cir. 2023). Here,
it is unclear which party first failed to comply with an express term of the ELAs, and Defendant is not asking the
Court to compel arbitration and/or stay this proceeding.
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2020 through the present” that contain a mutual arbitration agreement and/or a collective action
waiver, it shall prepare a proposed protective order and meet with counsel for Plaintiffs regarding
the order on or before July 9, 2024. Defendant shall file a motion and also submit the proposed
protective order to RJDpd@ilsd.uscourts.gov on or before July 12, 2024. If Plaintiffs have
objections to Defendant’s proposed order, they shall file a Response to the Motion for Protective
Order and submit their own proposed order to RJDpd@ilsd.uscourts.gov on or before July 19,
2024.
On or before July 16, 2024, counsel for the parties shall meet and confer to prepare a joint
scheduling order that contains the following deadlines:
1. On or before ________________, Defendant shall provide to Plaintiff any and all
written agreements between itself and “all individuals that worked or performed as
exotic dancers for, at, or in Defendant’s Scarlett’s Cabaret St. Louis during the period
of April 2020 through the present” that contain a mutual arbitration agreement and/or
a collective action waiver and shall disclose all evidence it intends to use to establish
that the agreements/waivers are enforceable.
2. On or before ____________, Plaintiffs shall send any discovery requests that are
related to the issue of collective action waivers and mutual arbitration agreements to
Defendant. Defendant shall make any objections to Plaintiffs’ discovery requests on or
before ____________. The parties shall meet and confer regarding objections to
Plaintiffs’ discovery requests on or before _______________. After the meet and
confer session (if any), and no later than ____________, the parties shall contact
Judge Daly’s chambers to request a discovery dispute conference (if necessary)
regarding Defendant’s objections.
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3. On or before _______________________, Plaintiffs shall disclose to Defendant any
evidence they intend to use to show that any mutual arbitration agreements or collective
actions waivers are not enforceable.
4. On or before _________________, Defendant shall send any discovery requests that
are related to the issue of collective action waivers and mutual arbitration agreements
to Plaintiffs. Plaintiffs shall make any objections to Defendant’s discovery requests
on or before ______________. The parties shall meet and confer regarding objections
to Plaintiffs’ discovery requests on or before _____________. After the meet and
confer session (if any), and no later than _____________, the parties shall contact
Judge Daly’s chambers to request a discovery dispute conference (if necessary)
regarding Plaintiff’s objections.
The completed scheduling order should be emailed to RJDpd@ilsd.uscourts.gov. All the
above discovery, disclosures, and procedures must be completed by December 9, 2024. The
Court will hold a status conference on December 12, 2024 at 9:30 a.m. to discuss the most efficient
way for the parties to present their evidence regarding the mutual arbitration agreements and
collective waivers to the Court. The status conference previously set for October 8, 2024 is
CANCELLED.
At any time prior to December 9, 2024, Plaintiffs may file a brief that contains their legal
arguments regarding the enforceability of the collective action waivers. Within 30 days,
Defendant may file a response brief.
IT IS SO ORDERED.
DATED: June 25, 2024
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s/ Reona J. Daly
Hon. Reona J. Daly
United States Magistrate Judge
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