The case of Steelman v. Hirsch, No. 06-1007 (4th Cir. January 10, 2007) (PDF), is, in essence, a lesbian divorce case. The couple involved in the suit were not only domestic partners, but business partners. They operated a dog-grooming business called "Hair of the Dog," which collapsed along with their romantic relationship.
The Plaintiff, Tammy Steelman, sued her former partner, Defendant Michelle Hirsch, under the Fair Labor Standards Act (FLSA) alleging she was Hirsch's employee, and that she was owed unpaid wages. The district court found that Steelman was not an employee, and that instead she worked to build a business with Hirsch, without regard to any precise compensation for the precise hours she labored at Hair of the Dog. In Steelman's own words, she was working "for their future." It dismissed Steelman's federal claim, and refused to exercise supplemental jurisdiction over the remaining state law claims, dismssing them without prejudice.
On appeal, the Fourth Circuit affirmed "because the FLSA covers only 'employees' and cannot be stretched to reach the particular arrangement at issue here." The Court reasoned that the "FLSA cannot be transformed into a blunt instrument to resolve all manner of financial disputes." However, Steeleman is free to pursue her state law claims for a share of the business.
That's right, folks--round 2 is coming: "Share of the Dog."