Gentlemen's club files counterclaim against dancers
samsung1
Ohio
A lawsuit claiming thousands of current and former topless dancers at the Sapphire Gentlemen's Club in Las Vegas aren't really independent contractors and are owed back pay has advanced toward a March trial — with a twist.
The twist is that the owner of the Sapphire has not only denied it's violating wage and hour laws with its current independent contractor system, but that it has filed a counterclaim against the dancers who filed the lawsuit.
Sapphire bills itself as the world's largest gentlemen's club with some 400 dancers nightly.
While independent contractor arrangements are the standard practice in the industry, the November 2009 lawsuit filed in Clark County District Court claims Sapphire has so many rules governing the dancers' working conditions that they don't qualify as independent contractors.
Dancers, for instance, are required to work a minimum number of hours — six or longer — per shift, the suit claims. It says they are prohibited from leaving the premises during their shift, can't leave with customers, can't date or socialize with customers during their off hours and must entertain customers “according to means and methods prescribed by†management.
They must pay club managers and employees for the right to work at the club, charge minimum fixed fees for table and lap dances, promote sales of alcohol and other drinks, accept offers of drinks from customers, appear on stage to dance at fixed times, comply with a dress code and wear approved costumes and uniforms, the suit charges.
Failure to follow the rules will result in suspension or termination, the lawsuit charges.
The dancers won an initial victory in the case May 24 when District Judge Kenneth Cory granted their motion to certify the case as a class action representing topless dancers, erotic dancers, strippers, entertainers and hostesses who worked at the club since November 2006.
That certification came despite arguments by Sapphire that no current dancers are plaintiffs in the lawsuit, that the plaintiffs are just a handful of former dancers, that the proper place to resolve wage disputes is with the Nevada Labor Commissioner and that what's really driving the lawsuit is a group of out-of-state attorneys trying to change Nevada's longstanding strip club industry procedure.
“The Labor Commissioner hasn't seen fit to enforce labor laws against clubs in this state. The (U.S.) Department of Labor hasn't done that. The only people that have been interested in doing that are effectively a group of lawyers coming over from California importing their tactics they've used there,†Sapphire attorney Mark Ferrario said during oral arguments in May.
Ferrario, of the firm Greenberg Traurig LLP, and co-attorney Tami Cowden submitted to the court 142 declarations signed by Sapphire dancers saying they favor the current independent contractor arrangement.
The dancers signing the statements were told by the attorneys that should the lawsuit be successful, it's likely they would earn minimum wage and keep any tips.
“I do not agree with those former dancers (suing the club) because I do not consider myself an employee of Sapphire. I am an independent businesswoman and I can dance at Sapphire, or other clubs, or work other jobs when I am not performing at Sapphire,†the dancers' declarations said. “These former dancers cannot represent my interests because I do not want to change the system at Sapphire, my use of Sapphire's facilities or how I make money from customers of Sapphire.â€
But Michael Rusing, one of the attorneys suing Sapphire, argued topless dancing clubs are seeking legitimacy.
“If they're going to seek legitimacy they have to accept the fact that they need to have a legitimate relationship with the dancers, and if they're employees, they're employees and they need to be treated as such,†he argued.
He said there's been a lot of concern nationwide about “large-scale abuse of independent contractor status†in the United States, and the Sapphire case is a prime example.
“The bottom line is that you cannot contract around the wage and hour law, any more than you can contract or waive discrimination laws, child labor laws or those sorts of things that were enacted and designed to protect these very people who are being pressured to waive this status,†he said.
He downplayed the importance of the declarations submitted by the dancers, suggesting they were pressured to sign the papers and asking “were the numerous nonobvious benefits of having employee status explained to them? Unlikely.â€
“Plantation owners could have obtained affidavits from slaves, saying that they liked things just the way they were. We've got room and board, we get to work outdoors, etc.,†he added.
Also among the attorneys representing the dancers is Robert Starr of Woodland Hills, Calif., who has a Web site called exoticdancerrights.com explaining dancers' rights.
Sapphire, in the meantime, filed a counterclaim against the five former dancer plaintiffs in the lawsuit, charging breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment and conversion.
Sapphire charged in the counterclaim that since the former dancers are trying to cancel their independent contractor agreements, if they're successful they must return to Sapphire “dance fees†paid to the dancers by lap dance customers.
“Should it be determined that counterdefendants were not independent contractors, then the dance fees rightfully belonged to (Sapphire owner) SHAC LLC,†the counterclaim charges.
Sapphire is trying to have the counterclaim extended so all the class-action plaintiffs would also be named as defendants in its counterclaim.
That means, if the motion is successful and the class-action plaintiffs are successful in their lawsuit, Sapphire could seek the return of “dance fees†from all dancers received since November 2006.
In court papers, the Sapphire attorneys called the class-action plaintiffs: “Former exotic dancers who received thousands of dollars in fees for their performances while paying only minimal fees for use of Sapphire's venue.â€
They said the former dancers “claim entitlement to protection under Nevada's minimum wage laws despite their repeated acknowledgement that they are not employees. Purporting to speak for what they claim are thousands of other independent contractors still engaged in their business as sophisticated performers, plaintiffs seek to retroactively alter the longstanding nature of exotic dancing contracts in Nevada, transforming highly compensated, independent business women into minimum-wage employees.â€
http://www.lasvegassun.com/news/2010/oct…
The twist is that the owner of the Sapphire has not only denied it's violating wage and hour laws with its current independent contractor system, but that it has filed a counterclaim against the dancers who filed the lawsuit.
Sapphire bills itself as the world's largest gentlemen's club with some 400 dancers nightly.
While independent contractor arrangements are the standard practice in the industry, the November 2009 lawsuit filed in Clark County District Court claims Sapphire has so many rules governing the dancers' working conditions that they don't qualify as independent contractors.
Dancers, for instance, are required to work a minimum number of hours — six or longer — per shift, the suit claims. It says they are prohibited from leaving the premises during their shift, can't leave with customers, can't date or socialize with customers during their off hours and must entertain customers “according to means and methods prescribed by†management.
They must pay club managers and employees for the right to work at the club, charge minimum fixed fees for table and lap dances, promote sales of alcohol and other drinks, accept offers of drinks from customers, appear on stage to dance at fixed times, comply with a dress code and wear approved costumes and uniforms, the suit charges.
Failure to follow the rules will result in suspension or termination, the lawsuit charges.
The dancers won an initial victory in the case May 24 when District Judge Kenneth Cory granted their motion to certify the case as a class action representing topless dancers, erotic dancers, strippers, entertainers and hostesses who worked at the club since November 2006.
That certification came despite arguments by Sapphire that no current dancers are plaintiffs in the lawsuit, that the plaintiffs are just a handful of former dancers, that the proper place to resolve wage disputes is with the Nevada Labor Commissioner and that what's really driving the lawsuit is a group of out-of-state attorneys trying to change Nevada's longstanding strip club industry procedure.
“The Labor Commissioner hasn't seen fit to enforce labor laws against clubs in this state. The (U.S.) Department of Labor hasn't done that. The only people that have been interested in doing that are effectively a group of lawyers coming over from California importing their tactics they've used there,†Sapphire attorney Mark Ferrario said during oral arguments in May.
Ferrario, of the firm Greenberg Traurig LLP, and co-attorney Tami Cowden submitted to the court 142 declarations signed by Sapphire dancers saying they favor the current independent contractor arrangement.
The dancers signing the statements were told by the attorneys that should the lawsuit be successful, it's likely they would earn minimum wage and keep any tips.
“I do not agree with those former dancers (suing the club) because I do not consider myself an employee of Sapphire. I am an independent businesswoman and I can dance at Sapphire, or other clubs, or work other jobs when I am not performing at Sapphire,†the dancers' declarations said. “These former dancers cannot represent my interests because I do not want to change the system at Sapphire, my use of Sapphire's facilities or how I make money from customers of Sapphire.â€
But Michael Rusing, one of the attorneys suing Sapphire, argued topless dancing clubs are seeking legitimacy.
“If they're going to seek legitimacy they have to accept the fact that they need to have a legitimate relationship with the dancers, and if they're employees, they're employees and they need to be treated as such,†he argued.
He said there's been a lot of concern nationwide about “large-scale abuse of independent contractor status†in the United States, and the Sapphire case is a prime example.
“The bottom line is that you cannot contract around the wage and hour law, any more than you can contract or waive discrimination laws, child labor laws or those sorts of things that were enacted and designed to protect these very people who are being pressured to waive this status,†he said.
He downplayed the importance of the declarations submitted by the dancers, suggesting they were pressured to sign the papers and asking “were the numerous nonobvious benefits of having employee status explained to them? Unlikely.â€
“Plantation owners could have obtained affidavits from slaves, saying that they liked things just the way they were. We've got room and board, we get to work outdoors, etc.,†he added.
Also among the attorneys representing the dancers is Robert Starr of Woodland Hills, Calif., who has a Web site called exoticdancerrights.com explaining dancers' rights.
Sapphire, in the meantime, filed a counterclaim against the five former dancer plaintiffs in the lawsuit, charging breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment and conversion.
Sapphire charged in the counterclaim that since the former dancers are trying to cancel their independent contractor agreements, if they're successful they must return to Sapphire “dance fees†paid to the dancers by lap dance customers.
“Should it be determined that counterdefendants were not independent contractors, then the dance fees rightfully belonged to (Sapphire owner) SHAC LLC,†the counterclaim charges.
Sapphire is trying to have the counterclaim extended so all the class-action plaintiffs would also be named as defendants in its counterclaim.
That means, if the motion is successful and the class-action plaintiffs are successful in their lawsuit, Sapphire could seek the return of “dance fees†from all dancers received since November 2006.
In court papers, the Sapphire attorneys called the class-action plaintiffs: “Former exotic dancers who received thousands of dollars in fees for their performances while paying only minimal fees for use of Sapphire's venue.â€
They said the former dancers “claim entitlement to protection under Nevada's minimum wage laws despite their repeated acknowledgement that they are not employees. Purporting to speak for what they claim are thousands of other independent contractors still engaged in their business as sophisticated performers, plaintiffs seek to retroactively alter the longstanding nature of exotic dancing contracts in Nevada, transforming highly compensated, independent business women into minimum-wage employees.â€
http://www.lasvegassun.com/news/2010/oct…
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25 comments
Translation: I want to continue to be paid in cash in the club, off the books, so I can under report my income and still keep making money on the side from my regulars and sugar-daddys.
I tried to visit Sapphire's last January when I was in Vegas. It was late and I didn't plan on being there anymore than 1 hour before getting to bed. So I just wanted to check the place out. Well, despite the fact I drove myself, passed a wanding by security, and said I wouldn't be there long, head door bouncer told me I would have to cough up $30 for entry. I was looking to pay $10. So I turned around and left. But what I noted was the swarm of gals standing just barely inside the cavernous club down a (40 foot hall) waiting for the fresh meat. I'm sure I would've been pawed all over ... Maybe an okay experience for some guys, but for me desperation doesn't equate to attractiveness.
It will be interesting if they win, then as employees they are gonna owe that money - you don't see best buy employees stuffing their pockets with revenue from sales do you? I hope they kept their tax returns to help compute how much each will owe the strip club instead of going by their usually stated outrageous amount per hour bullshit!
tax returns? strippers? (I assume that was a sarcastic comment.)
Not long to go now, 21 days :-))
All in all, if you are exercizing strict control over virtually every aspect of when and how the activities are performed there really isn't any independence.
California recently put an and to the nonsense and said that club dancers had to be employees. The last I saw the clubs are still doing fine and outranking the Nevada Clubs.
The top wage for dancers in Seattle in 2001 was $27 per hour, the top wage in San Francisco in 2003 was $26 per hour. http://en.wikipedia.org/wiki/Lusty_Lady
The Lusty lady in Seattle went out of business, not sure if it was because of the unionization or if the customers quit spending as much money.
Has anyone ever heard of a case where that obvious legal dodge has ever actually worked though? Many strip clubs make this claim when they are caught red-handed as basically houses of prostitution, and I'm not sure how often it actually works.
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"It will be interesting if they win, then as employees they are gonna owe that money"
That counter-claim is just an idle threat from the strip club. It'll never fly.
"you don't see best buy employees stuffing their pockets with revenue from sales do you?"
Wow, you've never heard of employees that are paid (at least partially) through an incentive program to increase sales?
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|Wow, you've never heard of employees that are paid (at least partially) through an incentive program to increase sales?
Yes, I have and I have even heard of SPIFs! But you and I both know the incentive payment isn't at the time of the sale and that the transaction is handled by a "disinterested" employee at the cash register.
Huh?? Someone that is working at least partially for a commission on sales will be more incentivized to make more & better sales, period.
Whether they realize it or not (& I understand that there are give & takes in any scenario), dancers are being ripped off by strip clubs with their extensive rules (which the dancers basically have no say in), tip outs, upfront charges for the "privilege" of working there, etc., etc.. The world really won't come to end if they get treated like every other regular employee. This whole "independent contractor" thing is just a huge tax dodge all-around. You & I have to pay taxes on what we earn, why should they get off scott free??
Who said that?? Once again, you've never heard of employees working, even partially, on commission?? Come on now...we're going round & round here.
That will likely be a significant change for many of these girls, and not necessarily to their liking. The smart ones will still get over, of course, but those are only marginally ahead now, may find themselves working harder and getting less. It might work out better in the long run, if all the other labor laws regarding employees are enforced, but I think there will be some short term pain for a significant segment of the dancer population.
Either that or the clubs will start *explicitly* setting up independent contractor relationships, with well defined terms, and complying with *those* laws. That wouldn't be a bad thing either, IMO, as long as the girls don't get fucked in the terms.
So?? Once again, you & I have to pay taxes on what we earn, why should they get off scott free??