8 comments

10 Million in Back Pay

Nov 15, 2014, 6:48 PM

So this comes up again. Are dancers at a club independent contractors or employees? A NYC Judge was convinced of the latter and ordered a judgment of at least 10m in back pay for 2000 past and present dancers of Rick's Cabaret in NYC. It will go to trial to see of they can get more.

cnn.com

Being a selfish PL, I of course want to know how this affects ME. First off, I always thought dancers had independent contractor status because the loop-hole in the law that allows strip clubs to begin with is that the girls are simply practicing self-expression and therefore are protected by the first amendment clause of free speech. If they are now considered employees, is it still their self expression and free speech or their job? How is that covered by the law? If they're an employee, and as odd as it might sound in this industry, could sexual harassment accusations against the employer or customer not be too far behind?

On the other hand, if they are now employees, clubs could have the right to take all the money dancers make from dances and simply provide them with an hourly wage, along the lines of selling the club's "services" which they are providing as part of their employment pushing the girls to ask for exceedingly higher tips.

Lastly, how much more would dances cost, whether to cover dancers' wages of other costs associated with it? It won't be long before they start wanting insurance, vacation, overtime and sick leave.

I believe the crux on which this decision was made was that Rick's controlled the dancers too much. By giving them shifts and rules and expectations to work in the club with probable penalties if they didn't follow the rules or show up for their shifts, the dancers appeared more like defacto employees rather than independent freelancers. This makes it distinctly a Rick's problem and not necessarily an industry problem. The lawsuit does only call out Rick's NYC and has not expanded to other clubs. With this apparent victory though, does it encourage other dancers to file compensation based suits in their own clubs? Keep an eye out for results in a similar case against Sapphire's in Las Vegas.

Btw, Judge felt it was immaterial and beside the point to how much money these girls made while dancing which Rick's said was much more than minimum wage.

Thoughts?

comments (8)

Dougster11 years ago

DOOMED!

The dancers! The stock ticker! PLs who will get passed along the costs!

jackslash11 years ago

The independent contractor system, it seems to me, is the best for dancers, PL's and club owners. But the club owners ruin it by treating dancers as employees. Owners are losing these cases because they are clearly violating the law.

shadowcat11 years ago

What really frosts my ass in all of these cases is the fact that they are all brought after the dancers are no longer working at the club. It was great while they were working but now that they're flipping burgers they see it as a way of getting something for nothing.

I'm certainly not an attorney but wouldn't it be prudent for clubs now a days have new dancers sign an agreement that they agree that they are working as independent contractors.

Joe from NJ11 years ago

Yes, when a club is too strict, they are employees. So club owners, lighten up and let the girls decide their hours, etc., and you will not have problems.

JohnSmith6911 years ago

If the girls were truly treated as independent contractors it would make for a worse club experience. The girls could charge whatever they want so every dance would become a negotiation. They could come and go whenever they want so the club might be empty half the time. There would be no standards for dress, appearance or conduct. The girls could not be required to talk to customers and could all just do the wanna dance routine. Cases like this concern me because it pressures clubs to take this sort of hands off approach. Despite how stupid some club managers are, we are better off having them run things than letting a bunch of strippers each independently decide how they want things to be done.

Dougster11 years ago

Is this why the stock dropped so much on Friday?

JackKash11 years ago

I think there has to be a delicate balance. The club needs to set some rules for the establishment to keep the girls in line but also give them the autonomy of an independent. The fine line is exactly what those rules are and how a court may interpret them.

I saw stock dropped something like .40 on Friday which is a big deal for an $11 share price. Rick's had quickly released a statement saying they weren't required to pay anything yet, it was still to go to trial and they would certainly appeal. If they have their way, these girls will be old hags by the time they see a cent from this.

Cheo_D11 years ago

This happened to Rick's NY, it has also happened with the Flashdancers chain and the Larry Flynt's Hustler location in NYC, also to Sapphire's in Vegas and it seems to be coming the way of like six other major Vegas as well as various franchisees of Spearmint Rhino and Deja Vu. Basically it's to a huge extent a matter of whether the "independent contractor" thing is the club just trying to weasel around certain labor and tax obligations(*) while de-facto treating the dancers as wage workers. Many of these lawsuits could have been avoided had the club owners taken the bother to draft a proper contract, as JackKash said, "setting some rules clearly but respecting the autonomy of an independent". There's nothing unreasonable about a dress code or a requirement that you provide X number of hours or else the contract is rescinded, but it has to be clear how far can each of the parties go. It's really not such an impossible task, the clubs should be able to pay a lawyer with experience in entertainer gigs or general labor to draft a fair contract.

(* and also, to avoid responsibility/liability for what the dancer does or if something goes badly)

In the case of the NYC clubs, there is also the element of the large value of the "nut" the dancers have to put in upfront, house fees which can be several hundred dollars, plus fines that are imposed for absence or tardiness (i.e. you miss a day, the next day you start TWICE as deep in the hole).

Elsewhere I've read that some clubs have started providing the option of signing on as EITHER employee vs. contractor, and most dancers then sign on as contractor, as they prefer it themselves for many of the reasons mentioned above. According to Arnold Snyder over at ToplessVegas, in that town the dancers would rather not choose "employee" since in Vegas, there's tip pooling (all tipped employees must put in X% of their tip into the pot to be split so nobody goes home completely tipless, this is something that's ususally more relevant for food servers who make below minimum wage; in some other states it's not legal)

Another workaround for the "employee" status could be that the dancer's status becomes akin to that of a salesperson on commission -- i.e. she gets a base wage plus a cut of the sales (of drinks, of private room time, of dances) she makes, plus the tips. But she may not negotiate below a certain price point w/o management approval.

As to whether employee dancers would start asking for a lot of overhead benefits -- well, in many cases those laws apply to full-time employees, so the clubs could just limit how many hours they are hired according to the laws of the state in question. This is already standard practice for many employers. Just NEVER demand more.