Nearly all strip clubs classify the dancers who entertain their clients as independent contractors, which means they don’t have to pay them minimum wage — many pay them no wages at all, with dancers relying solely on tips — offer them benefits, or worry about being held liable for sexual harassment or other discrimination claims. Strippers have started fighting back, bringing lawsuits claiming that this treatment is illegal and that they are in fact regular employees deserving of all the protections that come with the designation.
And now, dancers have a significant court ruling in their favor.
On Wednesday, the U.S. Court of Appeals for the Fourth Circuit issued a decision confirming that a group of six former dancers who worked for Fuego Exotic Dance Club and Extasy Exotic Dance Club in Maryland should have been treated like employees, not contractors. It affirmed a district court decision that found that the dancers were illegally misclassified and deserved to be paid back wages and damages by the clubs.
In the opinion, Judge J. Harvie Wilkinson III — widely seen as a staunch conservative who was appointed by President Ronald Reagan and was considered for the Supreme Court by President George W. Bush — writes, “The clubs insist they had very little control over the dancers. Plaintiffs were allegedly free in the clubs’ view to determine their own work schedules, how and when they performed, and whether they danced at clubs other than Fuego and Extasy. But the relaxed working relationship represented by defendants — the kind that perhaps every worker dreams about — finds little support in the record.” He concludes, “We agree with the district court that, based on the totality of the circumstances presented here, the dancers at Fuego and Extasy were employees covered by the FLSA [Fair Labor Standards Act] and analogous state laws. They were not independent contractors.”
In reaching that conclusion, the court considered the six factors that are used to determine whether someone can be counted as an independent contractor a full employee. One key consideration is how much control an employer exerts and whether the worker is economically dependent on the business or is a business herself. http://thinkprogress.org/economy/2015/11/04/3718022/strippers-rights/ The circuit court found that the clubs exerted significant control over the dancers through a variety of practices, which creates an employer/employee relationship. Dancers testified that the clubs dictated their schedules and that they had to sign in when they got to the club. The clubs set the fees they could charge for services and charged a “tip-in” fee to enter. They made dancers follow rules such as prohibiting them from leaving the club and returning later in the night, requiring them to wear dance shoes at all times, and banning them from bringing friends or family during work hours, and if they violated the rules they could be suspended or fired. The club managers also coached dancers who they thought didn’t have the “right attitude” or behavior, while the owners were in charge of the clientele and atmosphere through advertising, hours, food and beverages, and lighting and music.
And despite having to pay an entrance fee, the clubs didn’t pay the dancers anything at all. “At no point did the clubs pay the dancers an hourly wage or any other form of compensation,” the opinion reads. Instead, the only money dancers made was the fees and tips they got from the club’s clients.
The clubs, for their part, always contested that they didn’t have significant control over the dancers, insisting instead that dancers were free to come and go and only used the clubs as rented spaces. “The clubs denied that plaintiffs were employees at any point of their working relationship and raised counterclaims, all of which were unsuccessful, for breach of contract, unjust enrichment, conversion, and fraud,” the court opinion says. Neither the clubs nor owner Uwa Offiah could be reached for comment.
“We must be mindful in the end that we are applying a statute which Congress thought was necessary to provide ‘fair labor standards’ for employees, including those marginalized workers unable to exert sufficient leverage or bargaining power to achieve adequate wages in the absence of statutory protections,” Wilkinson concludes his opinion. “To rule for the clubs under the circumstances here would run too great a risk of undercutting the Act’s basic aim.”
Many other judges have come to the same conclusion. The current wave of litigation began with a 1994 lawsuit brought against a club in San Francisco, where more than 500 dancers successfully challenged being switched from employees to independent contractors and won $2.85 million. The lawsuits have since piled up, and one reached the Nevada Supreme Court in 2009, in which the court ruled that all clubs in the state should designate dancers as employees.
But the practice of classifying dancers as independent contractors is still widespread throughout the industry. And it may not be hard to see why: it represents a good deal for club owners. With that designation, it means clubs don’t have to pay hourly wages or overtime, carry workers compensation policies or pay into unemployment insurance, or worry about sexual harassment and discrimination cases, since only workers classified as employees can bring them.