DETROIT and ATLANTA – Exotic dancers at four gentlemen’s clubs in two states seek class-action status for their lawsuits against the clubs’ owners. In all cases, the dancers claim they were misclassified as independent contractors when they should have been treated as employees.
The lawsuits, filed in federal courts in Detroit and Atlanta, target clubs including The Coliseum, Flight Club and Penthouse Club in the former city and the Foxy Lady Lounge in the latter. The dancers claim the scope and requirements of their jobs fit the definition of “employee” under federal and state labor laws. Furthermore, the lawsuits claim, the clubs illegally denied dancers and other employees wages and benefits to which they would have been entitled had they been classified correctly.
According to the Detroit lawsuit, club owner Alan Markovitz intentionally misclassified dancers, waitresses, shot girls and others in order to avoid paying statutory minimum wages, as well as Social Security, Medicare and unemployment taxes. In addition, he demanded employees pay for the privilege of working in his establishments and deducted other fees, fines and penalties from their earnings when they were late for a shift or otherwise did not adhere to management’s allegedly arbitrary rules. The suit seeks damages, back pay, restitution, attorney fees, and injunctive and declaratory relief.
“This is an illegal pay scheme designed to increase the nightclub’s profit margins at the expense of basic employee rights,” said lead counsel for the plaintiffs Megan Bonanni.
She plans to use Markovitz’s own words against him. In his autobiography, Topless Prophet: The True Story of America’s Most Successful Gentleman’s Club Entrepreneur (AM Productions, October 2009), Markovitz claimed he originated an employment model now used by most adult cabarets in the U.S.
In the book, Markovitz advises that his business model increases a club’s profit margin by requiring “…dancers [to pay] the club for the privilege of making an income on the premises, not as hourly wage earners, but as independent contractors.”
In fact, the model is common across the portions of the adult entertainment industry that rely on performing artists. It’s not that uncommon outside the adult industry, either, according to the U.S. Department of Labor, which estimates about one-third of all businesses misclassify their employees as contract labor instead of employees for exactly the same reasons.
The Georgia case employs the same basic arguments, charging club owners with requiring kickbacks in violation of the federal Fair Labor Standards Act. In addition, according to the Georgia lawsuit, the club’s owners paid dancers no wages, despite requiring the so-called independent contractors to work schedules determined by the club and attend meetings outside their scheduled shifts. If the dancers failed to show up for an assigned shift or meeting, the club assessed fines in addition to the $35 to $70 each dancer was required to pay per shift, court documents reveal.
The Georgia lawsuit also seeks damages, unpaid wages and overtime, attorney fees and injunctions.
Both lawsuits stand a good chance of success before the courts, observers opine. In September, a federal court in New York ruled Rick’s Cabaret improperly classified exotic dancers as contractors and ordered the club to pay back wages to 1,900 who had worked at the adult nightclub during the past three years. The court also declared Rick’s must treat dancers as employees from now on, including paying them at least the state-mandated minimum wage, which is $7.25 an hour.
Similar lawsuits filed by dancers are pending in several other states.
