Labor & Employment Law

Strippers Claim Coverage Under FLSA And File Class Action!

By Mark Tabakman

A federal judge has conditionally certified a class action which was instituted by a 'class' of strippers who allege that the Penthouse Executive Club, a hot spot of entertainment in Manhattan, did not pay them at least the minimum wage and failed to pay overtime. There are also allegations of illegal diversions and deductions of and from their tips.  The case is entitled In re: Penthouse Executive Club Compensation Litigation, filed in the federal court in the Southern District of New York.

As I have often written, the (probably) best defense to an attempt to certify a class is to argue that individual assessment is necessary, thus defeating the commonality requirement.  The defendant argued that in this case but the Court disagreed.  The Court found sufficient commonality or similarity between the wage hour practices as applied to the strippers to warrant certification.  As the Judge aptly stated, 'this argument borders on specious - members of the proposed class all hold the same job title, have the same job responsibilities, work at the same location and, by extension, are subject to the same ownership and management.'

There are seven so-called exotic dancers who have opted into the lawsuit; there were three lead, original plaintiffs.  These actions date back more than a year, when Leslie Liwanag filed a collective action against the Penthouse Executive Club.  Two more suits of similar nature were filed and the cases have been consolidated.

The lawsuits are virtually identical.  They charge that the employer did not pay minimum wage, charged an allegedly illegal 'house fee' and failed to reimburse the dancers for their uniforms, which would be a violation of New York State law.

Tip violations have also been alleged.  The Club supposedly requested that customers tip the dancers in vouchers labeled as 'Executive Money,' which were sold by the Club to customers.  The Club then allegedly assessed a 20% service fee, which denied the strippers their full tips.

The Club has defended by also asserting that the dancers were not employees, but rather independent contractors, as they were in charge of their own performances, supplied their own garb and could work for other clubs.  This is a dubious defense, absent proof that the dancers did in fact work elsewhere.
 

Full post as published by Wage & Hour - Development & Highlights on November 02, 2010 (boomark / email).