Big Pay Day for Strippers Suing Rick’s Cabaret

MANHATTAN (CN) - On their way to trial in a minimum-wage dispute, Rick's Cabaret strippers will have $10.8 million in their G-strings before their trial even starts, thanks to a Friday ruling that endorses their expert witness and their view on "Dance Dollars."

Sabrina Hart and Reka Furedi represent more than 1,900 current and former dancers suing the Midtown Manhattan strip club since 2009.

U.S. District Judge Paul Engelmayer took the club's corporate owners - Rick's Cabaret International, RCI Entertainment (New York) and Peregrine Enterprises - to task last year for wiggling out of their minimum-wage obligations under state and federal labor law.

That ruling quoted Rick's President Eric Langan as saying: "without the girls, we're just selling overpriced beers at a sports bar with bad TVs."

Engelmayer gave the class their back minimum wages, and much more, today in a ruling that says the bosses stiffed them on their hard-earned tips paid with "Dance Dollars," which customers buy when they want to use a credit card instead of cash.

A customer has to swipe $24 on a card to receive a $20 voucher, but that translates to just $18 for the dancer when she cashes out.

Engelmayer ruled that this misleads the customers about where their tips are going.

"A reasonable customer paying that dancer $20 (or more) in cash would have expected, accurately, that the dancer would keep the entire amount," he wrote (parentheses in original). "There is no sound reason to conclude that a customer who chose to pay in Dance Dollars would have viewed these payments as any less a gratuity to be retained by the dancers."

Although Dance Dollars have a disclaimer printed on them stating they are "not valid for gratuities," Engelmayer doubted that "a customer in the sybaritic setting of an exotic nightclub would choose or have the focus to read (let alone absorb) this disclaimer."

("Sybaritic," or pleasure-seeking, derives from the ancient Greek city of Siberis, now located in Italy, renowned for its hedonistic inhabitants.)

Engelmayer also noted that the prose of the disclaimer is "far from clear."

"A reasonable customer, mindful that the Dance Dollar functioned as an alternative to paying the dancers in cash, could reasonably conclude that the disclaimer meant only that a Dance Dollar was not valid for use to pay gratuity for drinks or other items purchased in the club," the 51-page opinion states.

Engelmayer's ruling additionally green-lights the esteemed economist whom the strippers have tapped to testify on their behalf.

David Crawford, a fellow at the University of Pennsylvania's prestigious Wharton School of Business, wants to bring his 35-plus years of experience in litigation to present his modeling of 137,880 "Clubtrax" records.

The economist's report on this data is "evenhanded, reasonable, and intellectually rigorous," Engelmayer found.

Rick's complicated Crawford's work by keeping lousy time records, the court found.

"Had defendants' time records been complete, the task, in fact, would have been wholly mechanistic," Engelmayer wrote. "The gaps in the records, however, called upon Dr. Crawford to exercise judgment as to what reliable proxies would be for the missing data (e.g., log-out times). The issue for the court is whether Dr. Crawford's methodology to fill these lacunae is reliable. It is."

Granting the women partial summary judgment, Engelmeyer cited that data in awarding them $10,866,035.

The sum is roughly $8 million less than the strippers sought.

Meanwhile, the judge promised to set a trial date over the remaining damages "shortly."

A lawyer for Rick's Cabaret declined to comment, and the lawyers for the women did not immediately return a request for comment.

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