MANHATTAN (CN) - Strippers deserve the minimum wage, a federal judge ruled Tuesday, citing their boss's admission that, "without the girls, we're just selling overpriced beers at a sports bar with bad TVs."
Sabrina Hart and Reka Furedi had filed the class action in 2009 on behalf of more than 1,900 current and former "entertainers" at Rick's Cabaret, a strip club in Midtown Manhattan.
Three corporate entity owners - Rick's Cabaret International, RCI Entertainment (New York) and Peregrine Enterprises - were named as defendants.
The dancers claimed that the club wiggled out of its obligations under the Fair Labor Standards Act and New York Labor Law by treating them as independent contractors instead of employees.
Rick's insisted that it gave the women a fair shake by letting them keep so-called "performance fees," starting at $20 for lap dances, table dances and semi-private room encounters. While the women keep all money paid to them in cash, Rick's had a different way of handling its earnings from credit cards.
Customers who pay by credit card can purchase vouchers as "Dance Dollars." Though the voucher is worth $20, it comes at a $24 price tag. When Rick's cashes out a used voucher, it gives the dancer $18 and keeps the remaining $6.
The court heard that more than 87 percent of Rick's strippers come home from work earning less than federal minimum wage during at least one week of their employment. One unidentified plaintiff claimed that she made less than minimum wage for 39 of the weeks she danced there.
U.S. District Judge Paul Engelmayer found Tuesday that the "performance fees" were actually "tips," which were no substitute for wages.
Far from being independent, Rick's "entertainers" fell under "tight control, indeed, control fairly described as micromanagement" by the club, the 65-page opinion states.
The club's written guidelines dictated "the length of a dancer's dress, the height of her shoe, the meetings she was required to attend, the entrances she was allowed to enter, the amount of money she was required to tip-out at the end of each night, or her use of chewing gum or stiletto heels, and many more," according to the ruling.
These strippers were no day traders, Engelmayer continued.
"In this respect, the court agrees with the Fifth Circuit that exotic dancers are 'far more closely akin to wage earners toiling for a living, than to independent entrepreneurs seeking a return on their risky capital investments,'" he wrote.
Engelmayer also noted: "Courts have further consistently held that there is limited genuine skill required to be an exotic dancer."
Rick's pointed out that their dancers do not tend to stay at the club too long: Nearly 60 percent of their strippers dance 20 or fewer times, around 15 percent perform just once, and nearly 50 percent grace the stage 10 or fewer times.
The judge noted, however, that this does not make them different from waiters, ushers and bartenders, who are also employees under labor law.
Although his lawyers called the strippers one aspect of the club's business, Rick's president Eric Langan stated the obvious by calling the "entertainers" the "most important thing" for the cabaret. He spoke about his club's "overpriced beer" and "bad TVs" later in his testimony, according to the ruling.
Although Engelmayer found Peregrine liable for wage violations, he will have a jury untangle which of Rick's other corporate entities must pay, and whether they operated in bad faith.
The parties will meet on Sept. 23 to discuss whether to settle the remaining claims or take them to trial.
Meanwhile, Michelle Drake, a lawyer for the dancers, said that she was "thrilled" with the decision, a culmination of four years of litigation.
"This ruling is particularly important for women who work in the world of adult entertainment, where workers are often vulnerable and willing to work in illegal circumstances out of desperation," Drake said in a statement.
In a follow-up phone interview, Drake noted that this decision falls in a "long line" of state and federal court opinions upholding the salary rights of exotic dancers, which she traced to President Bill Clinton's former Secretary of Labor Robert Reich.
"It's my sincere hope that cases that address this issue will inform women in this industry of this issue," and cause the clubs to voluntarily reform their policies, Drake added.
Rick's lawyers did not respond to a request for comment by press time.
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