Rick’s Cabaret Can’t |Shake $10.8M Payout

MANHATTAN (CN) - Rick's Cabaret cannot appeal last month's ruling slapping it with a $10.8 million judgment for labor violations, a federal judge ruled, possibly giving the women who sued the club a leg on claims that go to trial on April 27.

Sabrina Hart and Reka Furedi have been fighting the Midtown Manhattan strip club on behalf of nearly 2,300 current and former dancers since 2009.

On Nov. 14, their lawsuit hit pay dirt for the first time, as U.S. District Judge Paul Engelmayer awarded their class millions on three of the charges of the lawsuit. The ruling resolved minimum wage violations, unlawfully retained tips, and improper fees under state law.

Rick's sought an interlocutory appeal of some of the legal conclusions that led to that damages amount.

The women's lawyer, Anna Prakash, of the Minneapolis-based firm Nichols Kaster PLLP, said in a phone interview that the club still faces up to roughly $20 million more in penalties from a jury for tip-out damages and wages.

Rick's could stack up even more liabilities if the jury finds its alleged violations willful, which would send the case back to Engelmayer to calculate further damages, Prakash said.

With trial looming, Rick's Cabaret wanted to tilt the law in its favor by seeking to decertify the class challenging its mandatory "tip-out" fees of $60 a day, and a finding that it could use this amount to offset its liabilities from the lawsuit.

In a 21-page opinion on Wednesday, Engelmayer rejected these bids and declined to grant an interlocutory appeal.

Prakash celebrated her clients' ongoing "winning streak" in a statement.

"The court's decision is an important victory for the plaintiffs in this case, as well as for all victims of unlawful practices who might not be willing to pursue claims individually or might believe they do not have enough proof," Prakash said. "The decision affirms that the class action mechanism is alive and well, that those who have been hurt by unlawful actions can pursue damages as a group, and that employees should not be punished as a result of their employer's failure to keep records but, rather, should be allowed to prove their damages based on their recollections and common proof."

Rick's lawyers did not respond to a request for comment by press time.

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