…and win the first round in a Wages and the Fair Labor Standards Act (FLSA) suit! A class of exotic dancers won the right to file a FLSA collective action against the Philadelphia strip club for which they worked. The US District Court of the Eastern District of Pennsylvania ruled in Verma v. 3001 Castor that the strippers were mislabeled by The Penthouse Club as independent contractors instead of employees, and thereby have standing in their claims to minimum wage, overtime compensation, and all gratuities earned.
Though strippers aren’t common subjects within fair labor discussions, this isn’t exactly an ‘exotic’ case. After ‘stripping’ away the specifics, it turns out this FLSA dispute is quite common. Employers often try to take on workers as independent contractors instead of employees, believing this distinction will absolve them from associated liabilities and responsibilities.
US District Judge Anita Brody’s ruling of the strippers as employees instead of independent contractors was based on an analysis of the degree of oversight the club maintained over the dancers’ work.
The strippers at The Penthouse received no wages and relied only on compensation from customers. Despite this, the club took a whopping 30-40% of the dancers’ profits and set the price and duration of all private dances. Additionally, the dancers were charged a stage rental fee in order to work a shift, were forced to give a cut of their tips to different members of the club staff, and were charged fines for things like chewing gum, using their cellphones, and not wearing their hair down. Talk about some serious micromanaging!
The club argued that dancers have the flexibility to set their own schedules and if they ‘hustle’, can make nearly $1,600 a shift. Brody dismissed this, pointing out that the club’s control over admission fees, hours of operation, and the dancers’ behavior negatively impacted the strippers’ ability to work.
Brody found that the dancers were an ‘integral’ part of The Penthouse’s business, labeled them as employees rather than independent contractors, and certified the FLSA collective action for the recovery of unpaid wages and liquidated damages.