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Wage lawsuit against gentlemen's club - Exotic dancers win lawsuit for misclassification

$11.3 million settlement for exotic dancers misclassified as independent contractors

Employers have to meet certain criteria in order to apply exemptions or independent contractor status to employees and being misclassified by your employer is all too common. Many times it is clear that an employee should not be labeled an independent contractor but as an employee.

Case in Point

$11.3 million settlement for exotic dancers not paid minimum wage; Dancers also misclassified as independent contractors

After three years of litigation, a group of exotic dancers were awarded an $11.3 million settlement in a minimum wage lawsuit against a Déjà Vu gentleman's club in Michigan. In the lawsuit, the dancers claimed that the club misclassified them as independent contractors and also did not pay them minimum wage - instead the dancers claimed they had to pay the club a nightly "rent," or a portion of the dance fees that customers paid.

Economic realities test applied

The district court in Michigan ruled that the dancers were misclassified using the "economic realities" test in the FLSA. Applying the economic reality test, the Court found that:

• the exotic dancers were in fact employees of the club
• the club exercised significant control over the dancers, because it dictated how long they were required to dance versus be on a break, and 
• the club required dancers to comply with various rules that were enforced with fines for violations.

According to recent IRS estimates, 80% of the workforce in the United States is being misclassified as "independent contractors".

If you believe you have been misclassified as an independent contractor, order a free copy of our wage and overtime guide before you do anything. Even if your employer tells you that an exemption applies to you it is always best to check your status with an employment lawyer. You can call our office 24/7 to start your free case review.

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