Exotic dancers who worked at a Philadelphia strip club that substantially controlled the work environment and took cuts of tips and lap dance proceeds are employees and can bring a Fair Labor Standards Act collective action, a federal judge has ruled.
U.S. District Judge Anita Brody of the Eastern District of Pennsylvania ruled June 30 in Verma v. 3001 Castor that The Penthouse Club improperly classified its strippers as independent contractors instead of employees. The ruling is a win for a proposed class of strippers who claim they are entitled to minimum wage, overtime compensation and all the gratuities they earned.
Judge Brody granted lead plaintiff Priya Verma conditional class certification under the Fair Labor Standards Act, but denied her request for class certification of state law claims under the Pennsylvania Minimum Wage Act and the Pennsylvania Wage Payment and Collection Law. Judge Brody ruled the class-action requirement of predominance could not be proven at this early stage of the case given each potential class member could have varying damages. But she allowed for Ms. Verma to refile a motion for class certification after the evidentiary record has been developed.
Judge Brody’s analysis of whether the strippers were employees or independent contractors for purposes of the FLSA claims came down largely on the control the club exerted over the dancers’ work.
According to Judge Brody’s opinion, the dancers at The Penthouse don’t earn any wages, receiving all of their compensation from the club’s customers. And during certain shifts, some of the dancers are required to pay the club a stage rental fee to work the shift. The club sets the price and duration of all private dances and the dancers are not allowed to charge above that price, the judge said.
The dancers also have to give a portion of their tips to various club staff, including the deejay, “house mom,” “podium host,” and possibly the valet. The dancers face fines for being late or leaving early from a shift, using their cell phone, chewing gum, entering or exiting the stage from anywhere other than the stairs or failing to wear their hair down.
There is a salon on site and dancers are instructed on their physical appearance, Judge Brody said.
In order to avoid additional shift fees, dancers have to work at least four shifts a week to avoid being considered freelancers. While the dancers can leave the club at any time and work for another club, they are under “continuous review” by club management when working at The Penthouse, Judge Brody said.
The club argued that dancers set their own schedules and that if dancers “hustle,” they can make up to $1,600 a shift, according to the opinion.
“Here, the dancers’ control over their schedules is minimal compared to all of the elements of the work that defendant controlled,” Judge Brody said. “Based on the foregoing facts, the factor of control weighs overwhelmingly in favor of a finding that the dancers were employees, not independent contractors.”
Gary F. Lynch of Carlson Lynch in Pittsburgh is the lead plaintiffs attorney. John F. Innelli of Philadelphia is representing the defendants. Neither attorney returned a call seeking comment.
Gina Passarella can be contacted at 1-215-557-2494 or at email@example.com. Follow her on Twitter @GPassarellaTLI. To read more articles like this, visit www.thelegalintelligencer.com.