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Are Strip Club Entertainers Employees?

By Kim Swidler

Last week the news was filled with eye catching headlines declaring that "New York strippers now have labor rights".

The articles concerned a Southern District decision on cross-motions for summary judgment regarding a class action that had been commenced by several exotic dancers, also known as entertainers, who had performed at Rick's Cabaret International Inc. (Rick's), a strip club located in Manhattan (Matter of Sabrina Hart et al v. Rick's Cabaret International Inc., No. 09cv3043, U.S. District Court for the Southern District of New York 2013).

The dancers asserted that they were employees of Rick's, and alleged violations of the Fair Labor Standards Act (FLSA) as well as the New York Labor Law (NYLL) and regulations promulgated thereunder by the New York State Department of Labor. The requested damages included minimum wage payments.

Rick's countered, in part, that the plaintiffs had at all times worked as independent contractors and, therefore, fell outside the coverage of FLSA and NYLL. However, based upon the evidence presented, Judge Paul A. Engelmayer disagreed and found that the dancers had, in fact, been employees of that entity.

As in other New York labor related matters, a major factor in making this determination concerning the issue of employer-employee relationship was the degree of direction and control that Rick's exercised over the plaintiffs.
As an example, in those controversies where there is a request for worker's compensation benefits, the court has held that the relevant factors in finding an employer-employee relationship include the right to control the work, set the schedule, the method of payment, the furnishing of equipment, the right to discharge and the relative nature of the work (Matter of Bugaj v Great Am. Transp. Inc., 20 AD3d 612 [ 2005]). No single factor is deemed dispositive, and the decision may be based on any one or a combination of the relevant factors (Matter of Gregg v Randazzo, 216 AD2d 747 [1995]).

In this case, Judge Engelmayer found that Rick's club-imposed written guidelines carried numerous restrictions that helped demonstrate that an employer-employee relationship had existed. The entertainers were forbidden to chew gum, have a bad attitude, use cell phones while on the [dance floor] or use public restrooms. The Judge also noted that the guidelines addressed the hours at which dancers could be scheduled to work, restrictions concerning tattoos, procedures for checking in and checking out, the range of fees that dancers were required to pay, appearance and dress, and the method and manner in which dancers could dance.

A spokesperson for Rick's has stated that it will appeal this finding and that the subject guidelines are no longer in effect.

The court's decision may also create other consequences for the owners of establishments such as Rick's. The workers' compensation laws require employers to obtain proper workers' compensation coverage for those who are designated as their employees. Failure to do so might result in various negative ramifications, including a fine of $2,000 for every 10 days of noncompliance. The business may also be shut down pursuant to a Stop Work Order until proof of proper coverage has been obtained. Furthermore, an injured employee might expose the uninsured entity to liability for medical and compensation awards.

So should all exotic dancers now be considered employees within the definition of the NYLL? That decision will still be made on a case by case basis. The burden of proof is on the claimant to prove an employer-employee relationship, and not all exotic dancers have been as successful. In Matter of Gallagher's 2000, 2013 NY Wrk 0511882, the claimant, also an exotic dancer, sustained an injury when she was kicked in the face by another dancer during a performance. Using the above noted factors, the New York State Workers' Compensation Board (the Board) held that the dancer was not an employee and disallowed the claim. The Board considered, among other factors, the fact the claimant received no remuneration and that she retained the discretion to decide which days she would work.

The opinion, views, and statements set forth in this post do not represent the views of the NYS Workers' Compensation Board.

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This page contains a single entry from the blog posted on September 16, 2013 8:58 PM.

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