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Exotic Dancers Win $12.9M in Spearmint Rhino Employee Misclassification Lawsuit Settlement

December 4, 2012

In a previous Santa Ana employment lawyers blog post, Vincent Howard discussed the issue of employment misclassification in the California workplace, and a lawsuit brought by a class of exotic dancers in California and other states--who claim that their employer, Spearmint Rhino, an adult night club, misclassified them as independent contractors while they worked as strippers at the club.

Last month, this group of exotic dancers won $12.9 million in the employee misclassification lawsuit settlement, that stemmed from their claim that the strip club chain wrongly classified them as independent contractors and violated provisions of the Fair Labor Standards Act (FLSA) by failing to pay them proper minimum wages and benefits. The lawsuit settlement was approved last month by U.S. District Judge Virginia Phillips, based in Riverside, California.

The lawsuit claimed that three clubs, Spearmint Rhino, Blue Zebra, and Rouge, had policies that violated federal and state laws by classifying the topless dancers as independent contractors-- a reportedly frequent occurrence in the exotic dancing industry. This, according to the lawsuit, resulted in employee misclassification, as the dancers were treated like employees--which robbed them of their right to minimum wages and benefits under state and federal law.

The dancers claimed in the lawsuit that as independent contractors, they were subjected to so many work rules and fines for violating club policies--that they should have been considered as employees. The clubs were also accused of disregarding wage and hour laws by engaging in unlawful tip-splitting, which required dancers to share their tips with managers, DJs and doormen and other employees that don't normally receive tips.

The fourteen dancers named in the lawsuit worked in clubs in California, Florida, Texas, Kentucky and Idaho, and alleged that they were threatened with retaliation if they chose to stand up for their right to be recognized as an employee.

The court banned the club from treating dancers as independent contractors in the future, and can no longer charge the dancers stage fees for the privilege of dancing at the clubs. The California plaintiffs will reportedly get 50 percent of the employee misclassification lawsuit settlement amount, minus $2.5 million in court costs and attorneys fees, which leaves 43 percent of the settlement to the Nevada dancers, and 7 percent to dancers in Texas, Idaho, Nevada, Kentucky and Florida.

According to Vincent Howard, employee misclassification is a frequent and growing problem in the Southern California workplace--in regard to violations of minimum wage and overtime payments, tax responsibilities, meal and rest breaks, and employee benefits, along with other state and federal employment laws and regulations, and can result in wage and hour lawsuits, and large penalties and fines for employers who don't properly classify their employees according to FLSA classification guidelines. If an independent contractor has experienced employee misclassification and chooses to file a wage and hour lawsuit, the worker may be entitled to receive overtime compensation, as well as interest, penalties, and the cost of legal fees. Contact Vincent Howard today, to discuss your employee misclassification issue.

Spearmint Rhino settles lawsuit by dancers for $12.9 million,Vegas Inc., October 10, 2012

Strippers Win $13 Million Settlement in Wage Dispute, NBC San Diego, November 12, 2012

Related Web Resources:

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)

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