By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
The path to earnings is simple: the dancer first performs two sets on the main stage, then dances brief stints on smaller, lower stages around the club.
Men, attracted by their moves, approach and tip. But the real money is made from brief table dances, where the dancers gyrate, pose, and pout. The minimum gratuity for such personal service is $20.
To keep the cash flowing, Cabaret Royale distributes "Cabaret Bucks" that customers buy with credit cards. At the end of the night, the girls exchange the play money for cash. Cabaret Royale charges the dancers a $35 "administrative fee" for the privelege of performing there each night. Then the company converts the Cabaret Bucks into cash, skimming off a small percentage before paying the young women the next day.
It's an ingenious scheme. But the play money and absence of a minimum wage quickly attracted the attention of the U.S. Department of Labor.
In July 1989, seven months after Cabaret Royale had opened for business in Dallas, the Labor Department conducted a routine audit of the club to see if it complied with wage and hour laws.
A year and a half later, the agency filed a complaint in federal district court, alleging that the topless dancers--deemed independent contractors by Cabaret Royale--are, in reality, employees who should be getting at least minimum wage from the gentleman's club.
The suit, still pending in Judge Joe Fish's court, alleges that Cabaret Royale owes $11 million in back pay to dancers and some waitresses. The Labor Department also contends that the club doesn't keep accurate records on how much its employees actually earn.
Tim Millard, Cabaret Royale's director, maintains that the arrangement benefits the dancers more than the club. The lawsuit, he says, is malicious.
"The DOL is targeting an industry it doesn't like," he says. "It's ridiculous for the Department of Labor to be concerned about someone who can earn hundreds or thousands of dollars in a club making $4.25 an hour."
The $11 million figure for back wages, he adds, is grossly incorrect.
Judge Fish, however, ruled in 1992 that the Labor Department was right to consider Cabaret Royale's dancers employees. The court will now determine whether Cabaret Royale's waitresses have been paid minimum wage.
Labor Department officials say the lawsuit could have a profound effect on the entire topless industry. Most topless clubs deem their dancers independent contractors; forcing the nightclubs to pay minimum wage would pose an enormous financial strain.
Millard insists today that Cabaret Royale won't suffer if required to pay minimum wage--even though the club's accountant, Jeffrey Bugenhagen, had testified in court that the move means the topless club would "stop operating at marginal profitability and immediately start operating at a loss."
Cabaret Royale and the Labor Department are negotiating a settlement on the back pay, Millard says.
At the same time, the club is trying to shake off a series of pesky--and potentially costly--individual lawsuits, such as the one filed by Ann Marie "Ami" Lindsey, a former Cabaret Royale head waitress who sued for discrimination after club managers turned down her request to dance, saying the 40-year-old woman was too old.
Another 40-plus former head waitress, Linda York, joined the suit when Cabaret Royale fired her. The women are seeking a total of $2.5 million in damages; an appeals court overturned a lower court's order to dismiss the case.
The lawsuit has dragged on for years and stalled indefinitely when Izzedin filed for bankruptcy on behalf of two of the corporations that used to run Cabaret Royale, a move Lindsey says shows the latitude powerful organizations have over their employees.
"Here they are expanding to Mexico and around the world," she says. "And I'm back in Dallas, still waiting six years later for my day in court. This is not justice."
Lindsey and York aren't the only women who've sued the topless club. Two cabaret-style dancers, Chris and Candy Smith, sued for breach of contract after Joe Najjar, the club's vice-president for operations, allegedly reneged on an agreement to allow the women to dance with covered breasts.
Days before the sisters were to perform for a live audience, they allege, Najjar told them the revue was canceled. They could dance topless instead--or wait tables and answer phones. The women sued for $9,000.
Najjar, who now oversees the Mexico City club, did not return phone calls from the Observer.
In 1992, another exotic dancer, Victoria Cher Harris, sued Cabaret Royale, a production company, and a local rancher after falling off a horse during filming of a Cabaret Royale video. The flick showed the women riding horses in slow motion--hair flowing in the wind, skin dewy and pink.
The venture ended in disaster, however, soon after Harris mounted her horse. The creature immediately headed for a low-hanging branch--and popped the dancer off her saddle. Harris suffered a severe concussion, bruises, and cuts and later sued for $25,000 to recover medical expenses.
Cabaret Royale officials dismiss all of the lawsuits as frivolous and have employed a host of lawyers to contest them. "They're nonsense lawsuits," Millard says. "It's a case of suing anyone you can. It's not hard to get the address of the courthouse."