Strippers Have Rights. But Do They Want Them?

In courthouses across the country, lawyers are fighting for strippers' rights -- and winning. But dancers are worried the lawsuits will cut into their cash flow.

The numbers of dancers involved, and the sums they're awarded, keep rising. In 2006, San Francisco's Gold Club was forced to pay a $2.5 million settlement to former dancers. More recently, an enormous class-action suit against the chain Spearmint Rhino won dancers a $10 million settlement. The club also may agree to reclassify its dancers as employees, although the settlement is still being negotiated.

The debate over misclassifying employees is hardly unique to stripping. It cuts across many industries and, according to the Department of Labor, may be costing the government billions of dollars annually in lost tax revenue. The construction business has been especially plagued by it; entire crews working for months on the same project are often classified as independent contractors. Delivery drivers and truckers also face widespread abuse: FedEx has fought in court in 16 states over its practice of classifying drivers as independent contractors.

Labor Department officials recently announced that, in cooperation with the Department of Treasury, they would be cracking down on the practice, which officials say denies workers access to "critical benefits" and generates "substantial losses" to the Department of Treasury, Social Security, Medicare and the national unemployment insurance trust fund. And it's a problem that's lingered for decades: When the feds studied the issue in 1984, they found that some 15 percent of employers were misclassifying around 3.4 million employees, a loss of $1.6 billion, or $3.4 billion in 2010 dollars. They estimate that anywhere from 10 to 30 percent of employers nationwide misclassify their employees.

Given that strip clubs and other adult business make for such a lucrative industry — the businesses take home around $1 billion in annual profit in Texas alone, according to a 2009 University of Texas study — one might think the cash-strapped government would target misclassified strippers. But the Labor Department is simply spread too thin, says department spokesman Juan Rodriguez. As many as 30 percent of employers may misclassify their workers, he says, so they've had to focus their efforts on "high-risk" fields: construction, janitorial work, home healthcare, childcare and agriculture, among others.

"If any employee in the entertainment industry believes they're not being paid in compliance with the FLSA, they have every right to call and file a complaint," Rodriguez says. "So if there is a perception out there that Wage and Hour [the Labor Department Division that oversees these complaints] has stopped overseeing this industry, that's not true. All they have to do is call Wage and Hour and file a complaint. But we have a certain number of investigators, and we have to focus those resources."


Jaguars, the big, blue-tinted palace where Holly performs, used to be part of a much larger chain, Jaguars Gold, whose corporate offices are in Dallas. Although the group sold the Dallas location five years ago, the company still owns a slew of clubs in other cities: Abilene, El Paso, Odessa, Lubbock, Longview, Beaumont, Edinburg, Harlingen and Phoenix.

Bryan Scott "Niko" Foster owns and operates the chain, as well as downtown ultra-lounge Plush. On the company website, he bills his strip clubs as "the only real Las Vegas-style gentleman's clubs in Texas," and promises "the world's most beautiful women look forward to entertaining you."

Lately, though, a few of Foster's employees have instead been looking forward to a fight. The chain is at the center of the latest lawsuit against strip clubs, filed in mid-October against Foster and JGC Dallas LLC. It alleges that four Abilene-based strippers — Erica Jones, Crystal Winter, Selisha Brooks and Ashley Cowart — all worked in excess of 40 hours a week but, because they were considered contractors, weren't paid minimum wage or overtime. Instead, the women claim, the only money they earned was from tips, which they were required to share with the house and other employees. They're asking for overtime, unpaid wages, the misappropriated tips and attorney's fees.

Foster, the CEO of Jaguars, has a two-word descriptor for the lawyers who press stripper lawsuits: "Ambulance chasers."

The lawyers are "convincing these poor dancers this is the wave of the future," Foster says. "The girls have to drive back and forth for depositions, have to make promises here and show up for court there, and in the end, they get a check for 500 bucks." He insists that most dancers ultimately wouldn't even want to be considered employees.

"Once they hear what it's like for an employee, that they get scheduled, that they have to give up their tips to the house, because that's the house's money ... the amount of money it costs the dancer is definitely terrifying the dancers," Foster says. "Once the rubber hits the road, they're running to the hills."

But the attorneys, he says, "do not tell these girls that. They're all being trapped and lured into these promises of thousands and thousands of dollars. The lawyers make hundreds of thousands of dollars, and the dancers make peanuts."

Individual payouts vary widely, but a few recent cases show substantially larger awards to dancers. Greenberg, the D.C.-area lawyer, recently settled a suit against the Mile High Club in Maryland in which one dancer was awarded $18,000, a second got $16,500 and two more were awarded $11,000 each. In the Spearmint Rhino case, one plaintiff, identified as "D. Trauth," was awarded "up to $15,000," while the other class representatives got $6,250 apiece. In a case involving Scores East and Scores West, two now-closed New York clubs, four plaintiffs won $7,000, and two more got $1,000 each. In the majority of these cases, the original complaints ask for the defendants to pay the plaintiff's lawyer's fees, something that's virtually always approved. The Abilene strippers are asking for a jury trial, but their attorney, Galvin Kennedy, says that, like most of these lawsuits, the case will more likely settle. He also says it's incumbent on private firms to take up what the feds won't. It's an ambulance that needs chasing, in other words, even if many dancers worry about the repercussions.

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42 comments
colorado disability lawyer
colorado disability lawyer

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colorado disability lawyer

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Tim Lebsack
Tim Lebsack

This problem is caused by the third party wanting to interfere in the private business between the club owners and the dancers.

Jessica
Jessica

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Crystal Evans
Crystal Evans

If they become employees, they would have to pay taxes on the salary that they are paid by the strip club owners. I wonder how many of them are paying taxes as independent contractors?

Xeginy
Xeginy

" "A lot of the girls I talk to at work don't care because we're the top earners," she says. "This could potentially hurt our group. It's only good for the low earners." "

Wow, really? So because you're part of the financially elite, you don't want anything to change, even though that change could benefit those who are poor? That's why there are such terrible problems with poverty in the US, because those who have money don't care.

Mysti Dancer
Mysti Dancer

no, i do not want strippers to get official employee rights, it would cause our income to be tracked and then what !! the current system has its flaws of course, but those flaws allow us to have the freedom we have as dancers. If i want i can go to blue cross and blue shield and get the best health insurance in the world, on my own without government intervention.

Larry in Laredo
Larry in Laredo

ahhhhhh, a stripper with a brain.........hmmmm, like a meth addict with a conscience? jus' sayin'.

Guest
Guest

"...that they have to give up their tips to the house, because that's the house's money"

And the next lawsuit that he loses will be for stealing tips in violation of federal labor law.

Sa
Sa

Interesting article. How in the world are the clubs getting away with classifying the waitresses, let alone the dancers, as independent contractors? I thought labor laws were pretty clear in respect to waiters & waitresses.

I suspect that the majority of dancers aren't aware to the tax writeoffs available to them. I would guess, though, that many of them have their own systems for maximizing their tips.

Joe
Joe

Most aren't dancing because their other career option was being a brain surgeon.

Easy mark for the lawyers....

Dan
Dan

I've worked as an independent contractor. There were no expectations of schedule or hours on site, merely that the project would be completed on-time. I did spend time on site, and usually during normal business hours, but that is when others are most available to meet with. I chose when to be on site.

The article quotes one of the owners or lawyers, something to the effect that the dancers are free to become employees and be paid $9.00 per hour with minimal benefits if they choose to. Guess what? Nobody's going to choose that option, are they?

Let's see. $500 per night times 5 nights per week = $2500 per week x 52 weeks = $130,000 in revenues. Some expenses come out of that, but one would think that the dancers could easily fork over $7K to $10K per year for health insurance out of that! And they can buy their own worker's comp insurance, too. Seems like a good deal for the average dancer who takes their job seriously, and isn't just dancing in order to snort and shoot up.

mynameisURL
mynameisURL

Soooooo....

If you combine a "Yellow" and a "Green", does it produce a "Blue"?

RyanJ99
RyanJ99

@Tim Lebsack The problem is caused by club owners and managers who have skirted the law by encouraging and coercing drug use, prostitution, and money above all else.  They are reaping what they sow... most of these girls are not even 25 years old, come from broken homes, and have zero to slim protection from these wannabe pimps and thugs.  If the club owners were acting responsibly this would not be an issue.  Not to mention their actions violate employment law; independent contractors should be free to come and go when they please, whereas dancers are required to work 7-8 hour shifts and must get permission to leave and are scheduled to work certain days by management.  No more whoring out our precious asset, young females, for liquor sales and room charges, change the law now!  If these managers had to pay an hourly wage, they would be selective in who they hired instead of trying to make house fees off every girl that fills out an application, drug user, escort, or not.

RyanJ99
RyanJ99

@Xeginy This is an absurd comment, if the girls understood they would be getting free house fees, not required to tipout, and getting paid an hourly wage PLUS whatever they make in tips, they would be all for it.  Get educated about the issue.

Tsepmet1
Tsepmet1

No, it's because of you don't make money taking your clothes off for money, you shouldn't hurt the ones who do well.

Guest
Guest

why should they be punished for working hard? the system for them is the same. you hustle hard and you make money, you dont? you make less. there are always those who want to take the easy road and get paid the same. i see it everyday

RyanJ99
RyanJ99

@Mysti Dancer if you really believe this honey, you need to sit down and think about this because you don't know what you are saying.

Sa
Sa

Uh huh. I hope that you're reporting all income earned to the IRS, and that your reported income matches what passes through your bank accounts. And your lifestyle should match your reported income. And you do file a tax return every year, right? The penalties for tax evasion - not reporting income - and not filing returns can be substantial.

Tsepmet1
Tsepmet1

That just means that you don't have enough money for the smart ones toSit with you. ;)

RyanJ99
RyanJ99

@Sa The get away with more then you could ever imagine.

However waitresses are not classified as independents.  They receive a $2.17 to $5 an hour plus tips, on average.

RyanJ99
RyanJ99

@Joe You must be a brain surgeon yourself.  If they werent violating the law in numerous ways, the lawyers wouldnt have a leg to stand on in a court of law.  Club owners are guilty of a myriad of illegal activities, obviously you wouldnt know about that seeing how you work in a hospital performing surgeries on brains (maybe an operation on yourself is in order)

Aguilera
Aguilera

That is why there are more and more people would consider it as a healthy sport item like Yoga.

RyanJ99
RyanJ99

@Dan  You start by saying you have worked as an independent contractor, but lack credibility by continuing to spew total unfounded nonsense.  How do you know they make $500 a night, are you a former dancer? Or are you simply a mark who likes to hand out 500 to every stripper you meet? Your post reeks of someone who knows nothing of the business except maybe a patrons viewpoint and a slow one at that. Ive been a manager in the industry for years and I know firsthand that most girls make between $200 and $300 a night without calculating expenses. The majority dont make $500+ a night. Of course the escorts make that much and girls offering extras may make more, but the every day stripper that only wants to dance does not and they work mandatory 8 hour shifts, which means they are scheduled to work, which means they should be paid a wage, if you know anything about the business youd know that. Independent contractors are given free will to work when they want. Some girls walk away with $50-100 a night after spending $50 on house fees, tipping out mandatory $20, and making between 100-200. The cabaret owners and managers have made a mockery out of the business for years its time the golden days where girls are mistreated and owners make a bundle while incompetent managers hire drug users and prostitutes at no cost to them because each girl is a revenue stream need to end.  Regulation and reclassification of these employees is a necessity to clean up these clubs and give these guys time to rethink their strategies and theyre business models.  Keep quiet when you know nothing of what you speak, you sound like a bitter mark.

Priscilla
Priscilla

You are making a couple of mistakes in your calculations. One, you are assuming that every stripper works 5 nights a week, and that she makes that $500 every night. This is very foolish of you.

It is only the top earners at a top club who will make that kind of money consistently, and everyone has a slow night. And more than half the women stripping are doing it because they can make enough working 2-3 nights a week to live on a shoestring while they go to college or raise their kids.

RyanJ99
RyanJ99

@Sa Really? Thanks for the accounting advice, but if anyone takes financial advise on an internet comment page, they should be tar and feathered.  Stick to what you know, avoid preaching, and stop trolling.  

Queencaramel2000
Queencaramel2000

Someone is a bitter hater Laredo. You have some serious issues towards strippers. Broke? Ugly? Both? Or do you just hate pretty girls because you can't have them?

Sa
Sa

I thought this was explained in the article. I believe makeup, hair products, and costumes were given as examples. You'd be surprised how expensive makeup and hair products can be.

RyanJohnSmith
RyanJohnSmith

The old stand-by retort, ( and only ), from a whore trying to make what she does sound glamorous and respectful.

 
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