Strip clubs are the brave new frontier in employment lawsuits. Women who were for years treated as "independent contractors" are filing suit in droves against their current or former employers. All of them want basically the same thing: the minimum wage and overtime money they feel they should have gotten while lap-dancing and pole-swinging for tips alone. Many also want compensation for years of unfair "house fees" and the tips they say they were forced to share with D.J.s, "house moms," valets, waitresses and sometimes even their bosses.
Esther Sue Eliazo is the latest dancer filing a Fair Labor Standards Act (FLSA) claim against her former employer, local topless joint Baby Dolls. In her suit, filed this morning in federal district court, the Tarrant County woman claims the saloon let her work over 40 hours a week without paying her minimum wage or overtime.
Her complaint also alleges that she wasn't fairly compensated for the house-issued "Baby Doll Bucks" (known in stripper parlance as "funny money") that the customers used to tip her. The lawsuit is set up as a class action; Eliazo is also part of a different class-action lawsuit against another locally-based strip club chain, Jaguars Gold Club.
We wrote earlier this year about the ongoing wave of FLSA stripper lawsuits. Galvin Kennedy, Eliazo's lawyer in the Baby Dolls suit, is also the attorney suing Jaguars in the other class action. Eliazo joined that one on December 16, 2011, court records show.
Class-action stripper suits tend to be successful, for one simple reason: most courts agree that dancers are employees, not independent contractors. Misclassification of employees is common in strip clubs for the same reasons it is in other industries: contractors are much cheaper to employ. Although the Department of Labor will respond to complaints about misclassification, they don't tend to focus much on strip clubs, focusing their scant resources on higher-risk fields like agriculture and construction.
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In reporting the cover story, though, we also found that FLSA lawsuits aren't very popular among dancers who are currently working, especially women who work at higher-end places. Although many of them resent the house fees and the unfair compensation they say they receive for the funny money they turn in, most of them were skeptical that being classified as an employee would be much better. Many expressed concerns that it would only cut into their profits.
However, that sentiment can change once women leave the industry, or when they injure themselves at work and find themselves unable to apply for worker's comp. Kennedy says Eliazo still works as a dancer, although not at Jaguars or Baby Dolls. Court records show that she tried unsuccessfully to file for bankruptcy in June of this year, the fourth time she's filed such a claim since 2004.
Kennedy tells us they're expecting a ruling in the Jaguars case "any day." He's not optimistic that the lawsuits will prompt an industry-wide shift, though. Strip club owners, he says, "continuously come up with ways to re-categorize or re-classify what they're doing, but the end result is the same: the ladies get their tips and they don't get any compensation from the establishments. I would love to see this have a ripple effect and everybody change their practice to correct it, but that's their decision. My goal is just to get my clients the damages they're owed."
We have a call in to Steve Craft, president of Burch Management, which owns Baby Dolls. Craft is also personally named in the new lawsuit. We'll update accordingly.