NEW YORK — Exotic dancers employed by Rick’s Cabaret in New York City, which is owned by RCI Entertainment Inc. and Peregrine Enterprises, Inc., have settled their wage claims with their employer for $15 million. The dancers claimed that their employer violated the Fair Labor Standards Act (FLSA), and New York Labor law. The settlement comes six years after the suit was initially filed in 2009. The attorneys have requested $5.5 million in fees, payments of $15,000 each to the named plaintiffs, and $2,000 to each of the 25 opt-in plaintiffs who provided depositions.
Wage Violations
In the suit, the plaintiffs alleged that Rick’s classified them as independent contractors and never paid them any wages. All payments that the dancers received were in the form of payments from customers, including a $20 charge for a personal dance. Apparently, Rick’s issued vouchers to customers called “Dance Dollars” for personal dances, which would cost a customer $24. At the end of a dancer’s shift, the dancer redeemed each vouchers for $18, with Rick’s keeping the remaining $6 that the customer paid for the voucher.
The dancers argued that, under New York Labor Laws, employers are prohibited from retaining any part of a gratuity or any charge purported to be a gratuity for an employee. Rick’s claimed that the performance fees paid to the dancers through the vouchers should be used to offset their minimum wage obligations.
The court noted that the fees were paid directly by customers to dancers in exchange for a personalized service and were largely paid in cash. The court also noted that the mere fact that the fees were paid by the Dance Dollar vouchers did not change their essential nature and should be considered as cash payments. The court found that even if Rick’s set the price for personal dances, mandatory charges may still be considered tips. A customer would have understood the personal dance fees to be gratuities and not service charges and, therefore, the dancers were entitled to the full amount of those gratuities.
Wage Class Action Suits
According to the 2015 Workplace Class Action Class Action Litigation Report, wage and hour class action suits similar to the one filed in the case above against Rick’s Cabaret remained the most dominant type of employment class action. FLSA and state law wage and hour class actions produced more decisions from federal and state courts than any other area of complex employment litigation. It represents the prime litigation in the workplace, and more filings are expected in 2015.
If you or someone you know is not being paid minimum wage as required by FLSA or state laws, you should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our top rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.