Strippers Win $10 Million Dollar Lawsuit For Tips And Unpaid Wages

NEW YORK -- Dancers at a strip club are due more than $10 million in back wages and tips, a federal judge ruled Friday after the dancers sued to be paid at least a minimum wage.

And additional claims are headed for trial in the class action case, meaning there ultimately could be further awards to roughly 1,900 women who worked at Rick's Cabaret in Manhattan between 2005 and 2012.

"We are very happy with the court's ruling," said the dancers' Minneapolis-based lawyer, E. Michelle Drake.

The club's owner, Houston-based RCI Hospitality Holdings Inc., said it planned to appeal and continue "vigorously defending the allegations."

The dancers got no steady wages, instead paying a fee to the club to perform there and in return getting paid by customers. The customers put up $20 for each personal dance and fees starting at $100 for 15 minutes of entertainment in semi-private rooms.

But after paying club fees and required tips to deejays and other club workers, the dancers sometimes ended up in the red, Drake said.

"There is a real mythology of the wealthy stripper who has made piles of money," she said by phone Friday. "People see all the money that the customers give to the dancers. What they don't see is all the money going back from the entertainer to the club."

The club argued the dancers were independent contractors. Club lawyers also said any wages due to the strippers should be offset by the money they made from customers, called performance fees.

"The concept that the large sums of money earned by entertainers at Rick's Cabaret New York, for which they received IRS Form 1099s, do not offset the claimed wage obligations is a fundamentally flawed concept," RCI Hospitality Holdings said in a statement Friday.

U.S District Judge Paul Engelmayer disagreed, first ruling last year that the dancers were entitled to minimum wage. Then he found Friday that they were entitled to $10.8 million on certain claims.

"There is no charter under (state labor law) for an employer to treat a performance fee as either a 'wage' or as an offset to its statutory wage obligations," he wrote.

Local Florida labor attorney Lowell J. Kuvin, Esq. said "I have seen both sides of the argument of whether the dancers were either employees or independent contractors, there is not any simple answer. The Clubs need to be diligent in how they operate so as not to change the classification of the dancers to being employees."

Friday's ruling covered claims the judge felt could be decided based on court papers alone. The trial will address others. The dancers are seeking more than $18 million in all.