A woman who previously worked as an exotic dancer at an Athens club recently launched a class action lawsuit accusing her former employer of violating the Fair Labor Standards Act. According to the former employee, the club improperly withheld wages, overtime pay, and tips by improperly classifying her as an independent contractor when she was really an employee, the Athens Banner-Herald reported on its website, OnlineAthens.com. The Athens case is the latest in a string of lawsuits in which exotic dancers have challenged the legality of the way their clubs pay them.
In the recent case, Christie Burrell danced for three years at Toppers International Showbar, a well-known club in downtown Athens. During her entire employment, the club classified Burrell and all its other dancers as independent contractors, not employees. By doing so, the club avoided some of the requirements the FLSA imposes on employers regarding the payment of employees, specifically compliance with minimum wage and overtime rules. Burrell’s action claimed that, even though the club permitted, and sometimes demanded, dancers to work 40 hours or more per week, the dancers never received wages or overtime. Instead, the only compensation the dancers at the club received was their tips. To make matters worse, the club allegedly didn’t even pay the dancers all of the tips they earned, since the club engaged in “siphoning away” part of that money “to distribute to non-tip eligible employees.”
Other clubs in Georgia have faced similar suits brought by dancers in the recent past and have unsuccessfully sought to defend their classification of the dancers as independent contractors. On the last day of 2013, a federal judge in Atlanta sided with dancer Martisha Stevenson in a similar lawsuit against Pinups, a Decatur club where she danced. Like Burrell’s case, Stevenson’s class action accused the club of illegally classifying its dancers as independent contractors instead of employees.
The court in the Stevenson case ruled that the dancers were clearly employees. Determining whether a worker is an independent contractor or an employee involves looking at many factors. The criteria a court can analyze include the degree of control an employer exerts, the worker’s “opportunity for profit or loss,” the amount of investment in equipment or additional personnel required by each side, the degree of skill required, the duration of the work and “the extent to which the service is integral to the alleged employer’s business.”
At Pinups, the dancers had a set of “General Policies and Procedures.” The club’s policies included rules about dancers’ hair, their makeup, their nails, the construction of their costumes, and how they should dance, along with prohibitions like no eating, drinking, or chewing gum on stage. The dancers had little control over how they completed their work. The dancers only chose which outfits to wear and which dance techniques or routines to perform. Being in charge of only such minor decisions was “more consistent with the status of an employee than an independent contractor,” the court wrote.
The dancer’s opportunity for profit or loss was tiny compared to that of the club. Without the club marketing the business, the dancers “would likely earn nothing,” as the judge stated. Also, the club bore almost all of the cost of additional investment in equipment and personnel. The club wholly provided the facility, the stage, the security, the bartenders, the cashiers, and the DJs.
The skill factor weighed against a classification of Pinups dancers as independent contractors. Although dancers might become more skillful with experience, Pinups had no evidence that any particular degree of skill was required to obtain a job dancing at the club.
If Toppers exerted a similar degree of control over its business as Pinups did, including detailed demands regarding how its dancers go about their jobs, strict limitations on what decisions the dancers do (or do not) have authority to make independently, the equipment or personnel they must supply, and to what extent they must market themselves on their own, it is distinctly possible that, following the decision reached in Stevenson and other previous cases, the court could reach a similar conclusion in Burrell’s case.
The law of classifying employees versus independent contractors has, in recent years, reached businesses that in the past may not have given close consideration to such determinations. The successes of employees in court should serve as a warning that, regardless of how you’ve done business in the past, it may be worth reassessing to determine if your independent contractor workers really do fit within that category. For knowledgeable advice and counsel about this and other FLSA issues, talk to the capable Georgia employment misclassification attorneys at Mays & Kerr. They have extensive experience in assisting both workers and businesses in dealing with independent-contractor-versus-employee classification issues.
To speak with one of our lawyers about your case, call 1-877-986-5529.
More blog posts:
Georgia Supreme Court Says Home Care Workers Covered by State’s Minimum Wage Law, Atlanta Employment Attorneys Blog, Dec. 4, 2015
Differentiating Between Interns and Employees Under the Fair Labor Standards Act in Georgia, Atlanta Employment Attorneys Blog, Sept. 30, 2015