In a class-action lawsuit brought by about 1,900 exotic dancers, a federal judge in New York ruled Rick’s Cabaret, a strip club in Midtown Manhattan, should pay more than $10 million to the plaintiffs. The lawsuit was filed four years ago by the dancers to recover unpaid wages from 2005-2012. The decision follows a ruling from the same court last year that the dancers were considered hourly employees, not independent contractors as their employer argued. The case is ready for trial in which jury may award what the plaintiffs are seeking, $18.8 million in compensation.
According to the court papers, Rick’s Cabaret failed to pay its employees minimum wage and even collected some payments that should have been paid to the dancers. Instead of paying $20 cash for a personal dance, patrons could buy $24 vouchers called “Dancer’s Dollars” which they could redeem for personal dances. For each voucher purchased, the club retained a total of $6 including a $4 service fee. Therefore, when paid in vouchers, the dancers only received $18 per dance. The dancers argued that they should be entitled to the withheld $2 as a gratuity. Approximately, 1.8 million of such vouchers were redeemed between 2005 and 2012.
Rick’s Cabaret argued that the dancers earned more than minimum wage when the dancers’ performance fees were included. The court disagreed because under labor law, “such fees do not offset defendants’ minimum wage obligations.”
Rick’s Cabaret through its holding company RCI Hospitality Holdings said in a statement that it was “disappointed” and it would “appeal this ruling once a final judgment is rendered in this case after trial.”