A New York federal judge awarded nearly $11 million last month to a class of “exotic dancers” who “worked” at Rick’s Cabaret. They alleged that club operator Peregrine Enterprises Inc. incorrectly classified them as independent contractors and failed to pay minimum wages. U.S. District Judge Paul A. Engelmayer found in favor of the dancers on several issues denying a motion to decertify the class. The judge awarded $10.9 million in damages against Peregrine for violations of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The court had previously ruled, in September 2013, that the New York exotic dancers in the case were Peregrine’s employees as opposed to independent contractors. He found in November 2013 that the club operator violated the New York law in his ruling. Judge Englemayer said in his ruling:
Given the court’s prior determination that the dancers were employees entitled to be paid a minimum wage, and given that plaintiffs have restricted their request for summary judgment to days in which the club’s records unambiguously and reliably show that a dancer worked defined hours, there is no legal or factual basis for opposing this motion for partial summary judgment [on damages].
The judge also determined that “performance fees” paid to the dancers by customers don’t qualify as an “offset” that would have freed the club operator of its obligation under state law to pay minimum wage. Judge Engelmayer had previously reached a similar conclusion with respect to the FLSA.
The lawsuit was filed in March 2009. In December of that year, the court certified the case as an FLSA collective action. In December 2010, the court certified a state law class comprised of entertainers who worked in New York. While the court’s latest ruling resolved several of the remaining issues in the case. Judge Engelmayer left a handful of questions open for a trial, including whether Peregrine parent companies Cabaret International Inc. and RCI Entertainment (New York) Inc. are joint employers with Peregrine and therefore also liable for the damages. The trial would also consider whether the dancers are entitled to additional damages on some of their FLSA and NYLL claims, and whether the employer’s violations were willful. Judge Engelmayer is expected to set an early trial date.
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