Where is the line between independent contractor and employee? That was the question presented in the case of Coleman vs Pink Poodle Enterprises, where 11 former exotic dancers at the Pink Poodle strip club sued their former employer for failing to pay them minimum wage and overtime or provide them with benefits. The club is located in San Jose, California and has been owned and operated by the Kuzinich family for the past 57 years.

The club got around these provisions in the California Labor Code by classifying the dancers as “independent contractors”, rather than “employees”, despite the fact that dancers had regular work schedules, specific dress codes, and were required to attend employee meetings the way a typical “employee” would.  As independent contractors, the dancers were ineligible for benefits such as Medicare and Social Security. This is the main legal argument that the Kuzinich family is using to counter the dancers’ claims: they are independent contractors, and therefore minimum wage and benefit laws do not apply. This is certainly a stretch, since “independent contractors” are not bound by employer guidelines the way that these dancers were.

Not only were the dancers deprived benefits, but some of them were not even paid for their labor at all. Instead, they were required to pay the club for the opportunity to dance there. This is referred to by many club owners as a “house fee” that the dancers must pay in order to get time on stage, similar to the way that a hairstylist can rent out a chair at a salon. However, hair stylists who do this are usually not bound to salon schedules or meeting times the way that these dancers were.

This is an issue that is being raised in clubs across the country, and it is not the first time that dancers are fighting back against their employers. Another lawsuit, filed in 2013 by Felicia Harmon and others against Foxy Lady, Inc. and Arthur Dillard, raised the same employment issues as the dancers at the Pink Poodle. In addition, dancers at the Foxy Lady were forced to pay a “bar fee” so that they could choose to work any shift and were required to pay a fine if they showed up to work late. Now I don’t know about you, but the idea of paying my employer to work seems outrageous. Regardless of one’s personal opinion towards exotic dancing as a profession, labor is labor.

There is an upside to being labeled as an independent contractor–tips. Since the dancers are not given an hourly wage, they are able to keep all (or the majority) of the tips that they make from their dances. According to an exotic dancer who goes by the name Menagerii, this can be between $500 and $1500 on an average night. In fact, many of the dancers didn’t even realize that they were being taken advantage of because they walked away with a decent amount of cash each night.  However, while $1500 may seem like a lot, when the fee to dance at the club and the cost of medical care are taken into account that number drops fast.

The majority of past cases have ruled in favor of the dancers, rewarding them with settlements of millions of dollars. In 2012, another club in California settled a similar lawsuit for $12.9 million and a third lawsuit settled in 2013 required the Penthouse Executive Club to pay $8 million to its dancers in wages and overtime. While we don’t know explicitly how much compensation the dancers from the Pink Poodle are seeking, past precedent shows that the dancers are likely to be victorious and receive a large settlement.

Featured image courtesy of [401(K) 2012 via Flickr]

Brittany Alzfan

Brittany Alzfan is a student at the George Washington University majoring in Criminal Justice. She was a member of Law Street’s founding Law School Rankings team during the summer of 2014. Contact Brittany at staff@LawStreetMedia.com.

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