Misclassification settlement strips $6 million from Club Assets

IMG_1090When I was an undergrad at Michigan, any time I would drive to the airport or to Tiger Stadium, I’d see billboards for Deja Vu, a strip club with (apparently) lots of locations. I never visited (not into that sort of thing, thanks for asking), and I never thought much of it. I certainly did not expect to be writing about Deja Vu and independent contractor misclassification 25 years later. But here goes.

When patrons of these fine establishments partake in the traditional lap dance, it’s doubtful they’re thinking about whether these often-single-mom “entertainers” who are just trying to make a living have been properly classified under wage and hour law. More likely, they’re thinking about — never mind.

But that’s an important issue, as Deja Vu recently learned, when it was sued by a class of 28,177 dancers alleging they were misclassified as independent contractors, rather than paid as employees. The class alleged that the clubs intentionally misclassified them as contractors, failed to pay them minimum wage, unlawfully required them to split gratuities, and unlawfully deducted wages through rents, fines, and penalties.

After a fairness hearing in federal court in Detroit, the parties finalized a $6.55 million dollar settlement. In addition to cash compensation, the settlement includes an unusual provision allowing dancers to choose whether to be contractors or employees.

Dancers will receive between $443 and $6,007 each. Their lawyers will enjoy a payout of $1.2 million in fees, which could buy them a lot of — never mind.

© 2017 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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