Strip Clubs Nailed for $8.5 Million in Settlement of Independent Contractor Misclassification Claims

Independent contractor misclassification settlement $8.5 million spearmint rhinoI learned there’s a chain of strip clubs called the Spearmint Rhino. I didn’t know that was an option for rhinos. The rhinos I’ve seen at the zoo smell nothing like spearmint.

This club was paying its dancers as independent contractors. As we’ve seen in other “exotic dancer” cases, that can be an expensive decision.

This time it cost The Rhino $8.5 million. A class of 8,000 ladies reached a deal after claiming they should have been treated as employees under Caliufornia and federal wage and hour laws. The class members claimed they were denied overtime, denied a minimum wage, denied meal and rest breaks, and had their tips misappropriated.

In other words, they didn’t feel like they had much to dance about.

What happens now to The Rhino? Does it reclassify its dancers as employees? Who knows. Who cares.

I will, however, be asking the zoo if there’s anything they can do about the rhino smell. It seems there may be a minty version of the beast.


For more information on independent contractor issues and other labor and employment developments to watch in 2018, join me in Cincinnati on March 28 for the 2018 BakerHostetler Master Class on Labor Relations and Employment Law: A Time for Change. Attendance is complimentary, but advance registration is required. Please email me if you plan to attend,, and list my name in your RSVP so I can be sure to look for you.

© 2018 Todd Lebowitz, posted on, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

Python vs. Boa: Does the GrubHub Misclassification Ruling Really Matter? (Don’t Believe the Hype!)

Python vs boa - independentr contractor misclassification and grubhubPythons and boa constrictors usually do not fight each other. At least that’s what I learned in herpetology school. The reason they don’t fight each other is that there’s too much risk. The boa risks getting bitten by the python’s lethal fangs. The python risks being constricted to death because that’s how constrictors work.

For roughly the same reason, independent contractor vs. employee disputes rarely go to trial. There’s too much to lose. A company that relies on independent contractors for its business model cannot afford a ruling that all of its contractors are really employees. That’s why these cases almost always settle.

The GrubHub case, however, Continue reading

After the NLRB Ruling, Is Joint Employment Still a Concern?

What is joint employment - imageLast month in the Hy-Brand decision, the NLRB raised the bar for determining whether a business is a joint employer. So now what? Is joint employment still a concern for businesses?

To paraphrase Tina Fey paraphrasing Sarah Palin paraphrasing Margie in Fargo, Ya! You betcha!

While the recent NLRB decision dropped the alert to Def-Con 4 in labor relations, the joint employment landscape under wage and hour laws is getting worse for employers, not better, thanks to the Fourth Circuit Court of Appeals. Businesses should Continue reading

Bad News for Businesses: California May Rewrite Test for Independent Contractor vs. Employee

Shark california independent contractor misclassification

California businesses already have to cope with the threat of earthquakes, wildfires, Sharknados, and the craziest employment laws in all the land. The California Supreme Court may be about to make things even harder for businesses that use independent contractors.

For years, disputes over whether someone is an independent contractor or employee under California wage and hour law have been analyzed under the test used in S.G. Borello & Sons, which is a hybrid test combining elements of the Right to Control Test with elements of the Economic Realities Test. It is a multi-factor balancing test.

That may be about to change.

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Here’s a Tip a Cartoon Cat Would Love: Try This Edit to Your Independent Contractor Agreements

Independent contractor misclassification cat“Whenever he gets in a fix, he reaches into his bag of tricks!” Yes, boys and girls, I am talking about Felix the Cat, whose magical bag of tricks could be transformed to get him out of any treacherous situation. Don’t you wish you had one of those?

Well, I won’t share mine, but I can offer this tip, which may help you avoid a treacherous situation.

This weekend I was reading a California decision on independent contractor misclassification. (I do other, more fun things in my free time too, so don’t make fun. Ok, you should make fun a little.) While analyzing Right to Control factors, the court ruled that the worst fact for the business was that it could terminate the contractor at will. The ability to terminate a relationship at will, the court ruled, was the “ultimate” form of control! Really? I agree it’s a factor among many, but the “ultimate factor”? Come on.

Anyway, this problem is easily avoided with some creativity. Allow me to reach into my bag of tricks.

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Update: Uber’s Misclassification Cases, Arbitration, and the Supreme Court

Independent contractor vs employee Uber misclassification lawsuit arbitration agreements IMG_1111Remember the children’s game called Red Light, Green Light? One ambitious youngster is selected as the traffic cop, who randomly shouts “red light” or “green light,” requiring all the children to run and stop and start in short bursts that would cause an adult human to tear an ACL.

That’s essentially what’s happening in the big Uber misclassification case that has been pending in California since 2014. The case is called O’Connor v. Uber Technologies and is being overseen by traffic cop / federal judge Edward Chen in San Francisco. If anyone ever gets to the finish line, it will eventually be determined whether Uber drivers are properly classified as independent contractors, rather than employees.

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Drivers Rack Up Misclassification Settlements, While GrubHub Fights Back

In 1984, the Cars released a sad-sounding song called Drive. I assume it was about a guy longing for a girl, but it’s too depressing to listen to the whole thing. Throughout the song, Ric Ocasek asks “Who’s gonna drive you home tonight?” (Why the long face, Ric? Kidding.)

If you use a ride hailing service, chances are it’s an independent contractor driver who’s gonna drive you home. But in several high profile lawsuits, drivers have challenged their independent contractor status. While these suits have been in the news for years, there have been a recent flurry of high dollar settlements. Earlier this year, Lyft agreed to pay $27 million to a class of 95,000 drivers in California and Door Dash agreed to pay $5 million. Just last week, Postmates agreed to pay $8.75 million.

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