The class action Federal Labor Standards Act suit filed in U.S. District Court in Dayton also says Wagoner only made money from tips, was required to divide those tips with staff members and had to pay a “house fee” per shift to the club in order to work.
“These women, for the most part, are employees of the establishment and entitled to minimum wage and overtime,” said Cleveland attorney Anthony Lazzaro, who filed the suit on behalf of the Houston-based Kennedy Hodges firm. “They’re all doing it the same way and (the gentlemen’s clubs) are all doing it wrong.”
Dozens of such lawsuits have been filed in federal courts around the country. Many settle out of court, while a federal judge in New York last fall ruled that 1,900 dancers at Rick’s Cabaret in Manhattan were hourly employees and entitled to minimum wages, overtime and the return of “stage fees,” shared tips and other fines.
Classifying strippers as independent contractors allows clubs to not pay wages or employment taxes or provide benefits due to employees.
Greg Flaig, secretary of the Buckeye Association of Club Executives (BACE) who audits clubs each month, said New York New York Cabaret has done nothing wrong in the way they pay “entertainer tenants” who rent space on stage and must tip out DJs and other employers.
“From everything I see, the club has followed all tenant-lease procedures 100 percent,” Flaig said, adding that entertainers wouldn’t want the trade offs that come with being employees making up to $2,000 in a night. “If they were employees, they would not be able to make anywhere near the money that they make.”
Kennedy, who said he doesn’t make clients available to media, disputes Flaig’s claim.
“That’s the whole false dichotomy that the industry wants (to portray),” Kennedy said. “It’s not A or B. It’s not either do it under the way you’re currently doing it or this alternate way in which they say you’re going to make less money.
“There is a C option, and the C option can be legal where essentially the same relationship exists. It’s just that the club makes a little less money but they comply with the law.”
Dayton attorney Terry Lewis, who represents the club, did not return a message seeking comment.
A similar suit filed last year in Cleveland has at least one other dancer joining the original complaint. In that, it said dancers had to pay at least $15 to work a minimum 6-hour shift and routinely worked more than 40 hours per week. Fees had to be paid to bouncers and the “house mom” who oversaw the dancers. The dancers said fees had to be paid no matter whether dancers’ income could cover the fees each night.
In her suit, Wagoner claimed that Flaig sent her a text that said she had been put on a “lack of space list” and that she has been blacklisted from working in Ohio. Flaig admitted he sent such a text and characterized her as a 39-year-old looking for retirement income who danced on the edge of some of the club’s rules.
But Flaig, who audits many Ohio clubs each month and is executive director of the Owners Coalition, said he’s never had a successful legal challenge to his wage system which includes 26 questions regarding independent contractor employment.
“If I find they’ve done something wrong, I’m the first one that’s going to tell them,” Flaig said. “It’s going to affect all of the clubs if one of them doesn’t do what they’re supposed to do.”
Kennedy said he’s gotten money for every exotic dancer client he’s represented and isn’t surprised Wagoner was banned.
“It’s very common for employers in wage cases like this to try to intimidate the employees who file claims,” Kennedy said. “They’re good employees all along and then suddenly they become bad employees when they are exercising their rights under the law.”
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