Strip club owners have long played by different rules when it comes to compensating dancers, but as wage-and-hour suits alleging dancers are misclassified gain traction in the courts, some owners are revisiting how they compensate their talent, attorneys said.  On April 29, the District of Columbia ruled that a local club had misclassified five exotic dancers as independent contractors in violation of the Fair Labor Standards Act. Other courts — including the Fifth Circuit, federal courts in South Dakota, Florida and Texas, the Montana Supreme Court, and a Massachusetts state court — have issued similar rulings since the early 1990s.

Dancers have also won concessions through settlements, such as a deal preliminarily approved in the Central District of California in early April that would have the Norco, Calif.-based Spearmint Rhino chain pay $10 million to a class of more than 11,000 women and stop its practice of classifying dancers as independent contractors.  The pro-dancer rulings, combined with a series of well-publicized FLSA suits, have created an altogether new kind of exposure for the adult entertainment industry, and are prompting some club owners to reconsider whether to reclassify their performers as employees.

“As it is right now, they’re an anomaly in the economy, and that’s just because the club owners have been able to get away with it — up until now,” said Outten & Golden LLP's Justin Swartz, who is representing plaintiffs in a suit against New York's Penthouse Executive Club.   In the last few years, clubs in New York, Louisiana, Arkansas, California and Nevada — including Las Vegas' Sapphire Gentleman's Club, billed as the world's largest — have all faced lawsuits claiming they misclassified dancers, effectively denying dancers minimum wages, unemployment and worker's compensation insurance, and other protections accorded to employees. (click on link to read full story)