$15 Million Settles Strip Club Overtime Claim

$15 Million Settles Strip Club Overtime Claim

NEW YORK — Current and former exotic dancers will share in a potential $15 million settlement with their employer, Rick’s Cabaret. The New York City strip club and its dancers have reached an agreement in the wage and overtime pay class action lawsuit filed in New York federal court. The settlement still needs court approval, but is expected to settle all of the remaining issues and claims of all of the class members.

The Dancers’ Claim

The former dancers filed their claim against RCI Entertainment (New York), Inc. and Peregrine Enterprises, Inc., the operators of Rick’s Cabaret in 2009. The dancers claimed the club was violating tipping laws and had misclassified them as independent contractors. As with many of the recent exotic dancer overtime pay lawsuits, the club was accused of requiring the dancers to share their tips with a “house mom,” bouncers, and the DJ. The dancers also claimed the club classified them as independent contractors, yet treated them like employees when the club dictated appearance standards and many other aspects of how the dancers performed. By classifying the dancers as independent contractors, the club was not required to follow minimum wage and overtime laws when paying the dancers. Dancer misclassification appears to be an industry-wide practice, which often denies dancers the right to receive at least minimum wage for each of the hours they work.

The Settlement

Settlements are often reached because one or both sides want to avoid the cost of continuing litigation and the greater uncertainty of the outcome associated with a lawsuit going to trial. Both sides, of course, must reach a fair and reasonable agreement. In this case, the settlement came just three weeks before the parties were set to go to trial and four months after Peregrine received a $10.9 million judgement against it. The $10.9 million judgment resolved some of the issues in this lawsuit, but there were still a few issues the court felt needed further attention so the lawsuit was set for trial.

This settlement will likely include around 2,200 downtown Manhattan dancers who worked for the Cabaret at any time between September 2005 and September 2012. The individual dancers are expected to receive around $4,250 on average; however, some will receive at least $10,000 each. Because the class size is so large, the final settlement is unclear, but the final amount Rick’s Cabaret will have to pay could be as high as $15 million.

If you are or were an exotic dancer and you believe your employer has misclassified your position and is not paying you minimum wage or the one and a half times your regular rate when you work overtime, you may have a wage or overtime pay claim. Our top-rated team of overtime pay lawyers can be reached at (855) 754-2795. Or complete our Free Unpaid Overtime Case Review form and our experienced legal team will evaluate your claim. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.

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