PRESS RELEASE: October 28, 2013, Royal Oak, Michigan -- A class action lawsuit has been filed in Federal Court in Detroit by three current and former exotic dancers against several Detroit adult night clubs, including The Coliseum, Flight Club and Penthouse Club.
The suit names club owner Alan Markovitz for intentionally misclassifying exotic dancers and other night club employees as independent contractors instead of employees under the Fair Labor Standards Act (FLSA) and Michigan Minimum Wage Law, refusing to pay statutory minimum wages, unlawfully demanding a portion of gratuities and unlawfully deducting employee wages through rents, fines and penalties.
Lead counsel for the plaintiffs, Megan Bonanni of Pitt McGehee Palmer Rivers & Golden (www.pittlawpc.com), says her clients are seeking an unspecified amount for damages, back pay, restitution, injunctive and declaratory relief and attorneys fees.
"The dancers are bringing this action on behalf of themselves and the other members of the proposed class of night club employees who were intentionally misclassified as independent contractors despite the fact that they were treated as employees. This is an illegal pay scheme designed to increase the nightclub's profit margins at the expense of basic employee rights." said Bonanni.
This class of plaintiffs includes the dancers and nightclub employees such as waitresses, shot girls and others who worked in the Markovitz-owned establishments and were misclassified by the Defendants as independent contractors. In addition to failing to pay employees wages, the night clubs illegally collected a portion of dancers' tips through rents and fines, forcing them to pay "tip-outs" to bouncers, disc jockeys and other club employees.
Co-counsel Kevin Stoops reports that numerous, other adult night clubs throughout the country have illegally classified exotic dancers as independent contractors to avoid paying actual wages, Social Security, Medicare and unemployment insurance. A recent Federal court ruling in New York ordered adult night club Rick's Cabaret to pay back wages to 1,900 exotic dancers who had worked there during the last three years. Similar lawsuits filed by dancers are pending throughout the country.
Markovitz, who published an autobiography entitled "Topless Prophet," has been involved in the Detroit adult entertainment industry for decades.
In the book, Markovitz writes about his introducing a "new model" in the industry which would have the "…dancers paying the club for the privilege of making an income on the premises, not as hourly wage earners, but as independent contractors." Bonanni says that as evidenced by the number of lawsuits across the country, misclassification of this type became a standard procedure at many of the largest and most successful adult night clubs in the country as a mechanism for the clubs to increase their profit margins.
"Though strip clubs are some of the most common offenders, they are hardly the only industry that exploits the 'independent contractor' classification," said Stoops. He says the U.S. Department of Labor estimates about one-third of all businesses misclassify their employees in this manner.