Wage and Hour Claim Resolved for $3.7M

A California wage and hour claim by exotic dancers against nightclub chain Spearmint Rhino has been resolved for $3.7 million.

The class action lawsuit was filed by plaintiff Adriana O. on behalf of herself and other exotic dancers who had worked in the nightclubs and claimed they had been misclassified as independent contractors rather than employees. According to the complaint, Spearmint Rhino had done this in order to pay them at a lower rate.

Third Time’s a Charm

The exotic dancers working at Spearmint Rhino clubs have sued over wage and hour issues before. The first case was over California’s minimum wage laws. The plaintiffs in that case reached a settlement with the defendant in November 2012 in which Spearmint Rhino agreed to stop classifying their dancers as independent contractors and instead to recognize them as shareholders in the operation.

The second complaint, filed a few years later, alleged that the dancers had been compensated in tips only – and those tips had been “misappropriated.” The dancers further claimed they had been denied rest and meal breaks.

As part of the current settlement, plaintiffs who had expressed dissatisfaction with the terms of that proposed settlement agreed to drop their prior objections.

The Current Wage and Hour Settlement

The plaintiffs agreed to the current wage and hour claim settlement in part because Spearmint Rhino had reclassified them as employees. While this addresses one of the causes of action, it has also changed the company’s financial position, raising doubts as to whether or not the defendant would be able to cover a larger settlement.

After legal fees in the amount of $912,500 and a total of $10,000 for the lead plaintiffs, the remaining Class Members will share approximately $2.6 million. Dancers who “provided nude, semi-nude, and/or bikini entertainment” starting on Oct. 30, 2017, are eligible for shares in the settlement.

California’s Wage and Hour Laws

The Golden State has some of the most stringent labor protections in the nation, which include worker classification. In order to be legally considered an “independent contractor,” a worker must be allowed to complete assigned tasks using their own preferred methods and on their own schedule. Furthermore, the employer may not deduct anything from their pay unless a prior arrangement to that effect has been agreed to; generally, independent contractors who work on a 1099 basis are responsible for their own taxes and insurance, and pay their own work-related expenses.

On the other hand, an employee – one who has filled out Form W9 – is subject to his or her employer’s schedule and procedures. However, the employer is obligated to provide any necessary equipment, pay for employee expenses, and provide defined, off-duty rest and meal breaks. Furthermore, hours worked beyond 8 per day or 40 per week must be paid at a rate that is 150 percent of the standard wage. Double time applies when the worker is on duty for 12 hours or more for a given shift.

These laws, if broken, can lead to lawsuits, as California also removed mandatory arbitration clauses in contracts.

The dancers’ current Wage and Hour Class Action Lawsuit is Case No. 5:17-cv-00206, in the U.S. District Court for the Central District of California.

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