Atlanta's Magic City, Dancers Trade Lawsuits

ATLANTA, Ga.—The question of whether stage dancers at adult nightclubs are employees or independent contractors is an issue that's been litigated for more than two decades. Last year, AVN reported on the case of a Rick's Cabaret in New York in which the judge ruled that the dancers were indeed employees. Now, Atlanta's famed Magic City night club and some of its dancers are gearing up for another such fight. The case began back in May of this year, when four dancers—Keira Vaughan, Jacqueline Woodward, Sashe Omogiate and Makeda Roots—sued the club in federal district court, charging that they had been paid less than the current minimum wage as mandated by the Fair Labor Standards Act (FLSA), and that part of their earnings, which came in the form of tips, had been confiscated by the club and used to pay "fees, fines, and payments to other employees." The plaintiffs hope to gain class action status for the lawsuit, since they contend that the club's other dancers, whom they refer to as "the Collective," are treated similarly. "Defendant did not and has not made a good-faith effort to comply with the FLSA as it relates to the compensation of Plaintiffs and the Collective," the lawsuit charges, adding, "Defendant knew Plaintiffs and the Collective worked as employees in fact, and it willfully failed and refused to pay Plaintiffs and the Collective the required minimum wages." The complaint describes a variety of practices engaged in by the club which they say indicates that the dancers are employees in fact, including "Directing entertainers to sign non-compete agreements, prohibiting them from working at other clubs"; "Requiring entertainers to be on the floor for a set amount of time before they can be eligible to take breaks"; "Reviewing and approving entertainers’ apparel, hair, and makeup"; and "Deciding when entertainers are permitted to leave at the end of the shift." Earlier this month, however, Magic City filed a counterclaim against the dancers, claiming that they are not "employees" in the legal sense of the word, and that the plaintiffs' claims are sufficiently different than those of other dancers that class status should be denied. The counterclaim also charges that the plaintiffs are in breach of an agreement they signed with the club, and demands that the plaintiffs be responsible for any legal fees incurred by the club in fighting their lawsuit. The club's "Counterclaims, Amended Answer and Affirmative Defenses" contains 26 "defenses," which variously deny that the dancers are employees, and state that the dancers rent the stages on which they dance and that they have near-complete autonomy in how and when they dance—and that in any case, if there were violations of any laws, they were inadvertent. The club's "Answer" section essentially denies each paragraph of the plaintiffs' complaint, even while admitting that the club "evaluates and hires performers, that performers are required to sign in before entering the club, and that it maintains minimal rules to operate properly and legally." In its counterclaim, Magic City claims that the plaintiff dancers signed either an "Activity and Facility Use Agreement" or an "Independent Contractor Agreement," either of which would make the dancer legally an independent contractor or tenant, but in any case, not an employee—and that the agreements set forth the fees the dancers must pay to other club employees, and the rules under which they perform at the club, violation of which may result in fines. The club also charges that the dancers failed to utilize the "dispute resolution clause" in the signed agreements, and that their lawsuit should be barred on that basis as well. No date has yet been set for a hearing in the matter. The dancers' complaint may be read here. Magic City's Answer and Counterclaim may be read here.