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NYC 'gentlemen's club' to pay dancers $8 mln

thomsonreuters.com—Carlyn Kolker

A group of 1,245 dancers at a so-called gentlemen's club in New York City have reached an $8 million preliminary settlement in a lawsuit over unpaid tips and wages, the latest in a series of employment cases in the exotic-dance industry.

The case dates to December 2009, when Stephanie Carattini and Nicole Hughes filed a lawsuit saying that the PenthouseExecutive Club misclassified its dancers as independent contractors. They also said the club failed to pay minimum wage and overtime, as well as expenses for the purchase and cleaning of uniforms, and held on to a portion of tips that dancers received from clients for their dances.

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"The adult entertainment industry in New York City and elsewhere remains largely out of compliance with basic worker protection statutes," the complaint said.

The club later countersued for unjust enrichment, saying it was entitled to some of the tips that dancers kept, saying they were "performance fees" for dances. The dancers engaged in a pattern and practice of "non-employee" conduct, such as failing to report some tips, dancing at competing clubs and performing sporadically at the Penthouse Executive Club, the countersuit said.

The case is one of a string of recent cases alleging unpaid tips and violations of minimum-wage laws among exotic dancers, according to lawyers who have pursued similar cases around the country.

Anna Prakash, an attorney at Nichols Kaster in Minneapolis, helped win a $1.55 million settlement for dancers in Atlanta in June 2012. She said there was a flurry of litigation brought largely by the Labor Department in the 1990s, followed by a hiatus until about 2009. "In the last four years, we have seen an uptick in the litigation," Prakash said.

 PLAINTIFF OBJECTION

Plaintiffs' attorney Philip Zipin said he has pursued some 35 cases in recent years in the Washington metropolitan area.   "The cases stem from the fact that this industry doesn't pay its dancers," Zipin told Reuters.

The preliminary settlement in the Penthouse Executive Club case, which was filed with the court on Friday, gives each dancer a minimum payment of $3,727.79 for the first year she worked at the club. Dancers will receive $988.13 for subsequent years.

Liwanag has "indicated a desire to object to the settlement," according to court papers, which don't specify her reason for objecting.

Justin M. Swartz, an attorney at Outten & Golden representing the plaintiffs, declined to comment, citing a provision of the agreement that prohibits any parties in the case or their lawyers from speaking to the media.

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The settlement must be approved by U.S. District Judge Kimba Wood.

The case is In re Penthouse Executive Club Compensation Litigation, U.S. District Court, Southern District of New York, No. 10cv1145.

For plaintiffs: Justin Swartz ... of Outten & Golden; Lloyd Ambinder and LaDonna Lusher of Virginia & Ambinder; Gratienne Baskin of Urban Justice Center Sex Workers Project; and Jeffrey Brown of Leeds Brown Law.