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Dancers Accuse NYC's Penthouse Club Of Pay Violations

Law360 - Stewart Bishop

A class of current and former exotic dancers at the Penthouse Executive Club in New York accused the venue Thursday of a host of employment violations, including failure to pay overtime and confiscation of tips.

Former dancer Victoria Hunter filed the suit on behalf of the class, alleging the club owners took advantage of the dancers by failing to pay overtime, confiscating tips, charging a “house fee” for the privilege of working there, and other violations of federal and state labor laws, according to the suit.

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Hunter’s attorney, Justin M. Swartz of Outten & Golden LLP, said the suit was filed after the club owners balked at Hunter’s desire to join another class action alleging widespread workplace violations by the famed strip club.

The other suit is In re Penthouse Executive Club Compensation Litigation, and is currently pending in New York. Swartz said he expected the two legal actions to be combined at some point in the future.

In Hunter’s suit, the dancers allege the club encourages customers to tip them not with cash, but with fake currency called Executive Money, which is later exchanged for real money, the suit says.

The club charges customers who purchase Executive Money a 20 percent “service charge,” which is kept by the club and not distributed to customer service workers, the suit says.

When the dancers exchange the bogus cash for real dollars, the club again takes another cut for itself, according to the complaint.

Hunter also says the club forces dancers to share tips with employees who do not provide customer service, and for each shift worked, the club charges each dancer an unlawful house fee in violation of New York and federal labor laws, the suit says.

The dancers further allege they are required to purchase and maintain a variety of uniforms, shoes and certain types of underwear from the so-called House Mom, and are not reimbursed by the club for their cost or upkeep.

Additionally, the club fails to pay dancers overtime for work in excess of 40 hours per week, and at times also fails to meet minimum wage standards, the suit says.

“The adult entertainment industry in New York City and elsewhere remains largely out of compliance with basic worker protection statues,” the complaint said. “Clubs such as the Penthouse Executive Club are well-positioned to take advantage of entertainers and deny them their basic workplace rights.”

The dancers are seeking class certification, unpaid wages, damages, as well as reimbursement of all unlawful deductions, including tips, service charges and house fees.

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The dancers are represented by Justin M. Swartz, Elizabeth Wagoner and Mariko Hirose of Outten & Golden LLP.

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The case is Hunter v. The Executive Club LLC et al., case number 1:11-cv-06465, in the U.S. District Court for the Southern District of New York.