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NYC Club Stiffed Exotic Dancers On Wages: Suit

Employment Law 360 - Mike Cherney

A former exotic dancer at the Penthouse Executive Club, an upscale adult nightclub in Manhattan, has filed a putative class action alleging the club failed to pay dancers minimum wage and overtime and confiscated portions of their tips.

The former dancer, Leslie Liwanag, filed her suit Thursday in the U.S. District Court for the Southern District of New York. The suit asks for lost wages and damages on behalf of at least 100 former and current dancers that have worked at the club between Feb. 11, 2004, and the present.

The case is the latest that seeks to extend basic workplace protections to dancers at adult clubs, which the suit alleges is an unorganized industry where workers are disenfranchised by the wide disparities in bargaining power between workers and club owners. "While similar workers have had some success in litigation in other parts of the country in these kinds of cases, the industry practice in New York remains the same," Sonia Lin, an attorney for Liwanag, said Friday. "And because Penthouse is a leader in the field, we think they should be setting an example."

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The suit also names Robert Gans, an owner of the club, and Mark Yackow, a club manager, as defendants. It alleges the club violated both New York state labor law and the Fair Labor Standards Act.

Also among the litany of charges is that the Penthouse Club collects an unlawful house fee from entertainers and does not reimburse them for uniforms. The club also encourages customers to tip entertainers using funny money called "Executive Money," which customers purchase from the club, instead of cash, the suit said. The club charges customers who purchase Executive Money a 20 percent service charge, which is not distributed to entertainers, according to the suit.

As a result, customers who believe they are tipping entertainers a certain amount are actually tipping them less, the suit said. "On its Web site, the Penthouse Club promises customers the 'highest level of customer service, in an environment offering sophistication, class and pleasurable diversions' and boasts that it employs the 'most splendid entertainers from around the world,'" the complaint said. "The Penthouse Club, however, appears not to appreciate the workers who allow it to make such boasts," the complaint continued. In the past, both federal and state courts have found that exotic dancers could be classified as employees under federal and state statutes, including in a number of cases brought by the U.S. Department of Labor, according to the complaint.

"In an industry where the workers are stigmatized because of the sexual nature of their work, it's much easier to deny them rights because they're not expected to fight back," said Sienna Baskin, a staff attorney at the Sex Workers Project at the Urban Justice Center, who is serving as co-counsel for Liwanag. "This is a really good example of the fact that they can still fight back and they can exert their rights."

Liwanag, who worked as a dancer at the Penthouse Club from July 2005 to January 2009, is being represented by Outten & Golden LLP and the Sex Workers Project at the Urban Justice Center.

Counsel information for the Penthouse Club could not be immediately identified Friday.

The case is Leslie Liwanag et al. v. The Executive Club LLC dba The Penthouse Executive Club et al., case number 10-1145, in the U.S. District Court for the Southern District of New York.