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July 6, 2015

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Gentlemen’s club files counterclaim against dancers

Map of Sapphire

Sapphire

3025 Industrial Rd, Las Vegas

A lawsuit claiming thousands of current and former topless dancers at the Sapphire Gentlemen’s Club in Las Vegas aren’t really independent contractors and are owed back pay has advanced toward a March trial — with a twist.

The twist is that the owner of the Sapphire has not only denied it’s violating wage and hour laws with its current independent contractor system, but that it has filed a counterclaim against the dancers who filed the lawsuit.

Sapphire bills itself as the world’s largest gentlemen’s club with some 400 dancers nightly.

While independent contractor arrangements are the standard practice in the industry, the November 2009 lawsuit filed in Clark County District Court claims Sapphire has so many rules governing the dancers’ working conditions that they don’t qualify as independent contractors.

Dancers, for instance, are required to work a minimum number of hours — six or longer — per shift, the suit claims. It says they are prohibited from leaving the premises during their shift, can’t leave with customers, can’t date or socialize with customers during their off hours and must entertain customers “according to means and methods prescribed by” management.

They must pay club managers and employees for the right to work at the club, charge minimum fixed fees for table and lap dances, promote sales of alcohol and other drinks, accept offers of drinks from customers, appear on stage to dance at fixed times, comply with a dress code and wear approved costumes and uniforms, the suit charges.

Failure to follow the rules will result in suspension or termination, the lawsuit charges.

The dancers won an initial victory in the case May 24 when District Judge Kenneth Cory granted their motion to certify the case as a class action representing topless dancers, erotic dancers, strippers, entertainers and hostesses who worked at the club since November 2006.

That certification came despite arguments by Sapphire that no current dancers are plaintiffs in the lawsuit, that the plaintiffs are just a handful of former dancers, that the proper place to resolve wage disputes is with the Nevada Labor Commissioner and that what’s really driving the lawsuit is a group of out-of-state attorneys trying to change Nevada’s longstanding strip club industry procedure.

“The Labor Commissioner hasn’t seen fit to enforce labor laws against clubs in this state. The (U.S.) Department of Labor hasn’t done that. The only people that have been interested in doing that are effectively a group of lawyers coming over from California importing their tactics they’ve used there,” Sapphire attorney Mark Ferrario said during oral arguments in May.

Ferrario, of the firm Greenberg Traurig LLP, and co-attorney Tami Cowden submitted to the court 142 declarations signed by Sapphire dancers saying they favor the current independent contractor arrangement.

The dancers signing the statements were told by the attorneys that should the lawsuit be successful, it’s likely they would earn minimum wage and keep any tips.

“I do not agree with those former dancers (suing the club) because I do not consider myself an employee of Sapphire. I am an independent businesswoman and I can dance at Sapphire, or other clubs, or work other jobs when I am not performing at Sapphire,” the dancers’ declarations said. “These former dancers cannot represent my interests because I do not want to change the system at Sapphire, my use of Sapphire’s facilities or how I make money from customers of Sapphire.”

But Michael Rusing, one of the attorneys suing Sapphire, argued topless dancing clubs are seeking legitimacy.

“If they’re going to seek legitimacy they have to accept the fact that they need to have a legitimate relationship with the dancers, and if they’re employees, they’re employees and they need to be treated as such,” he argued.

He said there’s been a lot of concern nationwide about “large-scale abuse of independent contractor status” in the United States, and the Sapphire case is a prime example.

“The bottom line is that you cannot contract around the wage and hour law, any more than you can contract or waive discrimination laws, child labor laws or those sorts of things that were enacted and designed to protect these very people who are being pressured to waive this status,” he said.

He downplayed the importance of the declarations submitted by the dancers, suggesting they were pressured to sign the papers and asking “were the numerous nonobvious benefits of having employee status explained to them? Unlikely.”

“Plantation owners could have obtained affidavits from slaves, saying that they liked things just the way they were. We’ve got room and board, we get to work outdoors, etc.,” he added.

Also among the attorneys representing the dancers is Robert Starr of Woodland Hills, Calif., who has a Web site called exoticdancerrights.com explaining dancers’ rights.

Sapphire, in the meantime, filed a counterclaim against the five former dancer plaintiffs in the lawsuit, charging breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment and conversion.

Sapphire charged in the counterclaim that since the former dancers are trying to cancel their independent contractor agreements, if they’re successful they must return to Sapphire “dance fees” paid to the dancers by lap dance customers.

“Should it be determined that counterdefendants were not independent contractors, then the dance fees rightfully belonged to (Sapphire owner) SHAC LLC,” the counterclaim charges.

Sapphire is trying to have the counterclaim extended so all the class-action plaintiffs would also be named as defendants in its counterclaim.

That means, if the motion is successful and the class-action plaintiffs are successful in their lawsuit, Sapphire could seek the return of “dance fees” from all dancers received since November 2006.

In court papers, the Sapphire attorneys called the class-action plaintiffs: “Former exotic dancers who received thousands of dollars in fees for their performances while paying only minimal fees for use of Sapphire’s venue.”

They said the former dancers “claim entitlement to protection under Nevada’s minimum wage laws despite their repeated acknowledgement that they are not employees. Purporting to speak for what they claim are thousands of other independent contractors still engaged in their business as sophisticated performers, plaintiffs seek to retroactively alter the longstanding nature of exotic dancing contracts in Nevada, transforming highly compensated, independent business women into minimum-wage employees.”

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