The wage theft lawsuit was brought by a group of women working as exotic dancers at The Godfather, a strip club in Louisville, Kentucky. The dancers, known as entertainers, were classified as “independent contractors” by their employers. However, the court ruled that this was a misclassification, and the entertainers were in fact employees of the club.
According to the court, the club exercised “immense control” over the entertainers’ work. They were all paid the same way, performed the same job functions, and were subject to the same procedures. For example, the entertainers were required to clock in and out for every shift, were fined for missing a shift, or leaving early/ arriving late. The club covered the primary expenses, including rent, utilities, and advertising the entertainers. The entertainers were only tasked with covering the cost of makeup and clothing. Further, they were required to sign a non-compete clause stating they would not work at other clubs in Louisville while working at The Godfather. The entertainers were required to pay rent to the club for dances and performances. In addition to commission from drinks, entertainers’ income came from the tips they received. Importantly, the entertainers were essential to operating as an adult entertainment club.
The court assessed several factors in determining the entertainers’ proper classification was that of employee, not independent contractor. Factors considered by the court included the fact that the entertainers worked at the club for a considerable length of time, they did not possess any prior specialized skills, their opportunity for profit was considerably less than that of the club, the club owners had primary control over the entertainers, and that the entertainers themselves played an essential role in the success of the club. For these reasons, the court ruled that the entertainers were misclassified as independent contractors, and were therefore entitled to overtime pay and minimum wages as employees under the Fair Labor Standards Act.