VCG Holdings Corp., the company behind the PT's chain of strip clubs, says it will fight back in a lawsuit filed by two exotic dancers who say clubs cheated them out of wages by classifying them as "independent contractors," not employees.
The plaintiffs -- two strippers from Missouri named Brandy Apple and Amanda Sheer -- say in the class action suit that the clubs threatened retaliation on any of the about 300 dancers who wanted to change to full employees. The women also say their tips from table dances, lap dances and their other sexy services were unfairly taken from them -- first in a required tip split, then in an additional $1-per-song "tip-out" to managers, bartenders, bouncers and other employees.
Brad Shafer, the Shafer & Associates lawyer representing VCG Holdings, rejects the idea that the clubs' business model nefariously cheated the dancers out of their money. He says the strip clubs' contracts with entertainers were based on chair leases, where hairdressers rent a station at a hair salon but maintain independence over their work.
"This is a legal business relationship," Shafer tells Daily RFT. "This is not some type of sham transaction or sham structure."
Some of VCG Holdings' clubs in other states hire dancers as employees, but Shafer says if the strippers crunched the numbers, they'd realize they are better off financially staying independent contractors.
"There are a number of clubs that have had dancers as independent contractors and converted them to employees, and the dancers were so incensed that they went back to classifying them as independent contractors," Shafer says. "When they see what it is really like to be an employee, a true employee under all the laws applicable, the dancers understand it's far more advantageous to them, particularly financially, to operate as an independent contractor instead of as an employee."
See how being a stripping independent contractor is different than being a stripping employee on the next page.
For one thing, contractors get to write off work-related expenses when they file their taxes, Shafer says. Employees don't.
"You see these entertainers take deductions for such things as a home office, travel expenses, any fees they pay to the club, any fees they pay for their costumes, for their nails, for their make-up, tanning salons, gym memberships," Shafer says. "Exotic dancers can take deductions for cosmetic surgery for their business purposes. We see these all the time on tax returns entertainers file. Entertainers cannot do that if they are an employee."
But what if the strippers don't want makeup and surgery? What if they want a paycheck and health insurance?
"You can't take the good parts of being an independent contractor and then say, 'I want the good parts of being an employee as well,'" Shafer says. "You can have one or the other."
See also: 13 Reasons Your Exotic Dancer Hates You
Shafer flatly denies that dancers were threatened or punished for asking to become employees or that they are required to share tips.But, Shafer says, in a tip-intensive industry like a strip club, the dancers are likely to get better service from bartenders, DJs or doormen if they tip them out.
"They are not required to share their tips," Shafer says. "They can voluntarily give somebody a tip."
In their lawsuit, Apple and Sheer's lawyers cite a 1997 court case, Harrell v. Diamond A Entertainment, Inc., to establish precedent that nightclubs must pay dancers a minimum wage.
Shafer knows a thing or two about the Harrell case. He tried it. And it's not proof that strippers are entitled to the rights of regular employees, he says.
The judge in the case ruled that the issue needed to be decided by a jury, Shafer says, but in the end, the plaintiffs dropped the claim without a settlement.
"The plaintiffs saw very clearly that they were not going to win, and they gave up," he remembers.
VCG Holdings still has some time to respond to the suit, which was filed on January 31.