HOUSTON—Rick’s Cabaret of San Antonio must hand over the names and arbitration agreements of exotic dancers who might belong to a collective-action lawsuit against the adult entertainment club, an appeals court ruled Friday.
The 5th U.S. Court of Appeals, in a blow to Rick’s Cabaret, decided that the identifying and agreement information that a plaintiff requested in her suit against the nightclub will help determine which dancers are bound by valid arbitration agreements and who are therefore unable to receive notice of the action.
The plaintiff, a former dancer at the San Antonio club, sought records of other dancers dating back to July 2016 in her pursuit of claims against the club.
In her original suit, the plaintiff claimed that the club’s ownership had actual knowledge that for “at least the past 20 years that exotic dancers like plaintiff and other exotic dancers at Rick’s Cabaret were employees and not independent contractors and were owed minimum wage compensation under the Fair Labor Standards Act (FLSA).”
In Friday’s unpublished ruling, the 5th Circuit said: “We grant the petition for a writ of mandamus as to the order regarding production of evidence on whether similar claims had been presented for arbitration and related outcomes.”
The appeals court, however, noted that Rick’s Cabaret didn’t have to produce information related to prior arbitrations.
Anne Kramer, an attorney with Boston-based Lichten & Liss-Riordan who represents a former exotic dancer in a similar FLSA case against at 4Play gentlemen’s club in West Los Angeles, told AVN that the misclassification suits have a common theme: Dancers are central to the gentlemen’s clubs’ business model, and the clubs would not exist without them.
Across the U.S., since 2005, more than 430 misclassification lawsuits have been filed against adult entertainment operators.
By classifying them as independent contractors, the clubs profit from the presence of the dancers, “while denying them minimum wage and overtime compensation, requiring them to pay a multitude of fees and tip-outs, and depriving them of the protections offered to employees, which are particularly important during the current pandemic,” Kramer said.
In the Rick’s Cabaret case, the former dancer filed a demand for arbitration as part of her initial independent contractor agreement with the American Arbitration Association alleging FLSA violations, which was ultimately dismissed.
Later, she filed an FLSA collective-action complaint in federal court, alleging FLSA violations on behalf of herself and other similarly situated Rick’s Cabaret dancers who worked without compensation and paid $50 kickbacks per shift.
In the claim, the former dancer filed a motion to conditionally certify the FLSA collective and “for notice to potential plaintiffs,” which could number in the hundreds over four years’ time.
Rick’s Cabaret of San Antonio is part of RCI Hospitality Holdings Inc.’s network of clubs. RCI Hospitality operates more than 40 clubs in New York, Miami, Charlotte, Dallas, Chicago, Pittsburgh, Houston, Minneapolis, St. Louis and other markets under brand names such as Rick's Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars, Tootsie's Cabaret and Scarlett's Cabaret.
Calls to RCI Hospitality for comment on the 5th Circuit ruling went unreturned by AVN at post time.
In separate RCI Hospitality news, Adam D. Wyden, the sole principal of ADW Capital Management LLC, took a stake in the adult entertainment company.
Last month, according to an SEC filing, the New York investor acquired 457,000 shares of RCI Hospitality common stock, which was trading at $15.37 a share on the Nasdaq today.
