Court Rules that Rick’s Cabaret Violated New York Deductions Law by Charging Fines and Fees to Exotic Dancers Represented by Nichols Kaster, PLLP

On November 19, 2013, the United States District Court for the Southern District of New York ruled that Rick’s Cabaret violated New York Labor Law by charging its exotic dancers fines, fees, and money known as “tip outs,” which the dancers paid to club management and others.  Granting the Plaintiffs’ motion for summary judgment on their claim under New York Labor Law’s deductions provision, § 193, Judge Paul A. Engelmayer stated, “[P]laintiffs were required to pay tip outs, fees, and fines to the Club out of their own pockets.  Requiring employees to pay these amounts from their own funds and in separate transactions is precisely the harm at which § 193(3)(a) was aimed.”  The ruling comes on the heels of the Court’s September decision that the more than 1,900 current and former exotic dancers at Rick’s Cabaret in New York were misclassified as independent contractors and are employees under the Fair Labor Standards Act and New York Labor Law.  The Court’s November 19th Order also denies Defendants’ motion for partial reconsideration on the misclassification ruling and sets the class period end date for the state law claims in this case at October 31, 2012, making the class period span just over eight years. 

 “Employees should not have to pay to work. The whole point of New York’s wage laws is that employers pay employees, not the other way around,” said Plaintiff’s Counsel E. Michelle Drake.  “The Court’s ruling is that employers, not employees, must pay the costs of running their businesses.  Employers cannot take advantage of their workers and reap illegal profits at the employees’ expense.”   

Plaintiffs are represented by Steven Andrew Smith, E. Michelle Drake, and Anna P. Prakash from Nichols Kaster, PLLP, which has offices in Minneapolis, Minnesota and San Francisco, California.  The case is entitled Hart, et al. v. Rick’s Cabaret International, Inc., et al., No. 09 Civ. 3043 (PAE) (S.D.N.Y.)