Verma v. 3001 Castor, Inc. - No. 13-3034, 2014 U.S. Dist. LEXIS 88459 (E.D. Pa. June 30, 2014)

Rule:

The presence of club-imposed written and unwritten guidelines for dancers' conduct indicates control and weighs in favor of employee status. Written rules and threats of discipline are tools to control behavior even if they are not acted upon.  

Facts:

Plaintiff Priya Verma ("Verma"), on behalf of herself and all others similarly situated, brings this collective action/class action lawsuit against Defendants 3001 Castor, Inc. d/b/a The Penthouse Club and/or The Penthouse Club @ Philly ("Defendant"), ABDCE Pennsylvania Management, LLC and Doe Defendants 1-10 seeking to recover for Defendant's violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., the Pennsylvania Minimum Wage Act ("MWA"), 43 P.S. § 333.101 et seq., the Pennsylvania Wage Payment and Collection Law ("WPCL"), 43 P.S. § 260.1 et seq., and Pennsylvania common law. Verma, a former exotic dancer at Defendant's adult nightclub, claims that Defendant improperly classified its dancers as independent contractors instead of employees, and as a result, Verma and other potential class members were deprived of the mandated minimum wage for all hours worked and premium overtime compensation for all hours worked in excess of 40 hours a week. She also claims that dancers were forced to improperly share a percentage of their gratuities with Defendant and forced to reimburse Defendant for ordinary business expenses. Verma claims that (i) all dancers are entitled to be paid mandated minimum wages for all hours worked; (ii) all dancers are entitled to premium overtime compensation for all hours worked in excess of 40 hours a week; and (iii) all gratuities earned by dancers are the property of the dancers.

Issue:

Are the dancers at Defendant's nightclub employees within the meaning of the FLSA and Pennsylvania law?

Answer:

Yes.

Conclusion:

The court found that the presence of club-imposed written and unwritten guidelines for dancers' conduct indicates control and weighs in favor of employee status. The dancers' control over their schedules is minimal compared to all of the elements of the work that Defendant controlled. Based on the foregoing facts, the factor of control weighs overwhelmingly in favor of a finding that the dancers were employees, not independent contractors.