Dancers Claim Ky. Club Used Booze To Get Bad Contracts
Source: Law360
By Chuck Stanley
September 30, 2016
Proprietors of a Kentucky strip club got dancers drunk before pressuring them to sign “unconscionable” labor contracts that waived their rights to employment protections and required arbitration, according to a motion filed Thursday urging a Kentucky federal court to hear the case.
Dancers for PT’s Showclub in Louisville say management encouraged them to drink to intoxication during their shifts before pressing them to sign contracts that misclassified them as contract workers and contained illegal arbitration clauses meant to deprive them of their collective action rights.
Managers did not allow the dancers to read the contracts and refused requests for copies of them, according to the motion filed by the dancers that seeks to avoid summary judgment and keep the case out of arbitration.
“As the [dancers’] supervisors regularly encouraged them to drink during their shifts and in fact provided them with alcohol, [they] were intoxicated at the time they were forced to sign the agreements,” the motion states. “[The dancers’] managers pulled them aside either in the middle of their shifts during the middle of the night, or right before their shifts were about to start, and ordered them to sign their agreements immediately.”
The dancers first filed suit against the club’s management group, Kentucky Restaurant Concepts, its parent company, VCG Holding Corp., and two of its employees, Michael Ocello and Troy Lowrie, in June, accusing them of violating the Fair Labor Standards Act by misclassifying the dancers as independent contractors despite exercising significant control over their fees, hours, clothing and dancing. The club used the classification to justify failing to pay the dancers minimum wage, charging them for stage time, and improperly deducting portions of their wages, they say.
VCG Holdings asked in August to have the case dismissed, citing arbitration agreements and class action waivers in the dancers “entertainment lease” agreements. The dancers contend the waivers are unenforceable because they violate provisions of the National Labor Relations Act and the FLSA protecting collective action.
In addition to running afoul of labor laws, the contracts were executed in a “procedurally unconscionable” manner, the dancers argue. According to the motion, they were pressured to sign the contracts without having time to read them. The club’s management denied requests for time to review the contracts or for copies after they were signed, according to the motion.
In the case of one dancer, the arbitration clause requires her to bear half the costs of a prospective arbitration, the motion claims. Such a requirement would make any effort to bring a claim against the club prohibitively expensive, according to the motion.
Representatives for the parties did not immediately respond to requests for comment.
VCG Holding Corp. and Kentucky Restaurant Concepts are represented by Katharine C. Weber, Allan S. Rubin and Paul A. Caligiuri of Jackson Lewis P.C.
Troy Lowrie and Michael Ocello are represented by Brian Rattliff and Rand Kuger of Kruger & Schwartz, and Bradley Jay Shafer of Shafer & Associates, P.C.
The dancers are represented by Trent Taylor and Robert E. DeRose of Barkan Meizlish Handelman Goodin DeRose Wentz LLP, Harold Lichten and Thomas P. Fowler of Lichten & Liss-Riordan PC and Donald Fontaine.
The case is McGrew et al. v. VCG Holding Corp. et al., case number 3:16-cv-397-TBR, in the U.S. District Court for the Western District of Kentucky.