In December 2014, a federal district court in Texas approved a $2.3 million settlement on behalf of approximately 190 exotic dancers who claimed they were misclassified as independent contractors to avoid payment of overtime and minimum wages.
In Jones v. JGC Dallas LLC (N.D. Texas, Case No. 3:11-cv-02743), the plaintiffs claimed they worked as exotic dancers at various clubs in excess of 40 hours per week and only received compensation in the form of tips. Plaintiffs also claimed they were required to share tips with other club employees such as managers and DJs and that the clubs supervised and directed them in a manner consistent with that of an employer. The clubs argued the plaintiffs were independent contractors, not employees. After two years of litigation, the parties agreed to and the court approved the $2.3 million settlement, which included a substantial payment for attorney’s fees.
This case points out that misclassification of employees as independent contractors is an issue which affects almost all sectors of the labor force. Moreover, any apparent savings realized by misclassification of employees as independent contractors can be erased by even a single lawsuit brought by a class of employees.