Dancing out of Court: Strippers are Now Legal Employees according to the court.
The United States Court of Appeals for the Fourth Circuit has decided that exotic dancers are now considered legal employees, not independent contractors. What does this mean for exotic dancers across the state of North Carolina? It means that the dancers are finally entitled to the protection of the federal Fair Labor Standards Act, which sets minimum wage, overtime pay eligibility, child labor protection, and recordkeeping requirements for employers.
Until now exotic dancers have always been considered independent contractors. This means that the individual who pays the dancer (typically club owners or managers) may ask the dancer to perform a certain job, but cannot control how or when that job is done. In essence, if exotic dancers are labeled as independent contractors they maintain all control over how and when they perform without interference or stipulations.
The independent contractor v. employee debate began with Laura McFeeley and several other dancers of the Jackson Street Entertainment Club in Maryland filed suit against the club alleging that club owners and managers were not paying them minimum wage yet were controlling all aspects of their ability to perform and earn money. When the district court held that the exotic dancers were in fact employees and not independent contractors, the club owners appealed landing themselves in the 4th Circuit Court of Appeals. (For information about the jurisdictional control of the U.S. Circuit Courts click here.)
The Court of Appeals decided to look solely to the “economic realities of the relationship” between the dancers and the club owners/managers. The economic reality test looks at six factors: (1) The degree of control that the putative employer has over the manner in which the work is performed; (2) the worker’s opportunities for profit or loss dependent on his managerial skill; (3) the worker’s investment in equipment or material, or his employment of other workers; (4) the degree of skill required for the work; (5) the permanence of the working relationship; and (6) the degree to which the services rendered are an integral part of the putative employer’s business. No single factor is dispositive — all six are part of the totality of circumstances presented. McFeeley v. Jackson St. Entm’t, LLC, No. 15-1583, 2016 U.S. App. LEXIS 10352 (4th Cir. June 8, 2016).
Although the above test is subject to a case-by-case analysis, the court noted that many of the facts specific to McFeeley’s case likely mirrored those of many other clubs across the state and even the country. Where club owners made dancers pay entrance fees, sign in before work, set rules regarding tip disbursement and allocation, controlled dancers’ schedules, and imposed strict rules to be obeyed during working hours, the court reasoned that the club no doubt had “significant control over how plaintiff’s performed their work.” Id. Mere control over an individual does not always establish the employee/employer relationship — it is the degree to which that control is exercised that becomes of the most importance in case analysis and court decision. In McFeeley’s case, the degree of control was significant, thus establishing the employee/employer relationship and invoking application and compliance with the federal Fair Labor Standards Act.
The June 8, 2016, decision was not only significant for exotic dancers across the 4th Circuit’s jurisdiction, but for individuals in any field of work who feel they are being wrongly labeled as an independent contractor. The same economic reality test that was applied in McFeeley’s case will be applied in every case where there is a discrepancy in job label. If you feel as if you are not receiving the compensation or protection you are entitled to in your work environment, a licensed attorney can help you receive these rights. To learn more about your rights as an employee and to find a licensed attorney who can assist you with your case, click here.