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Dancers sue Oregon strip clubs, alleging federal wage violations similar to gig workers

For Cat Hollis, working at a Portland strip club meant first paying the boss.

Hollis would pay $5 for each eight-hour shift.

Before heading home, Hollis would make another round of payments from the night’s tips, handing out at least $20 apiece to an assortment of other people employed by the club.

“There were days I walked out with absolutely nothing after I paid my fees,” Hollis said.

Now Hollis and three other dancers are suing six clubs in Oregon, a place known for its surfeit of adult entertainment thanks to the state Constitution’s strong free speech protections.

The dancers’ lawsuits allege the establishments violated mandatory minimum wage provisions of the federal Fair Labor Standards Act.

Filed in U.S. District Court in Portland and Eugene, the claims accuse the clubs of “absconding” with the dancers’ tips and demanding “illegal kickbacks” in the form of house fees that dancers said they pay to work.

They allege they are treated as independent workers through their compensation arrangements even though the clubs require them to act as employees by setting their work hours and working conditions down to the music.

The question of whether a worker is an employee or an independent contractor is “one of the hottest issues in all of American employment law,” said Keith Cunningham-Parmeter, a professor at Willamette University College of Law and an expert in labor law.

The stakes are high for companies like strip clubs. Employees are expensive, Cunningham-Parmeter said. They must be paid minimum wage and overtime. They earn unemployment insurance benefits. They are entitled to a “whole basket” of employment rights, he said.

And yet one study found up to 30% of employers misclassify their workers as independent contractors when they are in fact employees, he said.

He said gig workers like those at Lyft and Grub Hub represent the latest examples of the ongoing debate.

“I know thousands of exotic dancers have argued that they are in fact employees and that they mostly seem to have very good cases,” he said. “The central question is how much freedom does the worker have versus how much control does the employer have over the worker.”

‘SHINE A LIGHT ON THIS INDUSTRY’

Amanda Marshall, one of the lawyers representing the dancers, said the claims seek to shine a light on the industry.

“It’s not an attempt to shut the industry down,” she said. “This is an attempt to make sure the industry is fair and equitable.”

Dancers don’t “fit the traditional definition of an independent contractor,” said Marshall, who practices in Portland and McMinnville.

“The only requirement for work is their ability to take off their clothes and to fit certain aesthetic principles,” she said.

Hollis’ suit names Sassy’s on Southeast Morrison Street. The other dancers are suing Sugar Shack in Salem, Club Sinrock on Northeast Glisan Street, Cabaret II on Southeast Stark Street and two Lane County clubs, Sweet Illusions and Silver Dollar.

In court filings, Anthony Kuchulis, a lawyer for Sassy’s, its owner and managers denied Hollis’ claims and characterized their performances at the club as “occasional and infrequent.”

Kuchulis, who represents Silver Dollar as well, said the claims seek to strip dancers of “the right to contract.” Every other type of stage performer has that right, he said.

“We are working hard to resolve these claims and want what’s best for the workers and local small businesses,” he said in an emailed statement.

Likewise, lawyers for Cabaret II alleged dancers at the club are independent contractors. An email to the lawyer for Sinrock was not returned. Sugar Shack and Sweet Illusions have not filed a legal response to the claims and their owners could not be reached for comment.

DANCER ALLEGES RETALIATION

Nationally, dancers have pushed back on being treated as independent contractors, said John Kristensen, a Los Angeles-based lawyer who is also representing the performers.

In recent years, he said, dozens of federal court judges from Alaska to Georgia have ruled in dancers’ favor on wage claims like the ones filed in Oregon.

Kristensen pointed to a 2019 ruling out of Georgia, where a federal judge called the idea that strippers rent floor space at clubs “absurd” and a “silly attempt to redefine reality.”

He said unwritten rules for handing out a portion of dancers’ tips to other workers are common and that such demands end up subsidizing those workers’ pay.

“There are some clubs I have seen where the other employees aren’t even on payroll,” he said. “They make their entire income on tips from the dancers.”

Hollis’ claim includes allegations of retaliation. Kristensen said the owner of Sassy’s told Hollis in writing that the dancer was effectively blacklisted from working at his clubs for pursuing a lawsuit.

“It’s really egregious,” he said. “You can’t retaliate in the United States of America against someone who is standing up for their wages.”

In response, Kuchulis called Hollis’ claim of retaliation “especially troubling” because Hollis sought to work as a contract performer at Dante’s while suing Sassy’s over allegedly being treated as a contract worker. Both are owned by Frank Faillace.

FROM DANCING TO ACTIVISM

Hollis said they quit Sassy’s in 2019 after a dispute with a manager over an encounter Hollis had with a customer.

Hollis works from home these days, mostly for an online sex business. Hollis uses they and them pronouns.

Now 32, Hollis started dancing when they were in their mid-20s in Minnesota. They were drawn by the money-making potential and ended up moving to Oregon for its strip clubs as much as its legal cannabis.

During the pandemic, Hollis started a workers’ rights advocacy group called Haymarket Pole Collective.

Stripping is a high-turnover business that’s tough on the body, as well as the ego, Hollis said.

Hollis hopes their lawsuit empowers other dancers to speak up in an industry that can be exploitative and even abuse, they said.

“My goal,” Hollis said, “is to be the last generation of people who have to deal with this.”