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Conn. Judge Says Exotic Dancers Must Arbitrate Wage Claims

By MICHELLE TUCCITTO SULLO, The Connecticut Law Tribune
Published: January 25, 2016

Exotic dancers who perform at the Keepers Gentlemen's Club in Milford claim they haven't been paid fairly – they say they haven't received minimum wage and aren't even allowed to keep all of the tips customers give them. The women took their complaint to the state court system last year, but a judge recently concluded they will have to fight for fair wages before an arbitrator instead.

While the case may involve semi-nude performers, it focuses on two legal issues that have been very much in the employment law mainstream in recent years: workers questioning whether they are being classified as independent contractors when they are in reality employees; and contract clauses requiring worker complaints to be adjucated through arbitration rather than litigated in court.

Six women brought a lawsuit against Keepers Inc. and its president and director, Joseph Regensburger, in Superior Court in New Haven in March 2015. The plaintiffs—Crystal Horrocks of New Haven, Yaritza Reyes of New York, Dina Danielle Caviello of Wolcott, Jacquelyne Green of Bristol, Sugeily Ortiz of Stratford and Zuleyma Bella Lopez of Branford
—claim violations of the Fair Labor Standards Act. The women claim the club management hasn't paid them minimum wage for the hours they have worked and failed to pay them time-and-a-half for overtime.

"The defendants have unjustly and unlawfully enriched themselves at the expense of their employees," their lawsuit claims.

Attorney Stephen Bellis of the Pellegrino Law Firm in New Haven, who represents the gentleman's club, filed a motion seeking a stay of the proceedings until arbitration could take place. According to Bellis' motion, the women signed agreements to use binding arbitration in any dispute with the club based on state or federal statute, and they also signed "employment lease agreements" acknowledging they are independent contractors rather than full-fledged employees. The plaintiffs had claimed any entertainment lease agreement should be void because it sought to implement an allegedly "illegal employment scheme."

In a 14-page decision issued Jan. 4, Superior Court Judge Robin Wilson concluded the women's wage claims fall within the scope of an arbitration agreement and should be decided by an arbitrator. Wilson granted the defendants' motion for a stay of the court proceedings.

"We feel Judge Wilson made the correct decision," Bellis said. "There were contracts signed by the entertainers, in which they agreed to go to arbitration in the case of any dispute."

Bellis said on Jan. 25 he is in the process of conferring with attorneys to decide on an arbitrator and schedule arbitration hearings. He said he expects any hearings to occur within the next couple of months.

Attorney A. Paul SpineIla of SpineIla & Associates of Hartford, who represents the dancers, could not immediately be reached for comment.

The women claim the exotic, or topless, dance club in Milford, brings in annual gross sales in excess of $500,000 a year The women stated in their lawsuit that they performed on stage, in common areas and in semi-private rooms, and that they would earn tips from customers. They worked at the club from about 2011 to 2014, court documents show.

In general, the women claimed violations of the Fair Labor Standards Act, citing unpaid wages, unpaid overtime and unlawful deduction from wages. According to their lawsuit, the club's management improperly made them share their tips and gratuities. They had to pay a"house fee" as a condition of employment, and had to pay a fee to the disc jockey on the night they worked, the lawsuit alleged. Through their lawsuit, the women sought all lost wages and economic benefits, costs and attoiiiey fees, treble damages for failure to pay wages, compensatory damages and interest.

"The plaintiffs, who have no real opportunities to profit from the success of the defendants' business, have depended on customers' tips and gratuities, which make their opportunities for profit or loss a function of how much money customers have and are willing to spend," their complaint states.

Their lawsuit claims the women were misclassified by the club as "independent contractors," even though club management controlled their work schedule, conduct, dress, songs they danced to and rates they charged for dances. Their litigation claims the misclassification meant they weren't able to receive the benefits associated with being full-fledged employees, such as workers' compensation or unemployment benefits, if they were to lose their jobs. The women still can pursue their FLSA allegations, but they have to go through an arbitrator, under Wilson's ruling.

"The arbitration agreement provides that the scope of the arbitrator's authority is to decide any and all claims, state or federal, that arise between the plaintiffs and the defendants," the judge wrote. "The claim that the entertainment lease agreement violates state and federal employment laws, as well as public policy considerations, falls within the arbitration agreement's 'any and all controversies' requirement."