Exotic Dancers Are ‘Employees’ Covered by Race Bias Law

By Patrick Dorrian

Dancers at a strip club in Jackson, Miss., were “employees” protected by federal civil rights laws, a federal judge ruled in a case brought by the Equal Employment Opportunity Commission.

The EEOC alleged in a September 2016 lawsuit that black exotic dancers at Danny’s Downtown Cabaret weren’t treated the same as white dancers. Black dancers were required to work at a related club that didn’t always have air conditioning and permitted patrons to use illegal drugs, smoke cigarettes, and grope the dancers, the commission said. Black dancers who wanted to work at Danny’s instead had to pay a $100-per-shift fee, the EEOC alleged.

Danny’s countered that it can’t be held liable for race discrimination because the five dancers on whose behalf the EEOC sued were independent contractors. Federal workplace rights laws only cover “employees,” the club said.

The proper employment status of a worker is the key to determining protections under various federal, state, and local laws, including those requiring a minimum wage, overtime pay, and freedom from job bias. The issue has become increasingly important given the emergence of gig and other modern work arrangements. The test used to determine employment status often varies depending on the law at issue in a given case.

Here the U.S. District Court for the Southern District of Mississippi in its Sept. 11 ruling looked primarily to a federal appeals court decision under the Fair Labor Standards Act in rejecting Danny’s argument and granting partial summary judgment to the EEOC. The black dancers were employees of the club even though Danny’s didn’t pay them a regular salary, a minimum wage, or for overtime hours worked, the court said.

Danny’s otherwise exercised a degree of control over the dancers that made them economically dependent on the club, Judge Henry T. Wingate said. Danny’s set the black dancers’ hours and the fees they could charge for private dances. It also approved the music they used while dancing, he said.

That evidence “destroys any arguments that they were independent contractors,” the judge said. Most other courts “around the country” that have recently addressed the question have found that exotic dancers are employees, he said. He pointed to decisions by federal trial courts in Colorado, the District of Columbia, Florida, Georgia, Indiana, Maryland, New York, and Texas.

Danny’s didn’t cite a single case that reached the opposite conclusion, Wingate said.

Successor Liability Also at Issue

Wingate’s ruling grants an important win for the the EEOC on a key issue in the case. But he noted that Danny’s has also argued that any bias that may have taken place occurred before it bought the club in April 2016. Danny’s says it can’t be held liable as the successor of the prior owner. That motion has yet to be decided, the judge said.

Whether and when an acquiring company may be held liable for discrimination or other legal violations that occurred while the selling company owned the business is another unsettled area of the law. But the EEOC has previously convinced other courts that an acquiring company should be held liable for bias as a “successor” employer, including where the acquisition was structured as an asset purchase so that the acquiring company could expressly disclaim successor liability for any previous employment law violations.

EEOC attorneys in Birmingham, Ala., and Washington represent the commission. Clanton Legal Group PLLC and Carter Law Firm P.A. represent Danny’s.

The case is EEOC v. Danny’s Rest., LLC, 2018 BL 326942, S.D. Miss., No. 3:16-CV-00769, partial summary judgment granted 9/11/18.