Judge rejects Dells strip club settlement

December 19, 2018

MADISON – Owners of a Wisconsin Dells strip club and the exotic dancers who worked for them are asking a federal judge to approve a $400,000 settlement to a Fair Wage Act class-action lawsuit the Cancers filed

Last month, District Judge James Peterson rejected preliminary consideration of the agreement between Cruisin’ Chubby’s Gentleman’s Club and about 110 dancers, saying it was too bare bones. However, he gave the parties a chance to provide the needed information

He found that the proposed settlement, which included $262,312 for the dancers and $137,706 for their attorneys, lacked an explanation as to why it was considered a fair settlement amount. The proposal also lacked information about the process used to calculate the dancer’s potential damages and why the proposed agreement represents a fair settlement for each dancer.

Also, attorneys for the dancers will need to justify their request for fees, which amounted to about 35 percent of the settlement, as they provided no billing records or explained why their request was a reasonable amount.

In response, the parties Tuesday renewed the $400,000 proposed settlement outlining the number of hours the dancers worked at the $7.25 per hour minimum wage rate since Feb. 22, 2014.

The law allows plaintiffs to seek damages for three years prior to filing suit.

According to the calculations supplied to the court:

the dancers worked 39,780 regular hours and 15,370 overtime hours since February 2014;the owners faced exposure to $1.388 million in damages, which included double damage for unpaid overtime wages, if the case had gone to trial.The dancers’ attorney supplied billing records which included some legal fees billed at $500 per hour and listed their years of experience to justify the rates.

Two dancers, Teriana Jones and Bethany Morrissey, filed suit in 2017 alleging they should be considered employees of the club instead of independent contractors, a claim brought against strip clubs more frequently in recent years.

Their suit contended that they danced on stage and performed private dances for customers that involved varying degree of nudity and customer interaction. The women also contended that the club owners violated state and federal law by keeping a portion of the tips they received.

According to the complaint:

The dancers earned money by soliciting tips from customers while dancing on stage and collecting fees for private dances. Fees for private dances can vary from $20 for a topless lap dance to $300 for a “VIP” dance. Dancers alleged that they weren’t paid for management-required nude events and the Edge ’O Dells campground, which is nearby the club, and talk to the campers.

The club’s owners disputed that the dancers were employees due to the conditions of their employment, which is structured for independent contractors.

In May, Peterson dismissed the corporate defendants from the suit but not the individual defendants Timothy, Kenneth and Lantz Ray Roberts. He also excluded claims related to work at the campground, saying the suit would focus just on the employment conditions at the nightclub. In the same order, Peterson declined the dancers’ motion for summary judgment.

Earlier in the litigation, Peterson set trial for Oct. 18 but the parties began engaging in settlement discussions and the trial was taken off the court’s calendar.

If Peterson preliminary accepts the revised proposed settlement, he would issue a final order after notifying the class members to the suit and hold a hearing to determine the fairness of the settlement.

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