International Follies, Inc. and the company’s part-owner are facing a lawsuit that takes issue with the parties’ employment practices. The defendants allegedly operate an adult entertainment club in Atlanta known as Cheetah that employs or employed the plaintiffs as entertainers.
Until April 9, 2016, the entertainers were supposedly misclassified as independent contractors and were paid only in tips received from customers. The suit claims they were required to adhere to strict rules and guidelines that reflected an employer-employee relationship. The defendants supposedly specified the entertainers’ attire, hours, pricing, and conduct while at the club and fined them between $25 and $50 if they were late for work. On top of that, the case claims the plaintiffs participated in a tip pool from which the “house mom,” floor manager, disc jockey, and other typically non-tipped employees were permitted to retain wages – a practice the case claims violates the Fair Labor Standards Act’s tip credit requirements.
After April 9, 2016, the complaint continues, entertainers were reclassified as employees, though their duties remained essentially the same. The plaintiffs were then paid $2.13 per hour instead of being compensated solely in tips, the case says, with the defendants applying a tip credit to their wages despite maintaining a supposedly unlawful tip pool practice. Further, the lawsuit claims the plaintiffs spent at least one hour preparing for each shift and were required to remain on premises after the club closed to complete a check-out procedure and wait for customers to leave the parking lot – time for which they allegedly received no wages. Moreover, the case takes issue with the “cover” fee entertainers were supposedly required to pay when they were unable to work and had to find other employees to cover their shifts. These charges, according to the suit, caused employees’ wages to fall below the required hourly minimum and, when applicable, overtime rate.
The case notes that Cheetah has “repeatedly been sued for similar non-compliance with the FLSA” and has defended itself in “numerous arbitration proceedings” alleging violations similar to those included in this lawsuit.