Latest challenge to gig economy? Exotic dancers in Texas suing strip clubs for back wages.

Dancers argue they deserve to be paid an hourly wage as employees. Club owners say they often make far beyond that in tips.

By Kristen CabreraJanuary 4, 2022 12:46 pm, ,

A growing number of exotic dancers in Texas are suing club owners to recoup back wages. They say they deserve to be paid as employees, not contractors, and earn hourly pay. Club owners argue dancers often make far beyond hourly wages with tips, but that’s only if customers show up.

The Texas Observer’s Lise Olsen joined Texas Standard to talk about her reporting on strip club lawsuits. Listen to the interview with Olsen in the audio player above or read the transcript below.

This interview has been edited lightly for clarity.

Texas Standard: What’s driving this boom of lawsuits against strip clubs?

Lise Olsen: It really started maybe 10 years ago, and then it’s really accelerated in the last five years or so where women who have not been paid at all any wage, any hourly wage, have been filing lawsuits contesting a practice in which the strip club owners basically say they work as, you know, like salon beauty operators, that they work at their own risk, they collect tips or they don’t. And so sometimes they make no money.

And lawyers have been winning these lawsuits. They’ve been saying these owners really do screen these workers. They really do require them to work certain shifts. They have auditions and these women do meet the criteria for employees under both federal and state laws and that they should be paid. So they’re winning lawsuits, but the practices aren’t changing, so the cycle goes on and accelerates.

Is that because the awards in these cases are small ? Why would these companies, that I imagine make tons of money, want to be dragged into court by by these workers?

There’s a couple of attorneys I spoke with who do a lot of these cases all over the country, who are based in Houston. And one of them said, yeah, the club owners essentially realized that if they go and pay back wages, which are essentially minimum wage or waitress wage, to these tipped employees and settle out of court, then yeah, the expenses are pretty small. Unless, say, a lot of women at the same club can prove they weren’t paid for years and years and years, in which case, you know, the awards can be in the millions.

And sometimes those cases make big headlines. But most of the cases, I think, are settled for relatively small amounts. So the clubs just pay and go on and continue to do the same thing and hope this the next round of employees won’t see them.

It sounds like they see it as a cost of doing business. But you write that a lot of clubs, especially here in Texas, appear to be part of a franchise, is that right?

Yeah, there’s a couple of pretty large corporations that own these clubs. There’s one based in Houston that I wrote about that happened to have been sued several times in pending cases in Texas courts. And yeah, it’s a pretty big business. And during the pandemic, there was a downturn, but then it went back up. And so they’re really making quite a lot of money. And the company in Houston I wrote about has really grown. So this is, for some corporations, this is big money. Of course, there are a lot of these clubs that are owned by local business owners. And so, you know, that’s a different story. But there are definitely corporate owners that own clubs in multiple states.

Is there any sign that these could change the way the industry does business, that we could see changes in how these dancers are being paid?

I think there has been some change in California. There’s been kind of a crackdown on the practice. You know, some of the club owners argue, well, the practice benefits dancers because often the dancers make a lot more than a regular wage in tips. But there are plenty of times when the dancers would have to pay for their spot, actually rent their spot, and then don’t make enough, don’t make the money back, you know, work for hours and don’t make anything.

So the clubs in California have been required to pay wages. It seems like that overtime there may be an evolution towards some sort of hybrid system where just like other tipped employees who get a minimum wage, they can keep also their additional tips, but at least are guaranteed that they make something.

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