In a legal decision with wide implications for strip clubs in Sin City, the Nevada Supreme Court ruled Thursday that dancers at one Las Vegas club are employees, not independent contractors, and are entitled to be paid minimum wage.
The unanimous ruling Thursday in a 2009 class-action lawsuit filed on behalf of six dancers at Sapphire Gentlemen's Club could change the landscape statewide in a business where dancers have for decades depended on tips and even paid "house fees" to establishments that allowed them to work.
"Given that Sapphire bills itself as the 'World's Largest Strip Club,' and not, say, a sports bar or nightclub," the high court said, "we are confident that the women strip-dancing there are useful and indeed necessary to its operation."
Mick Rusing, the Tucson, Arizona, attorney who represented plaintiff Zuri-Kinshasa Maria Terry and five other dancers in the initial case, said the ruling might directly effect more than 6,500 current and former members of the affected class, dating to about 2006.
Rusing said they could be entitled to a combined $40 million in back wages, plus the return of house fees.
"And it keeps going up every month," Rusing said. "As employees, you get a lot of rights. The girls are entitled to be paid. At very least, minimum wage."
Sapphire officials and the attorneys who represented the company before the Supreme Court didn't immediately respond to messages.
The Supreme Court ruling, written by Justice Kristina Pickering, declared clubs are not exempt from provisions of the federal Fair Labor Standards Act.
That includes worker compensation and sexual harassment rules, Rusing said.
"Sapphire argues that the performers had no 'contract of hire' and alternatively that the performers were not 'in the service of' Sapphire," the ruling said.
It declares signed entertainment agreements detailing terms under which Sapphire permitted performers to dance "an express contract of hire," and dismisses Sapphire's assertions that the performers "never intended to be employees."
The high court sent the case back to Clark County District Court for hearings to determine how much the plaintiffs are owed. The Nevada state minimum wage is $8.25 per hour, although some service employees are paid less if they also receive tips.
Ryan Anderson, a Las Vegas attorney who once was involved in the lawsuit, said the ruling will change forever the relationship between companies that enlist dancers to entice customers into their clubs and dancers whose income has been paid by patrons. Anderson in recent years has been recruiting dancers as potential clients for independent cases to recover back wages and benefits at other clubs.
Anderson guessed there are about two dozen topless, strip and nude clubs in Las Vegas, and he noted the ruling covers the entire state. He said he didn't think the ruling would cripple the clubs.
Rusing noted that other courts in other states have issued similar rulings, and that strip clubs have adopted rules to comply.
"They're going to have to do business differently," Anderson said. "They're going to have to sit down with an employment attorney and determine what they're going to have to have when they hire a dancer."