Thursday, February 7, 2019
Strip clubs and Big Tech find common cause in California labor fight
By JEREMY B. WHITE
02/07/2019 08:02 AM EST
Technology companies and strip clubs have something in common: they’re both trying to shape California’s approach to the future of work.
A California Supreme Court ruling last year expanding the ranks of workers who should be considered employees — rather than independent contractors — has launched one of the state’s premier policy disputes.
Major tech companies and business allies want to blunt the decision, arguing it will upend the modern economy. Organized labor is backing CA AB5 (19R) to enshrine the ruling in law, contending that the gig economy is depriving workers of the pay and benefits that undergird stable employment.
Now strip club owners have joined the fray, warning that disrupting the status quo will hurt dancers by cutting into their take-home pay and ossifying once-flexible work.
Adult actress Stormy Daniels, in the news recently for suing Donald Trump over a nondisclosure agreement related to her allegations of an extramarital affair, has waded into the issue on behalf of company called Déjà Vu that owns dozens of strip clubs in California and more nationwide.
In a Los Angeles Times op-ed, Daniels argued it would hurt strippers to classify them as employees. (The company retained her as a spokesperson in October, a capacity in which she also joined a protest at the Louisiana statehouse over a law barring adults under the age of 21 from working as strippers).
“As independent contractors, we can perform when, where, how and for whom we want. If we are classified as employees, club managers would be empowered to dictate those conditions,” Daniels wrote, adding that “we need to be able to work when we want, where we want, making reliable money paid at the end of each shift.”
Assemblywoman Lorena Gonzalez (D-San Diego), who is carrying a bill to cement the Dynamex ruling’s classification test in law, dismissed Daniels’ argument as part of an effort by strip clubs to "to try and get an exemption for something that most people don’t think deserve one."
“Clearly there’s a lot in there that is basically pretending to be from the perspective of the dancer when it’s truly the perspective of the club owner," Gonzalez told POLITICO. “I didn’t think that was an honest discussion."
Disputes over stripper employment status have a long history. Déjà Vu spent years embroiled in a labor dispute with dancers who said clubs had violated wage and hour laws by incorrectly classifying them as independent contractors. A Michigan judge in 2017 approved a $6.5 million class action settlement, which the company appealed. A New York judge ruled in 2013 that dancers at a Manhattan club had been improperly classified as independent contractors and were due minimum wage.
"It’s been a prolific abuse of the law for clubs all across the country," said Jason J. Thompson, an attorney who has repeatedly sued Déjà Vu. While he acknowledged that some dancers meet the definition of independent contractors, "the vast majority of dancers do not line up with the Stormy Daniels experience: they are captive to one club, they are employees."
The new California labor standard has spurred more labor unrest. California Judge William D. Claster ruled last summer that the California Supreme Court’s standard applied retroactively to dancers at Imperial Showgirls in Anaheim who were suing over wages, subsequently ruling that they should be considered employees.
A representative of Déjà Vu, who gave his name only as Ryan in an email, said that “women should have the undisputed right to choose on their own how they want to be paid for selling their own nudity,” adding that dancers who are accustomed to taking cash home after working are flummoxed by seeing standard payroll withholding take a bite out of their earnings, noting that shifting labor classifications impose “significant costs” to clubs in taxes, benefits and transitioning to the new model.
“Effectively, they are earning the same percentage of total income as before in most cases, but more of it is actually going toward taxes and costs,” the spokesperson said.
The attorney representing the women in the Anaheim case, Shannon Liss-Riordan — a leading combatant in gig worker clashes who also led a class action misclassification lawsuit against Uber — argues otherwise. She is also representing dancers who are challenging Déjà Vu in California, saying in a complaint filed in San Diego last week that the company has engaged in "illegal retaliation" by reclassifying workers and cutting their wages “far beyond any amount that would be arguably justified to offset their increased costs in classifying the dancers as employees.”
“They didn’t need to slash their pay when they made them employees. What the dancers are unhappy about is many of them are walking out each night with hundreds of dollars less than they were making before,” Liss-Riordan told POLITICO.
Liss-Riordan argued that a common thread links disaffected Uber drivers and dancers demanding better pay.
“There are a lot of similarities between these cases and cases in other industries that we’ve been litigating,” she added. “Companies use the misclassification to reduce their labor costs, they use the misclassifications to shift expenses onto workers that employers usually bear.”