A federal judge is making it rain at one Midtown strip club by awarding more than $10 million to dancers.
In a ruling issued Friday, Manhattan Federal Court Judge Paul Engelmayer found that the dozens of dancers at Rick’s Cabaret had been stripped of cash they should have been allowed to pocket — and ordered the club to pay up.
A group of entertainers from the Midtown mammary mecca had filed a class-action lawsuit against the club in 2009, charging they were employees who the club should have been paying minimum wage.
The suit said that not only had the club not been paying them, it had been charging them to work there – forcing them to turn over $60 per shift.
It also collected $2 of every $20 “Dance Dollar” customers bought with their credit cards to tip the temptresses — money they believed was going directly to the dancers, the suit said.
The W. 33rd St. club had argued the salary should be offset by the dancers’ “performance fees,” which included the $20 “for each personal dance — i.e. a lap dance or table dance” or time “in one of the club’s semi-private rooms,” which cost $100 for 15 minutes, $200 for 30 minutes, or $400 an hour.
Engelmayer didn’t buy that argument, noting that was cash paid to the dancers directly from the customers, and because the club would also collect a separate service fee for the rooms.
In his 51-page ruling, he took aim at the club’s “Dance Dollar” policies.
If the customer paid cash to the dancers, he noted, the dancers would get to keep 100% of the money, but if they paid by credit card and bought “Dance Dollars” for the tips, the club would keep $2 of ever $20, in addition to charging the customers a $4 fee.
In his ruling, the judge said that was misleading, because customers would think the dancers were getting the full $20.
A “reasonable customer would have understood the performance fees which customers paid dancers as gratuities belonging to particular dancers, not as service charges belonging to the club,” he found.
He ordered the club to pay $10.8 million in damages for minimum wage violations and improperly retaining tips — and the club could be on the hook for millions more at trial, which is where the dancers’ complaints about paying $60 a shift will be aired.
The club maintains the dancers weren’t required to pay the cash.
It’s unclear how many dancers will split the judgment — about 50 dancers are plaintiffs in the case, but 1,900 entertainers worked at the club between 2005 and 2012, the years covered by the complaint.
Lawyers for the dancers did immediately return calls for comment.
In a statement, a rep for Rick’s parent company, RCI Hospitality, said it was “disappointed” with the “flawed” decision and planned to appeal once the entire case is over.
The statement also said “there is no current or near term obligation to pay any sums as a result of this decision” since the case is ongoing.
Rick’s has said it’s appealing an earlier ruling by the judge that found the dancers were employees and not independent contractors.