Exotic dancers ruled as employees in Topeka decision

The Kansas Department of Labor won a victory for strippers when the state Supreme Court ruled that exotic dancers are employees of the club where they work, not independent entertainment contractors.

But while the case was primarily about employment benefits, the Labor Department’s arguments offered a rare behind-the-scenes look at the operation of strip clubs and the conditions under which performers perform.

The decision in the case of Milano’s v. Kansas Department of Labor Contributions Unit ends a 7-year legal battle over the employment status of semi-nude female dancers at Club Orleans, a Topeka gentlemen’s club.

The case went to court after a former dancer at the club filed an unemployment claim in 2005. The decision issued Friday means the dancers are eligible for state unemployment benefits if they’re laid off and the club has to contribute to the state fund that pays the benefits, according to court records.

Department of Labor officials declined comment, but in court papers, they said: “Club Orleans’ main attraction is semi-nude female dancers. The dancers are integral to the club’s financial success because, without the dancers, nothing distinguishes Club Orleans from any other food and drink establishment.

“The proof of the extent of the dancers’ integration into Club Orleans business is shown by billboards exhibiting the pictures of dancers, pictures of dancers on the outside of the club’s building, and newspaper advertisements with pictures of dancers and promotions involving dancers.”

This weekend, the club hosted a football-themed promotion called “Stripper Bowl VI.”

Court papers described the working conditions inside the club.

Club owner John Samples bought the majority ownership in Club Orleans in 2002. Two years later, he stopped paying the dancers a nominal salary, leaving tips from customers as their only source of income, according to court records. The court decision doesn’t require the club to pay the dancers a salary, because tips can be considered as wages under Kansas law.

According to the Labor Department, dancers were required to pay non-negotiable “rent” for use of the stage and dressing rooms, as well as extra fees for the disc jockeys and bouncers.

The rent was higher during peak business hours and the women paid extra to use the more private “VIP” and “Champagne” rooms to entertain guests.

House rules governed what the dancers could do in their shows and the prices they had to charge for specific types of dances. Employees of the club would enforce the price structure on the dancers and the customers, court records said.

The women were required to sign in with the bouncer at the beginning of a shift and weren’t allowed to leave the premises until the end of the shift, according to the Labor Department.

“While Milano’s claims one reason for this is to prevent prostitution … it is reasonable to conclude that this restriction of the dancers’ movement is to ensure that the dancers mingle with the club’s customers between their dance rotations to encourage customers to purchase drinks and food,” a Labor Department filing said. “Milano’s rules go as far as mandating that the dancers cannot refuse a customer’s offer to purchase the dancer a beverage.”

The Supreme Court upheld decisions by the Labor Department and two lower courts, ruling that that the control that management exercised over the women’s activities requires them to be classified as employees instead of independent contractors.

“Ample substantial competent evidence in the record before us … demonstrates that Milano’s possessed such a right of control over the dancers at Club Orleans,” the court opinion said. “Most telling, the house set various rules, and dancers’ violations of those rules were punishable by fines and termination.”

Club owner John Samples could not be reached for comment, but has previously said he was fighting the case to the state’s highest court as a matter of principle.

Samples had argued that the dancers weren’t employees because they were paid directly by the individual patrons of the club, not the club itself. He said the club just provided an atmosphere for them to entertain.

He has said his employees did not force customers to pay the standard rates for dances, but would simply ask a customer to leave and not return if the customer didn’t follow the price rules. He also said the dancers decided among themselves how to divide up stage time.

Club Orleans substantially changed its business model last year after merging with Baby Dolls, another Topeka-area strip club.

While it still offers exotic dancing, Club Orleans was recast as a bring-your-own-bottle “after hours” club, open from 2 a.m. when the regular bars close until 5 a.m. on Saturdays and Sundays.