Appeals court rules against the Brass Pole, says exotic dancers are employees, not independent contractors

CLEVELAND — A federal appeals court has ruled that an Elyria business known as the Brass Pole should have paid two exotic dancers as employees, not independent contractors who worked solely for customers' tips. The 6th U.S. Circuit Court of Appeals on Tuesday upheld a federal judge's decision that says the women, Jamie Gilbo and Alyssa Smith, each deserve more than $17,000 in damages. The women sued the club owners last year in U.S. District Court in Cleveland, claiming the Elyria business broke the Fair Labor Standards Act and state law by failing to pay them minimum wage in addition to their tips. In February, U.S. District Judge James Gwin of the Northern District of Ohio ruled in favor of the women, based on several factors. The Brass Pole did not pay the women anything, but it did pay others at the club, such as bartenders, managers, disc jockeys and bouncers. In fact, the women, who danced semi-nude, had to pay the business back a portion of their tips, records show. Gwin's order said each dancer had to pay $20 back to the business for the first private dance each night. "This 'leasing space' charge decreases to $5 for each additional dance," Gwin said. In court documents, the women claimed the owners told them to work six-hour shifts at the club and that the business' staff supervised their work. They said they needed to work during the week before working weekends when it was the busiest. The appellate panel of David McKeague, Richard Allen Griffin and John Bush agreed with Gwin about the women's importance to the business, a critical factor in determining whether they were employees. "The services provided by exotic dancers like Gilbo and Smith are the integral component of Brass Pole," the appeals judges wrote. "While Brass Pole calls itself a bar and grill, it has no kitchen and instead sometimes serves precooked microwavable burgers, Hot Pockets and pizza from Sam's Club. In analyzing this factor, other courts have asked whether the business could not function without the services its workers provide. Here, Brass Pole could not function without the services of its dancers." Kevin M. McDermott II, one of the women's attorneys, said they deserved employee classification. "This club was simply not exempt from paying minimum wages to the dancers, notwithstanding the independent contractor misclassification scheme designed to circumvent long-established minimum-wage law," McDermottsaid. Gilbo worked at the establishment from August 2018 to the following March. Smith worked there for nearly a year, ending in June 2019. Stephen Hanudel, an attorney representing the business, said he believed Gwin's decision was premature. "We thought this should go to trial," he said. He claimed the business' owner, Harley Rowe, tried to avoid restricting the dancers, as employers would. He said customers paid the dancers directly, and Rowe did not keep track of their hours. Rowe also never hired the dancers, but the club screened them before allowing them on stage. Hanudel said Rowe also sought to make necessary adjustments from similar litigation the club faced in 2016. That's when two other former dancers sued the Brass Pole, claiming they should be classified as employees, not independent contractors. U.S. District Judge Patricia Gaughan ruled in favor of the women. That ruling was limited to those two dancers, and the appeals court said the Brass Pole did not change its practices in the case of Gilbo and Smith. Hanudel said he and Rowe are reviewing possible options. ___ (c)2020 The Plain Dealer, Cleveland Visit The Plain Dealer, Cleveland at www.cleveland.com Distributed by Tribune Content Agency, LLC.