After a lengthy court battle, dancers at a gentleman's club in Topeka have finally won the right to be called employees--and therefore qualify for unemployment benefits.
On February 4, the Kansas Supreme Court handed down its opinion in the case of Milano’s v. Kansas Department of Labor Contributions Unit. The court ruled in favor of the Kansas Department of Labor, stating that owners of gentleman's clubs must contribute to the state unemployment benefit fund and, if they are laid off from those clubs, the dancers will be eligible to receive benefits out of that fund. This ruling comes nearly seven years after a dancer at a Topeka club originally filed for unemployment benefits but was denied. The club, known as Club Orleans, considered the dancers to be independent contractors and therefore did not contribute in the unemployment benefit fund. As a result, when the dancer was laid off from the club, she was not eligible for benefits.
Two key issues seemed to sway the Kansas Supreme Court in favor of the Department of Labor (and the dancers). First, the court considered the "integration" of the dancers in the "financial success" of the club.[11] A document filed with the court by the Department of Labor stated: "[w]ithout the dancers, nothing distinguishes Club Orleans from any other food and drink establishment."[11] The dancers' images are used in wide-spread marketing campaigns in the area and can be found on billboards, flyers, magazines, etc.
Second, the court opinion focused on the topic of control in the workplace. Traditionally, these dancers have been considered independent contractors, meaning they work at the club by a written contract or verbal agreement with the owner or manager of the club. The existence of an independent contractor relationship depends on control. If the club controls the dancer's activities and working conditions as an employer would, the dancer looks more like an employee and less like an at-arms-length independent contractor.
The opinion states dancers must rent stage and dressing room space, as well as help pay the D.J. and bouncers.[11] The club also dictates how much dancers can charge for special events. Additionally, the dancers must seemingly clock in and out with a bouncer when they come to work. Yet, the dancers receive no salary from the club, though they did at one time. Now their only compensation is the tips they receive nightly from patrons. Despite this, the court found enough facts that, when taken together, show the club wields a measure of control over the dancers which looks like more like that of an employer and less like the principal in a contract-based relationship.
As a result of this ruling, the club at the heart of this dispute and others like it must now begin viewing their dancers as employees and offer them benefits as such. |