Scarlett's Cabaret Strip Club to Pay Dancers $6 Million in Settlement

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The owners of one of South Florida's most popular strip clubs have agreed to settle a big-time class-action lawsuit filed by former dancers over pay. The parent company that's behind Scarlett's Cabaret in Hallandale Beach as well as two other clubs agreed to fork over $6 million. That means more than 4,700 current and former dancers might be entitled to a payout. 

The suit was filed last August by a former Scarlett's dancer named Adonay Encarnacion. Scarlett's has three locations — Hallandale; Ybor City, Florida; and Toledo, Ohio — each owned and operated by a series of companies: J.W. Lee Inc., J.W. Lee Properties LLC, Ybor Operations LLC, and others. (Also: fans of Charlie Crist

The basis of Encarnacion's claim is that dancers at the club were incorrectly labeled "independent contractors" and not full-time employees. The claims, as summarized in court filings, were:

[T]hroughout the time period from December 2009 through February 2015, Plaintiffs received no hourly wage or salary from the Nightclubs based upon their classification as non-employees (colloquially termed “independent contractors”). In this case, Plaintiffs alleged that Defendants misclassified them as independent contractors, when they were actually employees, and as a result Defendants failed to pay them legally mandated minimum wages and/or overtime as required under the Fair Labor Standards Act (“FLSA”), the Florida Minimum Wage Act (“FLMWA”), and the Ohio Minimum Fair Wage Standards Act (“OMFWSA”).

By misclassifying their dancers, the clubs basically failed to pay them the minimum wage and overtime they were entitled to, the case claimed. 

Nine additional dancers ended up joining Encarnacion in the lawsuit. In February, the two sides came together for a 12-hour mediation session in the offices of a Fort Lauderdale law firm. It took two additional half-day sessions to hammer out a deal. Under the agreed-upon settlement, the Scarlett's side still maintained that dancers were not misclassified and that the fees the dancers took home from sweaty clients were "service charges" that "upon a reclassification, would be the lawful property of the Nightclubs and that could then be used, in whole or in part, to satisfy any wage claims found to be owned." 

Still, under the settlement, the club will offer the $6 million to the qualifying dancers who worked during the 2009 to 2015 period. That money will also go toward paying lawyers' fees. 

The settlement was filed Friday in Florida federal court and still must be approved by a judge. 

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