Admitted Pro Hac Vice - Nichols Kaster, PLLP

NICHOLS KASTER, PLLP
Donald H. Nichols (DN 0689)
Michele R. Fisher (MF 4600)
Steven Andrew Smith, MN Bar No. 260836
(Admitted Pro Hac Vice)
E. Michelle Drake, MN Bar No. 0387366
(Admitted Pro Hac Vice)
Anna P. Prakash, MN BarNo. 0351362
(Admitted Pro Hac Vice)
4600 IDS Center, 80 South Eighth Street
Minneapolis, MN 55402
Telephone: (612) 256-3200
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
SABRlNA HART and REKA FUREDI
on behalf of themselves and all
others similarly situated, and the Proposed
New York Rule 23 Class,
Plaintiffs,
vs.
RICK'S CABARET INTERNATIONAL INC.,
RCI ENTERTAINMENT (NEW YORK) INC.,
PEREGRINE ENTERPRISES, INC.,
Defendants.
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Case No. 09-CV-3043 JGKlTHK
) THIRD AMENDED CLASS ACTION
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COLLECTIVE ACTION
)
COMPLAINT
TRIAL
DEMANDED)
)
(JURY
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Plaintiffs Sabrina Hart and Reka Furedi ("Plaintiffs"), on behalf of themselves and all
others similarly situated, and on behalf of the members of the proposed New York Rule 23 Class,
upon personal knowledge as to themselves and upon information and belief as to other matters,
by and through their attomeys, for their Complaint against Defendants and Rick's Cabaret
Intemational Inc., RCI Entertainment (New York) Inc. and Peregrine Enterprises, Inc.
("Defendants"), allege as follows:
PRELIMINARY STATEMENT
1.
This case is about Defendant RCI Entertainment (New York) Inc. and its parent
company, Defendant Rick's Cabaret lnternational Inc., operating in New York as Peregrine
Enterprises, Inc., an adult nightclub in New York City where Defendants willfully refuse to pay a
minimum wage; unlawfully request, demand, and receive wages from employees; unlawfully
demand and accept gratuities and retain a part of gratuities or charges purported to be gratuities;
and unlawfully deduct employee wages through fines and penalties for lateness and misconduct
Such actions have been taken with respect to Plaintiff Sabrina Hart (''Hart''), Plaintiff Reka
Furedi ("Furedi") and those similarly situated and members of the New York Rule 23 Class.
2,
Defendant Rick's
Cabaret International
Inc.
also owns
and
operates
approximately 18 other adult entertainment nightclubs around the country, each representing to
the public, as does the club also operated by Defendants Peregrine Enterprises, Inc. and RCI
Entertainment (New York), that they are part of the Rick's Cabaret chain of adult entertainment
clubs. Indeed, as the chief executive officer ("CEO") of Defendant Rick's Cabaret International
Inc. has stated, its clubs around the country are part of national brand where, at each club,
"everything is the same throughout our venues, just as they'd be with Hooters or Mclfonald's."
3.
Plaintiffs Sabrina Hart and Reka Furedi on behalf of themselves and other
similarly situated current and former entertainers of Defendants RCI Entertainment (New York)
Inc. Rick's Cabaret International Inc. and Peregrine Enterprises, Inc., bring this Nationwide
Collective action against Defendant Rick's Cabaret International Inc, under the Fair Labor
Standards Act, 29 U.S.C. § 201, et. seq.. ("FLSA") for failure to pay a minimum wage.
4.
Plaintiffs Sabrina Hart and Reka Furedi, as Class Representatives ("Class
Representatives") bring this New York Rule 23 Class Action on behalf of themselves and all
2
members of the proposed New York Rule 23 Class against Defendants Rick's Cabaret
International Inc., RCI Entertainment (New York) Inc. and Peregrine Enterprises, Inc. pursuant
to Rule 23 of the Federal Rules of Civil Procedure, to remedy violations of New York state law,
including but not limited to New York Labor Laws § 190, et. seq. and § 650, et. seq., and the
supporting New York State Department of Labor Regulations, N.Y. Compo Codes R. & Regs. tit.
12, § 137-1.1., et. seq.
5.
Defendants have willfully engaged in a pattern, policy, and practice of unlawful
conduct for the actions alleged in this Complaint, in violation of the federal and state rights of the
Plaintiff, similarly situated individuals, and members of the proposed New York Rule 23 Class.
THE PARTIES
PLAINTIFFS
6.
Plaintiff Sabrina Hart is an adult individual who is a resident of Florida.
7.
Plaintiff Hart has consented in writing to be a party to the FLSA claims in this
action pursuant to 29 U.S.C. § 216(b). Plaintiff Hart's signed consent form was filed with the
Court on April 1,2009.
8.
Plaintiff Hart worked as an entertainer at the Rick's Cabaret location in New York
from approximately June 10,2006 to approximately September 15, 2007.
9.
PlaintiffReka Furedi is an adult individual who is a resident of New York.
10.
Plaintiff Furedi has consented in writing to be a party to the FLSA claims in this
action pursuant to 29 V.S.c. § 2l6(b). Plaintiff Furedi's signed consent form was filed with the
Court on June 16, 2009.
11.
Plaintiff Furedi worked as an entertainer at the Rick's Cabaret location in New
York from approximately November 10, 2006 to April 14, 2007.
3
12.
As detailed below, Plaintiffs Hart, Furedi and others similarly situated are current
and former employees of Defendants Rick's Cabaret International Inc., RCI Entertainment (New
York) Inc. and Peregrine Enterprises, Inc. within the meaning of the FLSA, 29 U.S.C. §
203(e)(1).
13.
As detailed below, Plaintiffs Hart, Furedi and members of the New York Rule 23
Class are current and former employees of Defendants Rick's Cabaret International Inc., ReI
Entertainment (New York) Inc. and Peregrine Enterprises, Inc. within the meaning ofN.Y. Lab.
Laws §§ 651(5) and 190.
PROPOSED COLLECTIVE AND CLASS DEFINITIONS
14.
The New York Rule 23 Class is defmed as: "all persons who worked at Rick's
New York or were employed by Defendant Rick's Cabaret International Inc., RCI Entertainment
(New York) Inc. and/or Peregrine Enterprises, Inc. in the state of New York as 'entertainers' at
any time six years prior to the filing of this Complaint to the entry ofjudgment in the case."
15.
The Nationwide FLSA Collective is defined as "all persons who worked as
'entertainers' at any adult entertainment nightclub owned by Defendant Rick's Cabaret
International Inc. or a subsidiary of Defendant Rick's Cabaret International Inc. at any time three
years prior to the filing of this Complaint to the entry ofjudgment in this case."
DEFENDANTS
16.
Defendant Peregrine Enterprises, Inc. is a domestic corporation of New York, and
maintains an office at 50 West 33d Street, New York, New York as well as an office in Houston,
Texas.
17.
Defendant Peregrine Enterprises, Inc. is a wholly owned subsidiary of Defendant
RCI Entertainment (New York).
4
18.
Defendant RCI Entertainment (New York) Inc. is a domestic corporation with its
headquarters in New York City, New York.
19.
Defendant ReI Entertainment (New York) Inc. is a wholly owned subsidiary of
Defendant Rick's Cabaret International, Inc.
20.
Defendant Rick's Cabaret International, Inc. is a foreign corporation with its
headquarters in Houston, Texas and is the parent company of Defendant RCI Entertainment
(New York), Inc.
2L
All three Defendants jointly own and operate Rick's Cabaret in New York City,
New York.
22..
As detailed below, Defendants Rick's Cabaret International, Inc.,
RCI
Entertainment (New York) Inc. and Peregrine Enterprises, Inc. are or were the employers of
Plaintiffs, the Nationwide FLSA Collective and the New York Rule 23 Class under the FLSA, 29
U.S.C. § 201, et. seq., and New York Labor Laws § 650, et. seq., and § 190, et. seq., and the
supporting New York State Department of Labor Regulations, N.Y. Compo Codes R. & Regs. tit.
12, § 137-1.1., et. seq.
23.
As detailed below, Defendants Rick's Cabaret International, Inc.,
RCI
Entertainment (New York) Inc. and Peregrine Enterprises, Inc. are Plaintiffs' employers in the
restaurant industry under New York Labor Laws and the supporting New York State Department
of Labor Regulations, including but not limited N.Y. Compo Codes R. & Regs. tit. 12, § 137-3.1.
24.
Defendants Rick's Cabaret International, Inc., RCI Entertainment (New York)
Inc. and Peregrine Enterprises, Inc. employed Plaintiffs Hart, Furedi, similarly situated
individuals, and members of the New York Rule 23 Class at all times relevant to this Complaint.
5
JURISDICTION AND VENUE
25.
This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1332
and jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367.
26.
This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because
this action involves a federal question, 29 u.S.C. § 216(b).
27.
This Court has subject matter jurisdiction pursuant to 28 U.S.c. § 1332(d)
because this action is a class action with an amount in controversy over $5,000,000, exclusive of
interest and costs and at least one member from the plaintiff class is a citizen of a State different
from at least one Defendant.
28.
Venue in the Southern District of New York is proper pursuant to 28 U.S.C. §
1391 because Defendant RCI Entertainment (New York) Inc. resides in this District, Defendant
Rick's Cabaret International Inc. is subject to personal jurisdiction in this District, and Defendant
Peregrine Enterprises, Inc. resides in this District.
Venue in the Southern District of New York is also proper because a substantial part of the
events or omissions giving rise to the claim occurred in the Southern District of New York,
FACTUAL ALLEGATIONS
I.
FACTS ESTABLISHING EACH DEFENDANT IS A COVERED ENTITY
UNDER FEDERAL AND NEW_YORK LAW
29.
Plaintiffs Hart and Furedi, on behalf of themselves and all others similarly
situated, and the proposed New York Rule 23 Class re-allege and incorporate by reference the
above paragraphs as set forth herein.
30.
Each Defendant's annual gross volume of sales made or business done is not less
than $500,000. Defendants also all operate in interstate commerce, by selling liquor at their
6
clubs which has traveled in interstate commerce. Moreover because of Defendants' interrelated
activities, they function in interstate commerce.
31.
Though not the primary purpose of their business, Defendants engage in
restaurant operations at their New York club by serving food and beverage to their patrons.
Defendants Rick's Cabaret International, Inc., RCI Entertainment (New York) Inc. and Peregrine
Enterprises, Inc. are Plaintiffs' employers in the restaurant industry under New York Labor Laws
and the supporting New York State Department of Labor Regulations, including but not limited
N.Y. Compo Codes R. & Regs. tit. 12, § 137-3.1.
32.
The minimum wage provisions of the N.Y. Lab. Laws, § 650, et. seq., and the
supporting New York State Department of Labor Regulations, KY. Compo Codes R. & Regs. tit.
12, § 137-1.1., et. seq., apply to Defendants Rick's Cabaret International Inc., ReI Entertainment
(New York)
me.
and Peregrine Enterprises, Inc. and protect the Class Representatives and
members of the New York Rule 23 Class because, for reasons set forth herein, Defendants
constitute employers under New York's minimum wage law and Plaintiffs constitute employees.
TI.
FACTS ESTABLISmNG EACH DEFENDANT IS AN "EMPLOYER" UNDER
FEDERAL AND NEW YORK LAW
A.
Rick's Cabaret International, Inc.
33.
Plaintiffs Hart and Furedi, on behalf of themselves and all others similarly
situated, and the proposed New York Rule 23 Class re-allege and incorporate by reference the
above paragraphs as set forth herein.
34.
Throughout the class period Defendant Rick's Cabaret International, Inc. has
owned and operated approximately 19 adult entertainment clubs around the country.
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35.
Each club is a wholly owned subsidiary of Defendant Rick's Cabaret
International, Inc. or is a subsidiary of one or Defendant Rick's Cabaret International, Inc.'s
other subsidiaries.
36.
Defendant Rick's Cabaret International Inc.'s CEO is Eric Langan.
37.
Eric Langan is also the president of each of the subsidiaries owned by Defendant
Rick's Cabaret International Inc., including Defendants Peregrine Enterprises, Inc. and RCI
Entertainment (New York),
38.
None of Defendant Rick's Cabaret International Inc.'s wholly-owned subsidiaries
have any corporate officers other than Mr. Langan.
39.
Defendant Rick's Cabaret International Inc.'s wholly owned subsidiaries function
as Defendant Rick's Cabaret International Inc.'s assets.
40.
If there is a problem with an underperforming subsidiary, Mr. Langan addresses
the problem himselfby reaching out to the subsidiary's management team that reports directly to
him.
41.
Defendant Rick's Cabaret International Inc. employs several individuals whose
title is "regional manager."
42.
The regional managers' recerve paychecks and employment benefits from
Defendant Rick's Cabaret International Inc.
43.
Each regional manager is responsible for overseeing the operations of a group of
subsidiary clubs around the country.
44.
The regional managers were hired as regional managers by Mr. Langan.
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45.
Each subsidiary club also has a general manager or general managers that are
hired by and report to both Defendant Rick's Cabaret International, Inc.'s regional managers and
to Mr. Langan.
46.
Defendant Rick's Cabaret International, Inc. wields control over the classification
of members of the putative nationwide collective and Rule 23 Class, stating in its most recent 10K filing, "[A[s of September 30, 2009, we had independent contractor relationships with
approximately 2,500 entertainers... "
47.
Mr. Langan made a single decision to adopt a uniform policy of categorizing
entertainers outside of Minnesota as independent contractors. As described in Section V below,
this decision resulted in entertainers at each of Defendants' clubs outside of Minnesota, including
New York, being paid no amounts which count as wages under federal law.
48.
Acting through the clubs' regional and general managers, Defendant Rick's
Cabaret International, Inc. supervises entertainers by distributing and ensuring the enforcement
of various rules and guidelines which are enforced by imposing fmes and other discipline on
entertainers.
49.
Some examples of the rules which have been enforced at more than one of Rell's
clubs are rules which:
a.
Require that entertainers are required to cover all tattoos while on stage;
b.
Require that entertainers must pay shift fees prior to beginning to work;
c.
Require that entertainers were shoes with heels of a certain height;
d.
Require that entertainers use a different bathroom than club patrons;
e.
Require that entertainers dance on stage;
f.
Require that entertainers not chew gum while working; and
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g.
Require that entertainers schedule their shifts in advance, and pay a fine if they do
not come to work when scheduled.
50.
Regional managers are also responsible for making sure there are enough
entertainers and other employees scheduled to work at the clubs on nights that heavy customer
turnout is expected.
51.
Because they are supervised by and ultimately report to Rick's Cabaret
International, Inc., the clubs' general managers are agents of the parent company Defendant
Rick's Cabaret International, Inc.
52.
Defendant Rick's Cabaret International, Inc. also posts information on job
openings at each of the clubs on its website- including positions available for entertainers.
Defendant Rick's Cabaret International, Inc. 's website specifies the hiring criteria which apply to
entertainers. The website is organized such that an individual need not go to a particular club's
webpage to find job openings; rather, information on hiring is directly available on Defendant
Rick's Cabaret International, Inc.' s website.
53.
Defendant Rick's Cabaret International, Inc.'s IO-K filings demonstrate that the
subsidiaries have uniform hiring standards: (1) Rick's Cabaret International, Inc. "employ]s]
chefs with restaurant experience"; (2) its "policy is to maintain high standards for both personal
appearance and personality for the entertainers and waitresses" it hires; (3) "prefer]s] that the
performers [it] hires be experienced entertainers"; and (4) "recruit]s] staff [from the adult
entertainment and restaurant industry] in the belief that management with experience in the
sector adds to [its] ability to grow and attract quality entertainers."
54.
Defendant Rick's Cabaret International, Inc., through a point of sale database
used at each of its clubs ("Clubtrax"), has access to and maintains files on Plaintiffs Hart, Furedi,
10
those similarly situated, and members of the proposed New York Rule 23 Class. The files
contain the entertainers' names and contact information, as well as log-in and log-out
information, records of dance dollar exchanges, and fines and fees charged and paid or not paid.
55.
Defendant Rick's Cabaret International, Inc. directly through its CEO andior its
regional managers, set the amount of the house fee that entertainers are required to pay in order
to work.
56.
Defendant Rick's Cabaret International, Inc.'s regional managers set the amount
of the house fees charged at Defendants' New York club.
57.
Regional managers employed by RCII participate in supervising and evaluation
clubs' general managers, ensure that the Clubtrax system is functioning properly, and assist
general managers when they have questions or concerns about day to day club operations.
B.
ReI Entertainment (New York)
58.
Plaintiffs Hart and Furedi, on behalf of themselves and all others similarly
situated, and the proposed New York Rule 23 Class re-allege and incorporate by reference the
above paragraphs as set forth herein.
59.
Defendant RCI Entertainment (New York) functions as a holding company for
Defendant Peregrine Enterprises, Inc.
60.
Eric Langan is president and sole officer of Defendant RCI Entertainment (New
York) and is responsible for hiring regional managers that supervise and direct entertainers'
work at Defendants' New York Club..
61.
The regional and general managers that supervise and direct entertainers' work at
Defendants' New York Club ultimately report to Eric Langan, who is the president and sole
officer of Defendant RCI Entertainment (New York).
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62.
The general managers of the club are directly responsible for hiring and firing
entertainers, for disciplining them, and for enforcing the entertainer guidelines.
63.
Through Defendant RCI Entertainment (New York), Defendant Rick's Cabaret
International, Inc. is also able to send and receive funds, materials, and resources to be used at
Defendants' New York Club. This includes but is not limited to sales of dance dollars (which
are described below) and resources or materials for maintenance, refurbishing, and advertising.
64.
Defendant RCI Entertainment, Inc. (New York), through the Clubtrax system, has
access to and maintains fIles on Plaintiffs Hart, Furedi and members of the proposed New York
Rule 23 Class. The files contain the entertainers' names and contact information, as well as login and log-out information, records of dance dollar exchanges, and fines and fees charged and
paid or not paid.
65.
In 2005, Defendant RCI Entertainment (New York) acquired 100% of all
outstanding shares of the stock of Defendant Peregrine Enterprises. Defendant RCI
Entertainment (New York) continues to own 100% of all outstanding shares of the stock of
Defendant Peregrine Enterprises.
C.
Peregrine Enterprises, Inc.
66.
Plaintiffs Hart and Furedi, on behalf of themselves and all others similarly
situated, and the proposed New York Rule 23 Class, re-allege and incorporate by reference the
above paragraphs as set forth herein.
67.
Defendant Peregrine Enterprises, Inc. employs general managers to work at
Defendants' New York Club.
The general managers are directly employed by Defendant
Peregrine Enterprises, Inc. and receive paychecks and W-2 forms from Peregrine Enterprises,
Inc.
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68.
The general managers of the club are directly responsible for hiring and firing
entertainers, for disciplining them, and for enforcing the entertainer guidelines detailed in
Sections II(A) and (B).
69.
Other employees and agents of Defendant Peregrine Enterprises, Inc. including
but not limited to disc jockeys, house morns, and cashiers, are also responsible for enforcing the
various rules and regulations which apply to entertainers and are detailed in Sections II (A) and
(B).
70.
Defendant Peregrine Enterprises, Inc. issues paychecks and W-2 forms to
waitresses, bartenders, and other staff members categorized as employees at Rick's New York
location.
71.
Defendant Peregrine Enterprises, Inc., through the Clubtrax system, maintains
files on Plaintiffs Hart, Furedi and members of the proposed New York Rule 23 Class. The files
contain the entertainers' names and contact information, as well as log-in and log-out
information, records of dance dollar exchanges, and fines and fees charged and paid or not paid.
ill.
FACTS ESTABLISIDNG DEFENDANTS OPERATE AS AN INTEGRATED
ENTERPRISE
72.
Plaintiffs Hart and Furedi, on behalf of themselves and all others similarly
situated, and the proposed New York Rule 23 Class re-allege and incorporate by reference the
above paragraphs as set forth herein.
73.
The president and sale officer of Defendant Peregrine Enterprises, Inc., Eric
Langan, is the same person who hires the regional managers that supervise the general managers
and, together with the general managers, supervise and direct entertainers' work at Defendants'
New York Club. The general managers employed by Defendant Peregrine Enterprises, Inc.
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ultimately report the person who is the president and sole officer of Defendant Peregrine
Enterprises, Inc.
74.
Together, as detailed herein, Defendants run a highly integrated operation in
which the employees of Defendant Rick's Cabaret International, Inc. wield all the operational
control over the lower level employees categorized as working for RCI Entertainment (New
York) Inc. and Peregrine Enterprises, Inc. and Defendant Rick's Cabaret International, Inc.'s
other subsidiaries.
75.
The various subsidiaries operated by Rick's Cabaret International, Inc. share
information and have similar policies with respect to what entertainers are and are not allowed to
do while they are at work.
76.
For example, the guidelines governing entertainer conduct at Defendants' New
York club are based off of guidelines sent to New York from one of Defendant Rick's Cabaret
International, Inc.'s Houston subsidiaries.
77.
Additionally, the subsidiaries have and may pool purchasing power, borrow
money from Defendant Rick's Cabaret International, Inc. for remodeling or other efforts or
borrow money from each other.
78.
Defendant Rick's Cabaret International, Inc. employs a full time accounting staff
who keep the books for all of the clubs owned by Rick's Cabaret International, Inc., does payroll
for all of the clubs, controlling and supervising the on-site bookkeeping which takes place at the
club.
The nightclubs operated by Rick's Cabaret International, Inc. all share a central
bookkeeping staff who are located in Texas at Rick's Cabaret International, Inc.'s corporate
headquarters.
14
79.
Each subsidiary club also sends Defendant Rick's Cabaret International, Inc. raw
sales data on a daily basis, including data on sales of dance dollars. Paperwork is standardized
and sent from Rick's Cabaret International, Inc. to the clubs to assist with this daily information
flow, ultimately resulting in a consolidated income statement for Defendants and the other
subsidiary clubs.
80.
The subsidiary clubs also all advertise on Defendant Rick's Cabaret International,
In.C.'S website. In fact, the Rick's Cabaret International, Inc.'s regional managers manage the
clubs' advertising, with the individual clubs routinely making requests to Rick's Cabaret
International, Inc. for promotional or other graphics.
81.
Defendant Rick's Cabaret International, Inc.' s various subsidiary clubs, including
the New York club, share more than just entertainer guidelines and a common scheme of
categorizing entertainers as independent contractors.
82.
In fact, each of the subsidiaries and Defendant Rick's Cabaret International, Inc.
also use the same electronic point of sale system, with Defendant Rick's Cabaret International,
Inc. having the ability to access sales info for each of the clubs through this system. Entertainer
files containing personnel information on Plaintiffs, those similarly situated and the putative
Rule 23 class is electronically stored in this electronic database.
83.
The subsidiary clubs, including the New York club operated by Defendants
Peregrine Enterprises, Inc. and RCI Entertainment (New York), also have webpages that are all
linked to Defendant Rick's Cabaret International, Inc.'s website, which bears Defendant Rick's
Cabaret International, Inc.' s copyright.
84.
Defendant Rick's Cabaret International, Inc.'s decision to classify entertainers at
each of the clubs is enforced by Defendant Rick's Cabaret International, Inc. through its regional
15
managers and carried out at the subsidiary level through general managers that, like the regional
manager, all report to Defendant Rick's Cabaret International, Inc.'s CEO.
85.
As discussed below, Defendants distribute 1099 forms to entertainers at the club
level. Defendant Rick's Cabaret International, Inc. can and does step in to coordinate efforts
through printing, stamping, or mailing the forms if necessary.
86.
In January, 2005 the former owners of Peregrine entered into a five-year covenant
not to compete with Defendants Peregrine, RCI (Entertainment New York) or Rick's Cabaret
International, Inc.. The non-compete contract was negotiated with the same lawyers acting on
behalf of Defendants RCI Entertainment (New York), Rick's Cabaret International, Inc. and the
then recently-acquired Peregrine Enterprises, Inc.
87.
In this litigation and in past litigation involving claims of independent contractor
misclassification, all three Defendants have been represented by the same counsel. In other
litigation involving Defendant Rick's Cabaret International, Inc. and its subsidiary New York
club, Defendant Rick's Cabaret International, Inc. and the subsidiary club have been represented
by the same counsel.
88.
Defendants RCI Entertainment (New York) and Rick's Cabaret International, Inc.
and Peregrine Enterprises share office space in Texas. Defendant Peregrine Enterprises, Inc. has
identified the following address to the New York Secretary of State as the location of its
"Principal Executive Office": 10959 Cutten Rd Houston, Texas, 77066.
Defendant Rick's
Cabaret International, Inc. identified the same address as its business address in its corporate
filings with the Texas Secretary of State and its filings with the Securities and Exchange
Commission. This is also the same address used by many of Defendant Rick's Cabaret
International, Inc.'s wholly owned Texas subsidiaries.
16
89.
Various trademarks used by the subsidiary clubs, including the Rick's design
logo, and the phrases "Rick's Cabaret", "Club Onyx" and "XTC Cabaret" are registered through
service mark registrations issued to Defendant Rick's Cabaret International, Inc. by the United
States Patent and Trademark Office. These trademarks are used by the subsidiary clubs.
90.
Eric Langan's daughter, Ashley Langan was employed at Rick's New York
location where she worked in the "cage" and was in charge of, among other things, dispensing
cash in exchange for dance dollars.
IV.
FACTS ESTABLISHING ALL DEFENDANTS OPERATE AS ~ JOINT
EMPLOYER OF PLAINTIFFS AND THAT PLAINTIFFS, THOSE SIMILARLY
SITUATED, AND MEMBERS OF THE PROPOSED NEW YORK. RULE 23
CLASS ARE EMPLOYEES OF DEFENDANTS AND NOT INDEPENDENT
CONTRACTORS
91.
Plaintiffs Hart and Furedi, on behalf of themselves and all others similarly
situated, and the proposed New York Rule 23 Class re-allege and incorporate by reference the
above paragraphs as set forth herein.
92.
Plaintiffs Hart, Furedi, others similarly situated, and members of the New York
Rule 23 Class and nationwide FLSA collective have all been improperly classified by
Defendants as independent contractors. In actuality, they are employees.
93.
Defendants classify all their workers who are employed as entertainers outside the
state of Minnesota as independent contractors. However, entertainers in Minnesota, who are
classified as employees have largely the same job duties as entertainers in the rest ofthe country,
who are classified as independent contractors.
94.
Defendants exercised a great degree of control over Plaintiffs Hart, Furedi, those
similarly situated, and members of the proposed New York Rule 23 Class. This control was
17
exhibited, in part, through enforcement of the "Entertainer Guidelines" which were periodically
published at Defendants' locations.
95.
The primary job duties of Plaintiffs Hart and Furedi, those similarly situated, and
the proposed New York Rule 23 Class consisted of dancing on stage during the stage rotation,
performing personal dances (also called "lap dances" or ''private dances") for customers, and
spending time with customers in semi-private rooms.
96.
Defendants required Plaintiffs Hart and Furedi, those similarly situated, and the
proposed New York Rule 23 Class to dance on stage according to a stage rotation established by
the disc jockey ("Dr.) Entertainers were put into the stage rotation and were required to dance
at the time their name was called. Each stage dance was required to last for a specified number
of songs. Entertainers were told how much clothing to remove during each song, i.e, top only
during the first song and then all clothing, save a Gvstring, during the second song.
97.
Plaintiffs Hart and Furedi, those similarly situated, and the proposed New York
Rule 23 Class were told by Defendants that they could not do "floor work" when they danced on
the stage. "Floor work" is a term in the industry that refers to entertainers dancing on their knees
or while lying down. Entertainers were only allowed to have one knee on the floor at a time at
Rick's and were not allowed to dance while lying down.
98.
Plaintiffs Hart and Furedi, those similarly situated, and the proposed New York
Rule 23 Class were not allowed to choose the songs that were played while they were dancing on
stage.
99.
Defendants set the price of personal dances. The pnce was the same for a
personal dance regardless of which entertainer performed the dance. Plaintiffs Hart and Furedi,
those similarly situated, and the proposed New York Rule 23 Class were not allowed to charge a
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different price for a personal dance than the price established by Rick's. Plaintiffs were not
allowed to choose the song that played during personal dances.
100.
Plaintiffs Hart and Furedi, those similarly situated, and the proposed New York
Rule 23 Class were required to charge customers $20 for a personal dance. If a customer did not
want to pay for the dance using U.S. currency, entertainers were required by Defendants to allow
the customer to pay for the dance using one "dance dollar."
10L
Dance dollars are coupons that cost the customer $24.00. At the end of each shift,
Plaintiffs Hart and Furedi, those similarly situated, and the proposed New York Rule 23 Class
were paid $18 by Defendants for each of the dance dollars they cashed in.
l02.
As entertainers, Plaintiffs Hart and Furedi, those similarly situated, and the
proposed New York Rule 23 Class spent time in private rooms with customers. The price paid
for time in private rooms was set by Defendants and was the same regardless of which
entertainer was spending tiIIl:e in the private room with the customer(s).
103.
Plaintiffs Hart and Furedi, those similarly situated, and the proposed New York
Rule 23 Class were required to show up for work at a specific time, and to make up a schedule in
advance. If entertainers came to work late, they were charged a fee.
104.
Entertainers were required to pay a shift fee each night they worked, unless the
fee was waived for some reason. Managers, and not entertainers, made the decision about
whether a fee would be waived on a given night.
105.
In addition to the shift fees entertainers paid, they were also required to pay the
DJ a monetary fee each night that they worked.
106.
Defendants were in charge of all advertising for the clubs.
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107.
Plaintiffs did not engage in any other employment during the time period they
worked for Defendants.
108.
Plaintiffs did not contribute money towards maintaining Defendants' club
premises or otherwise provide facilities at the club.
109.
Plaintiffs were not shareholders or officers of Defendants.
110.
Plaintiffs Hart, Furedi, those similarly situated, and members of the proposed
New York Rule 23 Class are dependent on customers' tips, making their opportunity for profit or
loss a function of how much money customers have and are willing to spend and how much
money Defendants required entertainers to pay in order to work.
111.
Defendants do not require that entertainers at their club have dance training or
experience working as entertainers at other clubs.
112.
Defendants require entertainers to audition in order to be hired; however, an
entertainer's physical appearance and not any level of dance, performance, or sales skill
determines her suitability to perform at Defendants' clubs.
113.
Entertainers are hired to work for an indefinite period at Rick's clubs.
114.
Defendants' business primary purpose is to give customers the opportunity to see
women nude or in various states of undress. The largest share of Defendants' revenue sources in
2008 and 2009 was comprised of "service revenues" which include the fees paid by entertainers
to secure their employment with Defendants.
115.
Entertainers performed at Defendants' clubs, using Defendants' stages and semi-
private rooms.
116.
Entertainers were required to dance to music provided and chosen by Defendants.
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117.
Entertainers were not allowed to hire subcontractors to perform their duties for
them. The right to dance as an entertainer at Defendants' club was a personal right, and only
people who were hired by Defendants' managerial staff were allowed to perform at Defendants'
clubs.
V.
FACTS ESTABLISHING MINIMUM WAGE VIOLATIONS UNDER STATE
AND FEDERAL LAW
A.
General Facts
118.
Plaintiffs Hart and Furedi, on behalf of themselves and all others similarly
situated, and the proposed New York Rule 23 Class re-allege and incorporates by reference the
above paragraphs as set forth herein.
119.
Plaintiffs Hart, Furedi, others similarly situated, and members of the New York
Rule 23 Class have not been paid the minimum wage by Defendants.
120.
Defendants paid Plaintiffs Hart, Furedi, others similarly situated, and members of
the New York Rule 23 Class no wages.
121.
Plaintiffs Hart, Furedi, others similarly situated, and members of the New York
Rule 23 Class eam money at Defendants' clubs through tips from the clubs' customers for
dances performed on stage or personal dances (i.e., a lap dance or table dance) in the general area
of the clubs or in semi-private rooms.
122.
Defendants set the prices of personal dances at $20 or one dance dollar.
Customers were allowed to and did tip entertainers above the $20.
123.
Customers tipped Plaintiffs Hart, Furedi, others similarly situated, and members
of the New York Rule 23 Class.in cash or using dance dollars at Defendants' clubs.
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