Now that’s making it rain.
The owners of Rick’s Cabaret in Midtown avoided an upcoming trial by agreeing to set aside $15 million to settle a class-action lawsuit brought by strippers who claimed the jiggle joint wrongfully retained their tips and classified them as independent contractors — not in-house employees — to avoid paying minimum wage.
The settlement comes after Manhattan federal Judge Paul Engelmayer in November ordered Rick’s parent company, RCI Entertainment New York, to shell out $10.8 million in damages but noted RCI could be liable to pay current and former dancers millions of dollars more for other wage-law violations since 2005 should the case go to trial April 27.
Complaints that the judge opted not to rule on included dancers being required to kick back $60 per shift to the “house” to strut their stuff.
RCI president Eric Langan said the company believes the settlement “is in the best interest of shareholders to resolve this case now, to eliminate uncertainty and the ongoing cost of litigation.”
He estimated RCI will ultimately pay between $9.5 million and $12.5 million when the total class-action claims are known.
The suit alleging the club violated federal and state labor laws was originally filed on behalf of 50 dancers; roughly 1,900 others are also in line to cash in.
Instead of being paid wages by Rick’s management, dancers said they were paid directly from customers — including what the called “performance fees” for private lap dances.
Rick’s had contended in legal papers it “exercised minimal control” over the dancers, and the club had countersued while claiming dancers’ “performance fees” should count towards any statutory wage obligation by Rick’s.
Reviewers on the Web site Yelp said that the club’s bartenders may have been shady with their tips as well.
“The bartender refused to give my friend his credit card back until they could see how much he was going to tip them,” wrote Kenny C. “Real douchey.”
Others on the site raved about their $10 lunch specials.
Engelmayer previously ripped Rick’s in a September decision, concluding honchos there “regulated almost every aspect of the dancers’ behavior within the club,” including forbidding cellphone use and gum chewing.