Sex sells, but does it pay? Strippers claim Inver Grove Heights club violated wage law

By David Hanners
dhanners@pioneerpress.com
Updated: 06/03/2009 09:25:36 AM CDT

The King of Diamonds strip club’s Web site touts a “non-stop show” where “your dreams come true.”

Maybe for the customers of the Inver Grove Heights “gentleman’s club.”

But two strippers claim in a federal lawsuit that the club didn’t pay them wages and required them to pay the owners a nightly “house fee” for the privilege of working there.

King of Diamonds classified the women as independent contractors when they should have been salaried employees earning at least minimum wage, according to the suit, filed Monday in U.S. District Court in Minneapolis.

The women allege that their only income came from customers’ tips. Besides having to pay a house fee ranging from $50 to $100 a night, they claim they were forced to pay the owners “late fees, fees for failing to sign up for their shifts in advance and fees for leaving early.”

“Certainly, in some instances, the entertainers would make money at the end of the night,” said E. Michelle Drake, a lawyer representing the women. “But there were some cases where they lost money. From a legal perspective, they shouldn’t.

“You can’t make your employees pay to come to work,” Drake said. “The law is very clear. Money only flows in one direction, from the employer to the employee.”

The club’s owner, Susan Kladek, said she hadn’t seen the lawsuit and would have to talk to her attorney before commenting on it.

“We have nothing to hide,” she said.

Susan Kladek is the wife of the club’s founder, Larry

Kladek. He gave up ownership in December, the same month he pleaded guilty to a single count of income tax evasion.
In September, a federal grand jury indicted Kladek on nine criminal counts that alleged he cheated the government out of nearly $913,000 by filing false individual and corporate tax returns between 2000 and 2003. He reached a deal with the U.S. attorney’s office, pleading guilty to a single count of income tax evasion. The other counts were dropped.

His sentencing will be July 8.

The women bringing the civil suit seek to make it a class action because they believe more than 100 former or current employees of the King of Diamonds could have been subjected to the same conditions. Drake said she hasn’t figured out how much the women are owed but says the sum “is substantial.”

The claims in the civil lawsuit involve Jessica Van Vliet, of St. Paul, who worked at the club as an entertainer from June 2006 to November 2007, and Rebecca Carlin, of Falcon Heights, another entertainer who worked there from May 2005 to April 2007.

Drake claimed the adult entertainment industry “is notorious” for classifying employees as independent contractors and not paying them wages. A check of two Minneapolis strip clubs — Déjà Vu and Sheik’s Palace Royale — found different approaches to paying performers.

“Most of the places don’t” pay, said a man who answered the phone at Déjà Vu and declined to give his name.

But Gary Scellin, area director of Sheik’s, said all the club’s workers “are paid employees.”

“They all have the opportunity to get tips, but they all make a salary. They get paid an hourly wage,” Scellin said. “As far as the industry goes, it varies from club to club. A lot of clubs have their entertainers contracted as independent contractors, not employees.”

But Drake said the U.S. Department of Labor considers entertainers at strip clubs to be employees. She said the clubs often take advantage of women, believing the workers won’t report workplace violations.

“The club took advantage of the fact that many women in this industry may be reluctant to raise a wage-and-hour claim in the courts because of concerns about coming forward about the kind of profession in which they engage,” Drake said.

“It’s perfectly legal, perfectly respectable, and these people are just as entitled to protection of wage-and-hour laws as anyone else,” she said. “They’re just as protected as pizza delivery drivers, people who work at Starbucks or people who work at Wal-Mart.”

The suit claims Van Vliet and Carlin were hired as entertainers and weren’t required to have specialized training or background.

“Defendants have, however: established specific work schedules for entertainers, required entertainers to dance at specified times and in a specified manner on stage, regulated entertainers’ attire and interactions with customers, and financed all advertising efforts undertaken on behalf of the King of Diamonds,” the suit says.

It also said that while the women got tips “in exchange for performing lap dances and/or for spending time with customers,” they were re-quired to share the tips with bartenders and disc jockeys.

The suit also includes wage-and-hour claims by two other women, one of whom still works at the King of Diamonds. Corbin Dantzscher, of South St. Paul, still works at the club as a “floor host,” while Brittina Hedman, also of South St. Paul, worked there from April 2008 until March.

Dantzscher and Hedman claim they didn’t get paid for all the hours they worked. Also, the suit contends that while they received tips, they were required to share them “with other employees who did not directly serve the customers who gave the non-entertainers those gratuities.”

“As a result of Defendants’ failure to pay employees for all hours worked, Defendants’ practices caused employees’ pay to fall below the minimum wage,” the suit contends.

David Hanners can be reached at 612-338-6516.