Two of the premier strip clubs in downtown Minneapolis are accused in two Hennepin County District Court lawsuits of illegally skimming tips from dancers and other employees.
The lawsuits filed this week against Rick's Cabaret and Schieks Palace Royale contend the establishments violated state employment law by keeping part of their employees' tips.
"Minnesota law gives employees the right to retain all tips from customers intended for them," said E. Michelle Drake of Nichols Kaster & Anderson, the Minneapolis-based employment law firm handling the case.
At both venues, patrons can pay cash or they can use credit cards to purchase "dance dollars" or "entertainment dollars" for use in the clubs. Some patrons prefer using credit cards so the expense can be written off as a business entertainment purchase.
The dollars are used as gratuities for dancers, bartenders, disc jockeys, floormen, doormen, desk staff and waitresses. But employees aren't given face value when they are cashed in.
Schieks pays $18 for every $20 in "entertainment dollars" exchanged by employees. Rick's pays $17 for every $20 in "dance dollars" exchanged by employees up to $1,000.
For amounts in excess of $1,000, Rick's pays out $13 for every $20 turned in. Neither club will exchange expired dollars.
Allan Priaulx, a spokesman for RCI Entertainment Inc. in New York City, which owns Rick's and other clubs throughout the country, said the company had just received the lawsuit and couldn't say much, but added, "We've always had, and will continue to have, good relations with our employees. We'll look carefully into this lawsuit."
A woman named Crystal who answered the phone at Schieks declined to comment. Schieks is owned by VCG Holding Corp. of Lakewood, Colo., which referred calls to the local business. A second call was not returned.
Judge must certify 'class'
The only plaintiff named in the class-action lawsuit is Eric Zajkowski, a doorman at Rick's Cabaret from October 2006 through April 2007. Zajkowski also worked at Schieks from July 2004 through March 2006 and from April through October of this year.
Drake declined to estimate what Zajkowski's losses might be. Each lawsuit seeks in excess of $50,000.
The case has yet to be assigned to a judge. For the lawsuit to proceed, a judge will have to certify the class of people eligible to benefit from the suit if the plaintiff prevails.
"We hope to recover the tips that rightfully belong to the employees," said Steven Andrew Smith, who is working with Drake on the case. "Employees in the adult entertainment industry are just as entitled to the protections of the law as anyone else."
In Zajkowski's case, he was both a floorman and a director, who acts as a sort of concierge at the club, making sure customers are having a good time. Zajkowski, who is 31 and lives in Minneapolis, was not available for an interview, according to Drake.
The suits allege that the two Minneapolis clubs violated the law by failing to provide employees the full gratuities they were intended. State law says that tips received by employees are their sole property. The suit also included claims of conversion and unjust enrichment against the clubs.
A nearly identical federal claim was filed in October against New York's famous Scores clubs, a favorite spot for athletes, radio personality Howard Stern and businessmen.
According to the federal suit filed by a former bartender in U.S. District Court in Manhattan, Scores allowed customers to purchase tokens to be used toward tips.
Customers at Scores are charged an extra fee when they purchase the tokens and workers are paid less than what the tokens are worth when they cash them out.
Rochelle Olson • 612-673-1747