Exotic Dancers’ Class Action Employment Suit Stays Alive in California

Salazar v. Victory Entertainment, Inc., No. B249888 (December 15, 2014): In a recent decision, a California Court of Appeal revived a class action lawsuit brought by a group of exotic dancers who claimed that they were misclassified as independent contractors. The three-judge panel reversed a trial court’s order denying a motion to certify the class, and returned the case to the trial court to consider the class certification issue in light of the California Supreme Court’s decision in Ayala v. Antelope Valley Newspapers, Inc.

Stacy Salazar worked as an exotic dancer in an adult entertainment club owned by Victory Entertainment, Inc. In 2010, Salazar brought a class action lawsuit against Victory Entertainment for misclassifying her and other dancers as independent contractors as opposed to employees. The dancers alleged illegal wage deductions, conversion (on the basis of alleged illegal tip collection), failure to provide uniforms, failure to provide itemized wage statements, failure to provide rest and meal breaks, and unfair business practices.

After applying the common law test for employment relationships, which uses the degree of control the hirer has over the worker, the trial court determined that the issue would require individual inquiries at trial. On that basis, the court denied class certification. Salazar appealed.

The Court of Appeal reversed the trial court’s ruling. According to the court, instead of the common law test, the trial court should have applied the California Supreme Court’s analysis in the Ayala decision. The Ayala court had held that when determining whether an employment relationship exists, the key issue is “the degree of a hirer’s right to control how the end result is achieved” and not just the actual control asserted by the employer.

The Court of Appeal also held that the trial court should look to the Industrial Welfare Commission wage orders to determine if a worker is an employee or independent contractor—applying the Court of Appeal’s October 2014 decision in Dynamex v. Superior Court. The Court of Appeal noted that both Wage Order No. 5 and Wage Order No. 10 “appear to apply to exotic dancers.” Thus, the order denying class certification was reversed.