Under the Fair Labor Standards Act of 1938 (“FLSA”), virtually every business operating in America is required to furnish its employees the federal minimum wage and overtime compensation. There are a number of exceptions to the FLSA, however, and many employers will try to cubbyhole their employees into one of the many available exemptions. Among the exceptions most often cited by employers is the one that applies to “independent contractors.” Indeed, many employers will classify their employees as independent contractors and, in some cases, have them sign form agreements purportedly manifesting an intent to be bound by the terms of an independent contractor relationship. This dynamic was recently addressed by an Atlanta federal district court in Henderson v. 1400 Northside Drive, Inc., a case with facts involving whether strippers were the employees of a strip club.
Henderson was brought by a group of male adult dancers who worked at an adult nightclub that was owned and operated by 1400 Northside Drive, Inc. Each dancer was required to sign an “Independent Contractor Agreement,” which generally stated that the dancer understood that his compensation would be derived solely from customer gratuities and that the club was not responsible for compensating the dancer in any way. The dancers argued that they were misclassified as independent contractors and are therefore entitled to unpaid minimum wage and overtime compensation from the club.