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Employment contracts at issue in wage theft class action

Several weeks ago in this Greenbelt Employment Law Blog, we discussed a class action wage theft lawsuit that had been filed by exotic dancers in West Virginia who accused their employer of illegally taking a portion of their tips. This case has now been complicated as the employer, a club, has asked a judge to dismiss the case due to stipulations in the employment contract that the dancers signed.

The employment contract reportedly states that any dispute arising out of the employment relationship must be handled in arbitration, and that any legal claims must be handled individually rather than as a class action. Arbitration is a form of alternative dispute resolution in which issues are handled outside of court, with a third party reviewing the evidence in order to come to a decision that is generally legally binding.

It will be interesting to learn how a judge will rule on this request for a dismissal. As many people are aware, this is one of several wage theft lawsuits filed against strip clubs recently. Many of those cases have been settled, including one that involved a similar motion to dismiss.

In that case, the club cited the employment contract's mandatory arbitration clause and sought a dismissal, but the judge was not able to respond to the request because the case was settled within three weeks.

Alternative dispute resolution, such as arbitration, is sometimes a beneficial way for both employees and employers to resolve disputes, as it can be more timely and cost-effective than going to court. However, whenever an employer tries to enforce an element of an employment contract, the employee may be wise to seek legal counsel to make sure that he or she understands the options. Employment contracts are often much more complicated than they seem, and they may or may not be legally enforceable.

Source: The West Virginia Record, "Strippers face arbitration agreement in class action against Paradise City," John O'Brien, April 9, 2013

  • For more information about employment contracts and employment law, please visit our law firm's Employment Contracts page.

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