A March federal court ruling in favor of exotic dancers who brought a lawsuit against their employer upholds their right to fair wages and working conditions.

“Businesses that prey upon vulnerable workers need to be held accountable and need to be required to pay their employees,” Killmer Lane & Newman attorney Mari Newman said. “I wanted to stand up for people who are in a position that makes it difficult to stand up for themselves.”

The July 2013 suit, filed against the Fantasy Gentlemen’s Club in Grand Junction for violating the Fair Labor Standards Act and the Colorado Minimum Wage Act, resulted in a settlement award of $500,000 for 12 individuals earlier this year. The case is one of four nominated for the Colorado Trial Lawyers Association’s Case of the Year award.

Since its opening in 2010, the Fantasy Gentlemen’s Club experienced “significant dancer turnover,” according to U.S. District Court Judge Raymond Moore. The lawsuit argued that the dancers – who were considered independent contractors by club owner Kevin Eardley – were employees of the club and were denied fair wages and compensation for their work.

The dancers were charged a stage fee to work, which was up to $80 per shift, and had to pay an additional fee to dance in the club’s private rooms. They were required to sign up for three shifts per week, regardless of how busy the venue was, and were fined – sometimes up to $100 – for trading shifts, calling in sick or changing their schedules.

The dancers were also threatened with fines for numerous infractions, which were levied arbitrarily and unfairly, according to Newman. The suit included several photos of signs posted throughout the club that outlined a host of fines for transgressions such as hanging out in the dressing room or “complaining” to customers. Touching themselves, one another or being touched by a patron were considered fineable offenses and could result in an increase in the dancer’s stage fee.

The “economic realities test” in the Fair Labor Standards Act determines which workers are defined as employees rather than independent contractors. Some identifiers include “the degree of control exerted by the alleged employer over the worker, the worker’s opportunity for profit or loss, the degree of skill required to perform the work and the extent to which the work is an integral part of the alleged employer’s business.”

And despite the club’s annual income in excess of $500,000, dancers were also required to pay out a portion of their tips from customers to the bouncers and DJs, even though those employees were paid hourly and received regular paychecks in accordance with minimum wage standards.

The Colorado Minimum Wage Act defines an employee as “any person…performing labor or services for the benefit of an employer in which the employer may command when, where, and how much labor or services shall be performed.” It stipulates that individuals who are primarily free and in control of how much labor they provide and the performance of services are not considered employees. In addition to scheduling requirements and restrictions, the dancers did not receive W-2s or any other wage-related documentation.

According to the suit, the Fantasy Gentlemen’s Club “business model is predicated entirely on the exploitation” of the dancers. Though a trial was set for March 13, Eardley filed for bankruptcy in February, resulting in an automatic stay on the lawsuit. The bankruptcy filings, however, were deemed fraudulent. Eardley dropped them prior to a ruling by the judge, and Newman maintains that the “extended rigamarole” simply served to disrupt the civil case.

Newman says that the court’s summary judgment in favor of the dancers without the case going to trial was especially uncommon, but due to the egregious nature of the violation they were able to prove the breach of workers’ rights.

“The bottom line is workers deserve to get paid. Whether we’re talking about dancers in adult clubs or immigrant workers in restaurants, people deserve to be paid for their work and lawyers need to stand up for them,” Newman said.

Newman recently took on another case on behalf of dancers in Colorado – a class action lawsuit brought against a chain of clubs, including Diamond Cabaret and La Boheme in Denver.

“It’s an industry wide problem, and it’s remarkable that it persists,” Newman said. Nearly every case brought about on behalf of dancers has found that they should be paid as employees and are entitled to all legal rights, but [employers] continue to do it because they believe they can bully vulnerable people.”