Labor & Employment Law Daily EEOC establishes strip club’s Title VII liability for disparate treatment of black exotic dancers
Wednesday, October 3, 2018

EEOC establishes strip club’s Title VII liability for disparate treatment of black exotic dancers

By Kathleen Kapusta, J.D.

Granting the EEOC’s motion for summary judgment as to liability, a federal court in Mississippi found no material issues remained regarding whether the complainants, a class of black female exotic dancers who worked at Danny’s Downtown Cabaret, were subjected to disparate terms and conditions of employment, including a black dancer quota. Accordingly, the court found the employer was liable to each of the complainants for violations under Title VII and that the case would proceed to trial only on the issue of damages and other relief (EEOC v. Danny’s Restaurant, LLC, September 30, 2018, Wingate, H.).

The LLC. When an African-American exotic dancer at Danny’s Downtown Cabaret filed a charge with the EEOC in August 2013 alleging discrimination based on race, Baby O’s had owned and operated the strip club since 2005. In 2016, Baby O’s purportedly transferred its assets to Danny’s of Jackson, which currently has only one member of the LLC. That individual (owner), who originally opened the strip club, was incarcerated in federal prison from 1992 to 2016. While he was in prison, the corporations that owned the strip club went through several name changes, but the club itself continued to operate in the same way, at the same location, and under the same name. Although the corporate names changed, the incorporators changed, and the officers changed, the incorporators and officers all had close personal ties with the owner.

Successor liability. In her charge, the dancer alleged that she had been discriminated against based on her race and that she was fired from her position for refusing to work at Black Diamonds, a strip club across the street from Danny’s. During the time the owner was in prison, his son acted as the general manager of Danny’s and also opened Black Diamonds. In a prior opinion, the court found that Danny’s of Jackson was the successor in interest to Baby O’s such that liability should be imposed upon it under the successor liability doctrine for any Title VII violations that occurred during the period of ownership of Baby’s O’s.

According to the EEOC’s evidence, dancers at Danny’s generally performed in the same order as they arrived and checked in. While tips they received for their performances were their only compensation for their stage dances, there were also private areas for more private dances, for which customers paid set fees established by the club. Once they reported for work, the dancers were required to remain at least six hours or pay a fine. The night manager prepared a “dance sheet” that listed each dancer’s name, race, and number of dances sold that shift.

Black quota. According to deposition testimony, in the past, managers at Danny’s created a schedule for black dancers only that limited the number of black dancers on any given shift. They were only allowed to work their scheduled shifts, and if a dancer did now show up for a scheduled shift, she was fined. White dancers, on the other hand, were free to appear for shifts at their discretion and were not threatened with fines for not showing up. Because this schedule was one of the matters complained of in a prior EEOC charge, the policy was replaced by a black quota, which limited the number or black dancers on a given night based on the number of white dancers that were present. One manager at Danny’s testified that the son told him if there were too many black dancers, he was to send some home. There was also evidence that after the owner was released from prison, he fired a lot of black dancers, keeping only the “real money makers.”

Although Danny’s of Jackson filed a response and memorandum in opposition to EEOC’s motion for summary judgment on the issue of liability, it did not respond with any factual evidence to refute the EEOC’s evidence regarding the black quota.

Black diamonds. When Black Diamonds, which according to the complainants was meant to appeal to black customers, opened in 2013, the son required all the black dancers to work the grand opening and fined them if they did not. Those fines were put on the books at Danny’s, and the dancers had to make payments toward the fine in order to work a shift at Danny’s. Because no private dances were allowed, earnings for black dancers were significantly reduced at Black Diamonds. The opening of Black Diamonds also provided a means for limiting the number of black dancers at Danny’s, because when there were too many black dancers at Danny’s, the manager simply made them go across the street to Black Diamonds instead of being sent home. Dancers who refused were fined. White dancers were not required to work at Black Diamonds or fined for refusing to work there. After Black Diamonds opened, Danny’s would not accept applications from black dancers.

Danny’s of Jackson filed a response and memorandum in opposition to EEOC’s motion for summary judgment on the issue of liability, but did not respond with any factual evidence to refute the evidence submitted regarding the black dancers being required to dance at Black Diamonds.

Complainants. The complainants all testified to race-based discrimination, including being sent home for refusing to work at Black Diamonds, being fined for refusing to work there, being limited to specific shifts at Danny’s due to the black quota system, being called names such as half breed, and being fired for refusing to pay a fine before being allowed to dance at Danny’s.

Treatment of customers. There was also evidence that the son charged black customers more than white customers and that each cash register included buttons for Black, White, and Other. Danny’s of Jackson similarly filed a response and memorandum in opposition to the EEOC’s motion for summary judgment on the issue of liability, but did not respond with any factual evidence to refute the EEOC’s evidence regarding the differences in treatment of black and white patrons.

Offensive language. In addition, the owner and his son both frequently used offensive language to refer to the black dancers, customers, and people in general, including calling white employees who had been romantically involved with a black individual “N—–” lovers; referring to black individuals as “[b]lack bitches” and “Black Ass,” calling biracial dancers “half breeds,” and making comments like “why is that N—– in here?” Danny’s of Jackson did not submit any evidence to dispute that the owner and his son used racially derogatory language.

Evidence. As to the EEOC’s assertion that it produced direct evidence of race discrimination, the court noted deposition testimony of numerous witnesses, declarations, and documents that established that Danny’s of Jackson limited complainants’ work hours by imposing a schedule; sent complainants home; forced complainants to work at a less desirable location; imposed fines on complainants for acts that other dancers were allowed to commit; forbade complainants to perform immediately before or after another black performer; and took other actions that adversely affected the terms and conditions of the complainants’ employment. Further, Danny’s of Jackson did not show that the same decisions would have been made regardless of the complainants’ race. There was also evidence of frequent use by the owners and managers of Danny’s of racially derogatory comments, which could also constitute “direct evidence” of discrimination. Not only did this evidence show discriminatory treatment occurred, in most instances it was undisputed.

Alternatively, the EEOC also established a prima facie case of race discrimination, and Danny’s of Jackson did not articulate any legitimate, nondiscriminatory reason for its actions. Thus, said the court, the inference flowing from the EEOC’s prima facie case “stands unrebutted, and discrimination is established.”

Interested in submitting an article?

Submit your information to us today!

Learn More

Labor & Employment Law Daily: Breaking legal news at your fingertips

Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on labor and employment legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.