Strippers face arbitration agreement in class action against Paradise City

MARTINSBURG – A mandatory arbitration clause stands in the way of three strippers who filed a class action lawsuit against the club they say unfairly took a percentage of their tips, while a federal judge has preliminarily approved $138,000 in fees for attorneys in a similar case.

Paradise City II on March 26 filed its motion to dismiss the case, citing a clause in the employment contract it says the dancers signed that would force their claims out of court and into arbitration.

The lawsuit, filed March 1 in Berkeley County Circuit Court, alleges Paradise City II violated the Fair Labor Standards Act and the West Virginia Wage Payment and Collections Act.

The motion to dismiss says both state and federal law mandates the dispute be sent to arbitration. It cites paragraph 20 of a Dancer Performance Lease the club says the dancers signed.

“Any controversy, dispute or claim arising out of this lease or otherwise out of Entertainer performing at the premises of the club shall be exclusively decided by binding arbitration under the Federal Arbitration Act,” the lease says.

The lease also puts in question if the dancers are allowed to file a class action.

“Entertainer agrees that all claims between her and the club will be litigated individually and that she will not consolidate or seek class treatment for any claim,” it says.

The three plaintiffs in the March 1 case against Paradise City II are Man Le Garrett, Krystal McLaughlin and Jane Roe. Roe is a pseudonym being used to avoid violence from third parties.

The case alleges Paradise City II and manager Warren Dellinger required the three to pay, from their tips, $35 for each private dance and $30 for a 30-minute dance in the champagne room. Other dancers paid even higher amounts, the suit says, including $50 for a 30-minute dance in the champagne room.

Garrett and McLaughlin were employed for four months and Roe for 11 months. The women say they will fairly and adequately represent the class.

They are represented by Martinsburg attorney Garry Geffert and Maryland attorney Gregg C. Greenberg of the Zipin Law Firm. They also filed five complaints from March 7, 2011, to Jan. 2, 2012, in Martinsburg federal court.

Four have been settled, and the class action filed by Arielle Jordan, aka Queen, and Patrice Ruffin, aka Karma, against Legz Club remains pending, though a settlement has been proposed and accepted.

On March 28, U.S. District Judge Gina Groh ruled that the conditions of the proposed settlement are fair, though a final hearing on its fairness will be held July 29.

The gross settlement amount is $345,000. Greenberg and Geffert will petition the court for fees, litigation costs and a named plaintiff incentive award to be paid out of that amount.

Greenberg and Geffert will be petitioning for 40 percent of the award - $138,000.

In settlement negotiations, the two were originally seeking $642,000 for the class.

Any funds remaining from the $345,000 will be given to Public Justice, a public interest law firm.

Like Paradise City II, Taboo Gentlemen’s Club cited a mandatory arbitration clause in its employment contract with dancers.

The clause was the subject of a Sept. 26 motion to dismiss filed by the club. The judge in the case was never given a chance to respond to it, as the case was settled three weeks later.

Representing Paradise City II is Floyd M. Sayre III of Bowles Rice’s Martinsburg office.

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.