28,000 Exotic Dancers Win $6.55 Million Settlement Over Deja Vu Club Misclassification

For years, dancers at Deja Vu Consulting's network of adult entertainment clubs were told they were independent contractors. That classification had concrete financial consequences. Rather than receiving wages, the dancers paid nightly 'rent' and 'stage fees' to the clubs for the right to work. They were also required to share tips with management and other club employees. The Fair Labor Standards Act does not permit that arrangement for workers who meet the economic-realities test for employee status, and federal courts have repeatedly found that club dancers typically do.

Sommers Schwartz, led by attorney Jason J. Thompson, filed a class action in the U.S. District Court for the Eastern District of Michigan on behalf of a proposed class that ultimately encompassed approximately 28,000 current and former dancers across 64 Deja Vu-affiliated clubs in 18 states. The complaint alleged intentional misclassification, failure to pay federally mandated minimum wages, unlawful tip-splitting arrangements, and wage deductions through rents and fines.

The sheer size of the class, spanning many states and a single corporate family of clubs, made the litigation procedurally complex. Counsel worked through years of contested discovery and class certification briefing before reaching a negotiated resolution in February 2017. U.S. District Judge Stephen Murphy III approved the final settlement agreement in June 2017, finding it fair, adequate, and reasonable.

The $6.55 million settlement fund was structured in two tiers. Class members who elected a one-time payment shared a cash pool, with individual amounts scaled to how long each dancer had worked. Dancers who continued working as independent contractors gained access to a separate pool of credits worth up to $4.5 million to offset future rent and fee charges, with per-person credits set at $200, $1,000, or $2,000 depending on months worked. The agreement also required structural changes: each club had to provide new dancers with an individualized classification assessment, and the clubs' control over independent contractors was contractually limited going forward.

A group of objecting class members challenged the settlement terms, arguing the per-person cash amounts were inadequate given the scale of alleged violations. The Sixth Circuit considered those objections in full and affirmed approval on June 3, 2019, citing the high risk of continued litigation, the uncertain likelihood of class-wide success on the merits, and the direct value the agreement delivered to members through cash, credits, and structural relief. Case No. 17-1827.