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McFeeley v. Jackson Street Entertainment

As we mentioned in our previous blog, Department of Labor Investigations are on the rise; specifically, the DOL is looking into the employee/independent contractor classification. Too often, employers are classifying workers as independent contractors, when in actuality, they should be employees.

The recent Fourth Circuit decision in McFeeley v. Jackson Street Entertainment is getting a lot of press. In the McFeeley case a group of exotic dancers sued their employer who had classified them as independent contractors. The decision was authored by Judge Wilkinson. The court decided that Jackson Street had classified the dancers as independent contractors in error and they should have been classified as employees.

Both the DOL and courts examine a number of factors to determine whether or not a worker is an employee or independent contractor. The factors include managerial decisions, amount of investment the worker made relative to the employer and the workers opportunity for profit and loss. However, Judge Wilkinson’s opinion gave the most weight to which party had the most control over the employment environment. We, too, find that is often the most important factor. The court found “plain manifestations of defendants’ control over the dancers; including, requiring the dancers to tip in, dictating their work schedule, and imposing written guidelines on the dancers.”  The control factor led the court to determine that the dancers were employees not independent contractors.

Additionally the court found that Defendant owed liquidated damages even though the defendant thought the dancers had been classified correctly holding “If mere assumption amounted to good faith and reasonable belief of compliance, no employer would have any incentive to educate itself and proactively conform to governing labor law.” It is so important to make sure you are treating your employees correctly under the law. If you have any questions, feel free to contact us.

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