In a split decision, the Supreme Court of South Carolina, reversing a majority decision by the state’s Court of Appeals, held that an exotic dancer was an employee—not an independent contractor—of a nightclub and that she was, therefore, entitled to workers’ compensation benefits for injuries she sustained when she was hit by an errant bullet during an altercation at the club [Lewis v. L.B. Dynasty, 2015 S.C. LEXIS 118 (Mar. 18, 2015)]. Acknowledging that the burden of proving the relationship of employer and employee was upon the claimant, the majority held the evidence showed the club had sufficient right to control the claimant-dancer’s activities so as to create an employment relationship.
Four Factors to Be Examined
The majority indicated that in analyzing the nature of a work relationship the Court was required to examine four factors [see Shatto v. McLeod Reg’l Med. Ctr., 406 S.C. 470, 475–76, 753 S.E.2d 416, 419 (2013)]:
- direct evidence of the right or exercise of control;
- furnishing of equipment;
- method of payment
- right to fire.
Moreover, no single factor was dispositive; each factor was considered with equal force.
The majority indicated the majority of the court of appeals had allowed its analysis to be influenced by the initial conclusion that claimant was an “itinerant artistic performer,” 732 S.E.2d at 664. The inquiry required a review of all factors; the court’s broad characterization as to the nature of the claimant’s profession prior to engagement in the analysis foretold a single result. The majority said the question before the Court was a simple, fact-based consideration—did the club exercise sufficient control over the claimant to create an employee relationship? Further commentary on the nature of her profession was unnecessary.
Right to or Exercise of Control
As to the first prong of the test, the majority found the facts preponderated in favor of an employment relationship. The majority indicated the court of appeals was incorrect in focusing on whether the club dictated how claimant danced. While the claimant choreographed her own routine, she was required to pay a tip-out fee, undergo a search, and review the club’s rule sheet. The club could decline her entry if her appearance was undesirable. The club chose the music for all her performances. It also dictated when in the rotation of dancers she must appear on stage. The club set the minimum for a V.I.P. dance—which the claimant was required to perform if asked—and specified an area for those to take place. Although Lewis technically performed routines of her own direction, the club specified her degree of nudity. She was required to be topless, but would be fined for removing more. This factor accordingly weighed in favor of a finding of employment.
Furnishing of Equipment
This second factor also weighed in favor of an employment relationship, indicated the majority. Other than her costume, the claimant brought no equipment to the club. The club, however, supplied her necessary performance space—including an area for V.I.P. dances, a stage with a pole, tables, and a sound system. Quoting Larson’s Workers’ Compensation Law, § 61.01, the majority indicated the claimant could not be said to supply equipment where the size and value was not so large as to provide an incentive for control. Here, the club bore the risk of the capital investment in the equipment used by the claim to perform her work.
Method of Payment
The majority, again quoting Larson, indicated this factor weighed in favor of an independent contractor relationship. While the club exerted some control over the claimant’s payment—it set the price of the tip-out fee and the minimum for V.I.P. dances, and it required the claimant to perform these V.I.P. dances upon request from a customer, on the balance this factor did not suggest the exercise of control of the club.
Right to Fire
The majority acknowledged that the claimant had the right not to show up at all, but once she was hired for the night, the club could end that relationship prior to her shift ending and leave the claimant with no recourse for that firing. The majority found, therefore, that this prong of the test preponderated toward an employment relationship.
The majority emphasized that its analysis was necessarily driven by the particular facts of this case. Examining the totality of the circumstances, the majority held the weight of the evidence weighed in favor of finding the claimant was an employee of the club and was entitled to workers’ compensation benefits.
Justice Pleicones dissented.