Attorney General Schwalb Sues Adult Entertainment Establishment for Violating Civil Rights and Employment Laws

Attorney General Brian L. Schwalb today sued Cloakroom, an adult entertainment venue, and its owners, Antonios Cavasilios and Carlos Horcasitas, for systemic violations of the District's civil rights, employment, and consumer protection laws. As alleged in the complaint, the Office of the Attorney General's (OAG) investigation found that Cloakroom and its owners have created a hostile and exploitative work environment where female employees are routinely subjected to sexual harassment, inappropriate touching, insults, and even physical assault. Additionally, club management has stolen hundreds of thousands of dollars in tips and wages from employees, denied them paid sick leave, and retaliated against those who have spoken out. One former Cloakroom manager regularly required sexual favors in exchange for unpaid leave and schedule changes.

"Cloakroom and its owners flagrantly disregard the most basic workplace protections and decencies, routinely subjecting female employees to degradation and abuse while deploying a variety of schemes to steal their pay. As the District's independent Attorney General, we will put an end to this type of exploitative combination of sexual harassment and wage theft," said Attorney General Schwalb. "My office will always fight for the dignity, safety, and livelihood of District workers."

Cloakroom, located at 476 K Street Northwest, employs dozens of employees, the vast majority of whom are women. OAG alleges that for years, Cloakroom and its owners have violated the District of Columbia Human Rights Act, Minimum Wage Revision Act, Wage Payment and Collection Law, Consumer Protection Procedures Act, Sick and Safe Leave Act, and Wage Transparency Act by:

• Sexually harassing female employees: Club managers and employees, including Cavasilios, routinely sexually harass female employees by calling them sexist and demeaning names and subjecting them to inappropriate touching. Owners and managers wield their hiring, firing, and scheduling power to maintain a coercive, exploitative workplace, preying on younger and less experienced workers in particular. On at least one occasion, Cavasilios himself sexually assaulted a club employee. None of the club's male employees experience this type of mistreatment and abuse.
  
• Stealing tips: Cloakroom and its owners have stolen entertainers' tips through various illegal schemes. They encouraged patrons to tip using Cloakroom-branded fake currency called "Cloakbucks"-and then pocketed 10% when the "Cloakbucks" were converted to cash. Cloakroom discontinued this practice during OAG's investigation. Cloakroom also forces entertainers to give approximately 10-20% of their tips ("tip-outs") to other club employees, including DJs and security guards, under threat of retaliation. In the past three years alone, Cloakroom has stolen tens of thousands of dollars from workers through these schemes-schemes that also deceive customers, who believe the entirety of their tip amount goes to entertainers.
  
• Stealing wages: When entertainers perform in private rooms, Cloakroom promises that they will earn a fixed percentage commission, typically 40%, of the amount charged to the customer. In reality, entertainers are forced to pay out 10-20% of their earned commissions to club managers. Those who complain, or refuse to pay out enough, experience retaliation, including assignment to more challenging shifts and do not receive protection from patron harassment. Cloakroom has stolen hundreds of thousands of dollars from entertainers this way.
  
• Failing to adequately pay for overtime and for all hours worked: District law mandates that hourly employees receiving the tipped minimum wage receive their hourly rate plus half of the full minimum wage for hours worked above 40 hours in a week. Cloakroom forces employees to work more than 40 hours per week but fails to pay them the correct overtime rate. By incorrectly calculating the overtime rate, Cloakroom has illegally withheld thousands of dollars of wages from its employees. Cloakroom also forces entertainers to clock-out prior to nightly, mandatory "post-shift" meetings that regularly last 30-60 minutes, failing to pay them anything for this time.
  
• Failing to provide sick leave: Until OAG's investigation, Cloakroom did not provide any paid sick leave to employees. When employees needed time off or schedule changes due to illnesses and injuries, they were forced to take unpaid time off. When employees requested the paid time off that they are legally entitled to, they were often retaliated against by being removed from the schedule for days or weeks or even fired.
  
• Retaliating against workers: Cloakroom's persistent illegal conduct is enforced by retaliatory practices intended to ensure silence from its employees. Employees have been fired for inquiring about their pay rate, insulted for requesting time off, and even put in physical danger, as managers will retaliate by refusing to call security when an employee is harassed or threatened by patrons, a common occurrence at the venue.

OAG's lawsuit seeks to end Cloakroom's illegal conduct and bring the business into compliance with the District's civil rights, employment, and consumer protection laws. It also seeks back wages and damages for workers who have been abused and denied wages, tips, and paid sick leave, as well as civil penalties.

If you are a former or current employee of Cloakroom who experienced or witnessed any conduct like the conduct described in this lawsuit, please contact OAG by calling (202) 724-7730 or emailing [email protected] or [email protected].

A copy of the complaint is available here.

This matter is being handled by Assistant Attorneys General Sarah Michael Levine, Nadeen J. Saqer, and Christian F. Whitmer; Dennis A. Corkery, Assistant Chief of the Workers' Rights and Antifraud Section; and Alicia M. Lendon, Chief of the Civil Rights and Elder Justice Section.

OAG's Efforts to Protect Workers
OAG's Workers' Rights and Antifraud Section is dedicated to fighting wage theft, protecting District workers and ensuring that businesses in the District compete on a level playing field. Since AG Schwalb became the District's independent Attorney General in January 2023, OAG has secured more than $19 million for workers and the District. In total, since gaining wage theft enforcement authority, OAG has secured over $35 million by investigating and bringing enforcement actions against employers who violate District law. OAG's wage theft enforcement efforts have focused on industries with high populations of vulnerable workers, such as construction, restaurants and hospitality, healthcare, and the gig economy.

How to Report Wage and Hour Violations
Workers who believe that their rights have been violated, or that they have experienced wage theft or other wage and hour violations, can contact OAG by calling (202) 724-7730 or emailing [email protected] or [email protected].

How to Report Workplace Harassment and Discrimination
If you have experienced workplace harassment or discrimination of any kind, report it to OAG by calling (202) 727-3400, emailing [email protected].

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