In part one of our two-part EXPO 2024 Legal Panel coverage, ED Legal Correspondent Larry Kaplan (who also moderated this panel) offers a detailed recap of the key legal issues discussed and dissected by accomplished industry attorneys including Jeffrey Kimmel, Devon Lyon, J. Michael Murray and Brad Shafer.
(NOTE: This story appears in the November 2024 issue of ED Magazine.)
Unless you’ve been living under a rock, you’re well aware that our industry faces unique challenges, and this is certainly not a business for the faint of heat. Adult club operators are constantly dealing with an onslaught of ever-changing laws, regulations, and baseless lawsuits they must defend against that threaten to disrupt their operations, drain their resources, and even threaten their very existence. Thankfully, we have expert First Amendment and labor attorneys who work tirelessly to defend this industry. The annual Expo’s legal panel brings together top industry defenders to update club owners and operators on the latest legal and regulatory developments. This year, we were fortunate to have four leading experts who are truly at the forefront of these issues. Our four Expo 2024 legal panelists include:
Jeffrey Kimmel, who represents adult industry clients and other employers in matters related to wage-and-hour violations, wrongful termination, anti-discrimination, and legal compliance issues and, advises high-profile and high-net-worth individuals on crisis management and litigation strategy.
Devon M. Lyon, who represents adult clubs across the nation in labor and employment law matters, including unauthorized use of images—often called model suits, insurance matters, dancer safety, and proactive measures to prevent discrimination, harassment, and retaliation-related lawsuits.
J. Michael Murray, who has extensive experience in First Amendment cases in courts throughout the U.S. He’s a fellow of the American College of Trial Lawyers, a past President of the First Amendment Lawyers Association and is recognized in the Best Lawyers in America in two categories: First Amendment law and white-collar criminal defense.
Brad Shafer, who practices nationwide, including before the U.S. Supreme Court, exclusively representing the adult industry. He is the most successful attorney ever to defend the dancer, employee/independent contractor issue, and is a past President of the First Amendment Lawyers Association.
In part one of this two-part report, we address the current state of First Amendment protections for the industry, significant recent changes in the law, a concerning trend in supposed “dancers’ rights” legislation, the rise of new human trafficking litigation, and troubling prohibitions against 18-20-year-adults dancing or working at adult businesses.
J. Michael Murray: Are the First Amendment protections for this industry in jeopardy?
The discussion began with a question to J. Michael Murray about the current status of First Amendment protections for the adult industry, which has historically relied on these rights.
Murray noted, “The freedom of sexually oriented expression, erotic expression, and adult erotic dancing are once again under attack.”
Murray expressed deep concern over what he perceives as growing threats to the freedom of erotic expression, which includes adult entertainment and sexually oriented speech. He highlighted an upcoming Supreme Court case, Free Speech Coalition v. Paxton, as a crucial moment that could influence the future of these rights. This case involves a Texas law mandating age verification for accessing explicit content online, which raises privacy concerns due to the potential sharing of personal information.
Murray sounded the alarm over Project 2025, a conservative initiative aimed at criminalizing pornography and prosecuting those involved in its creation and distribution. He cautioned that if a conservative administration assumes power in 2025, the adult industry could encounter even greater dangers. According to Murray, the stakes for the future of erotic expression in the U.S. have never been higher.
Murray explained that the Fifth Circuit Court upheld the law by applying a “rational basis test,” a lower standard of judicial review than the “strict scrutiny test” typically applied to laws regulating content. He worries that if the Supreme Court adopts this approach, it could lead to broader restrictions on erotic expression.
“The Court could either weaken First Amendment protections for activities like nude dancing, or it could reaffirm the higher standard of scrutiny for content-based laws,” Murray cautioned.
He emphasized the gravity of the situation, particularly in light of recent Supreme Court decisions that have overturned long-standing precedents, such as Roe v. Wade. This unpredictability casts doubt on the future of First Amendment protections for adult entertainment. Murray pointed out that states like Texas are already pushing boundaries by enacting new laws, including fees on adult venues and raising the minimum age for workers in these establishments to 21. Texas is also questioning whether nude dancing should receive First Amendment protection, indicating a possible shift in legal standards.
In addition to these legal challenges, Murray sounded the alarm over Project 2025, a conservative initiative aimed at criminalizing pornography and prosecuting those involved in its creation and distribution. He cautioned that if a conservative administration assumes power in 2025, the adult industry could encounter even greater dangers. According to Murray, the stakes for the future of erotic expression in the U.S. have never been higher.
Brad Shafer: ‘Crazy’ laws and the potential of being ‘trolled’
Recent Supreme Court decisions have had a significant impact, particularly on businesses. Brad Shafer discussed two critical cases.
Shafer began with the Bostock v. Clayton County, Georgia decision, which extended Title VII protections against sex discrimination to encompass gay and transgender individuals. This ruling has real-world implications for adult club operators, particularly when recruiting dancers. Shafer noted that club operators are increasingly receiving inquiries that appear to be from claimed transgender individuals who may be trying to start lawsuits by seeking to have a club deny a request to audition. Given the recent changes in the law, club owners and operators need to consider their options. Denying auditions or the right to perform could result in lawsuits or discrimination claims. Making recruiting decisions based on someone’s anatomy in the past was easier, but the Bostock ruling may alter that approach.
“My firm has recently been inundated with calls from club owners about people reaching out to ask if they can come and audition,” Shafer explained. “The club typically says yes. The caller then asks, ‘Well, I’m a transgender person. Can I still come?’ If the answer is no, the club could risk a discrimination lawsuit or a claim by the EEOC or the state civil rights department, which might ultimately result in litigation. As Shafer noted, “These calls may actually be by a person intentionally ‘trolling’ to be able to file a lawsuit against you.
“In previous legal panels I’ve done here, people learned what we used to call the ‘Shafer rule’: if someone has an Adam’s apple, they’re not dancing in my club,” he added. “But this decision may change the legal landscape. Your management needs to be aware of this and talk to your lawyers. We just don’t know yet which way the cookie will crumble. The situation is still unclear, and it remains an open issue whether being born female for an exotic dancer performing for men can be considered a ‘bona fide occupational qualification’ (BFOQ), which would be an exception to the anti-discrimination laws.”
“This is a batsh*t crazy law. We negotiated this over three years and managed to secure a few positive changes. Until now, clubs in Washington State have not been able to obtain liquor licenses, but we were able to change that. We also eliminated some of these long-standing buffer zones between dancers and patrons.”
– Brad Shafer
Shafer then discussed the recent Loper decision (Loper Bright Enterprises v. Raimando), which overturned the long-standing Chevron precedent. For 40 years, federal courts had deferred to the expertise of administrative agencies when interpreting regulations. The Supreme Court has now stated that courts can make their own determinations without relying on agencies. This shift could have significant implications for businesses, particularly in cases relating to labor regulations. Shafer pointed out the changing rules under different administrations regarding the distinction between employees and independent contractors. Since Congress never established a clear test for this distinction, agencies have issued conflicting regulations under different Presidents that courts might just now ignore, so these regulations are now vulnerable to challenge following the Loper decision. Business operations will likely remain unsettled as courts and agencies navigate these changes.
Washington State recently enacted a so-called “dancers’ rights” bill that mandates clubs to train staff and entertainers on such things as anti-trafficking, sexual harassment, and de-escalation techniques. While Washington is currently the only state with this law, similar legislation could be coming to other states. Brad Shafer was asked what effect this could have on adult clubs.
Shafer remarked, “This is a batshit crazy law. We negotiated this over three years and managed to secure a few positive changes. Until now, clubs in Washington State have not been able to obtain liquor licenses, but we were able to change that. We also eliminated some of these long-standing buffer zones between dancers and patrons.”
Clubs in Washington — this is a statewide law — will now be required to hire third-party trainers for their dancers. Other states may soon follow suit with similar regulations. Additionally, panic buttons must be installed in dance booths to enable dancers to quickly report customer issues. This requirement, already in place in cities like Minneapolis, aims to combat sexual harassment and assault claims. Clubs elsewhere should proactively prepare for these upcoming changes.
If a dancer submits an affidavit accusing a customer of harassment, that customer will face a three-year ban from the club and any ‘affiliated’ venues. The law does not even give a customer the right to contest the dancer’s affidavit. Additionally, there are new restrictions on lease and license fees. The law limits lease fees to what the entertainer makes in an eight-hour shift and caps licensing fees at $150 or 30% of the entertainer’s earnings, excluding private performance areas. These regulations may significantly affect how clubs manage their businesses.
A surge of new human trafficking laws aimed at adult clubs is expected to spread rapidly across the country; currently, three states — Florida, Louisiana, and Texas —have age restrictions for employees and entertainers in adult establishments. J. Michael Murray was asked to elaborate on this.
“New laws in states like Florida, Louisiana, and Texas,” noted Murray, “prohibit adults aged 18 to 20 from working in adult businesses, even though they can vote and serve in the military. These laws are intended to combat sex trafficking. Still, evidence suggests that the primary venues for trafficking are the Internet, hotels, and illegal massage parlors, with adult nightclubs playing a minimal role. The adult nightclub industry, through COAST, has been actively working against trafficking.
“We’re currently awaiting a decision in an 11th Circuit case argued by Gainesville Florida First Amendment attorney Gary Edinger regarding a Jacksonville ordinance that bans adults from dancing in adult nightclubs,” explained Murray.
“I also have a case going up to the Fifth Circuit,” Murray noted. “These laws will be tested, and we expect to establish some legal precedent. We hope to get some favorable decisions; otherwise, these rulings could proliferate nationwide, which is unjust for adults under 21. So it’s important to be vigilant and pay attention.”
In part two of this two-part report on the Expo Legal Panel in the January 2025 issue of ED Magazine, we’ll hear from Devon Lyon and Jeffrey Kimmel where the topics will include:
Does the Loper decision mean that there are no longer any labor laws? What’s the current state of arbitrations based on recent decisions? Should clubs still have them with employees and entertainers, and if so, what’s critical to include? How do sexual harassment claims relate to arbitration agreements, and what can clubs do to mitigate that?
Stay tuned!
This article briefly summarizes extremely complex legal issues, is provided for general information purposes only, and is not intended to provide either an exhaustive analysis of these matters or any specific legal advice or recommendation. Laws vary by state and municipality. The positions and opinions expressed by the attorneys represented here are theirs alone and do not necessarily reflect those of ED Publications. Club operators and others are strongly encouraged to consult their attorneys and accountants for specific advice on how these issues will affect their businesses and what measures to take. Larry Kaplan and ED Publications do not guarantee the accuracy of this information.
Larry Kaplan has for 24 years been the Legal Correspondent for ED Magazine. Mr. Kaplan is a broker in the sales and purchase of adult nightclubs and adult retail stores, a Principal in Strategic Club Consultants adult nightclub concierge customer service and security training and consulting entity, and the Executive Director of the ACE of Michigan adult nightclub state trade association. Contact Larry Kaplan at 313-815-3311 or larry@kaplanclubsales.com.
Contact Jeffrey Kimmel at 212-259-6435 or jeffrey.kimmel@akerman.com
Contact Devon M. Lyon at 562-216-7382 or d.lyon@lyon-legal.com
Contact J. Michael Murray at 216-781-5245 or jmmurray@bgmdlaw.com
Contact Brad Shafer at 517-886-6560 or brad@BradShaferLaw.com
