May 11 (Bloomberg) -- When companies resolve class-action suits, they typically tell people about the settlement by postcard or in publications such as the Wall Street Journal, USA Today or the New York Times.
Stripper Web and Xtreme magazine weren’t the usual vehicles for delivering the news -- until now.
A federal judge in New York approved the parties’ plan to use those publications to notify 1,245 current and former exotic dancers of an $8 million settlement in a wage-and-hour class action against Manhattan’s Penthouse Executive Club.
The agreement would resolve a group of suits, first filed in 2009, over claims the Penthouse Club shortchanged dancers by classifying them as independent contractors rather than employees. The club also owes dancers minimum wage and overtime pay, the dancers claimed.
U.S. District Judge Kimba Wood, who preliminarily approved the deal April 29, signed off on a plan by the parties May 9 to use Stripper Web, an online forum that includes reviews of strip clubs, and Xtreme, a “free guide to local adult entertainment.” Wood’s one-page order was made public May 10.
The Stripper Web and Xtreme notices will supplement settlement alerts mailed to the last known address of each dancer in the class, according to court papers.
Stripper Web didn’t respond to an e-mail seeking comment on the plan. A phone call to Xtreme wasn’t returned.
Campaigns to contact class members can include direct mail and publication in magazines including People and National Geographic, Todd Hilsee, whose Hilsee Group LLC offers consulting services on class notification, said in a phone interview. Class members are also targeted on social media and websites. A successful notice campaign can reach from 70 percent to 95 percent of class members, he said.
“There’s no ‘usual’ anymore,” Hilsee said. Hilsee said he hadn’t heard of Stripper Web or Xtreme.
“Major publications, where there are large audiences, are going to reach a large swath of the target audience,” Hilsee said.
Wood will hold a hearing on the fairness of the settlement on Sept. 18.
The case is In re Penthouse Executive Club Compensation Litigation, 10-cv-01145, U.S. District Court, Southern District of New York (Manhattan).
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