Denver is investigating three strip clubs over claims of wage theft.
It’s also the first time the Denver Auditor’s Office is using expanded subpoena powers granted by Denver City Council in April.
Auditor Tim O’Brien and labor advocates said at the time that subpoena power is key for investigating wage theft. It allows investigators to get full payroll records and find other victims of wage theft at a workplace beyond an individual complainant.
Now, the new policy will be put to the test. The three strip clubs — PT’s Showclub, Diamond Cabaret and PT’s Centerfold — have a week to respond to the subpoena or face fines up to $1,000 per day.
In a statement to Denverite, a lawyer for the clubs denied the claims and called the subpoena unlawful overreach.
The strip clubs are under investigation for potentially misclassifying workers.
The auditor’s office said in a statement Tuesday that the clubs failed to provide employee contracts, contact information and payment records.
“It’s a win for Denver’s workers that we had this process in place in time,” O’Brien said in a statement Tuesday. “This is the first time we are using this subpoena power and without it we would be unable to conduct our investigation into whether dancers’ rights are being violated.”
The auditor’s office is trying to figure out if the club owners misclassified workers as non-employees to avoid providing overtime, paid sick leave and proper minimum wage and tips.
The clubs deny the claims and say the subpoenas are overreach that could jeopardize the privacy of employees.
"The subpoenas are overreaching, unjustified, and exceed the authority granted to them under the applicable ordinances," wrote attorney Ruth McLeod in a statement to Denverite. "It is essential to emphasize that Denver Labor has not identified any actual wage theft, yet they continue to unlawfully demand excessive documentation, which creates an undue burden on the Clubs."
McLeod said the subpoenas could expose employees at the strip clubs to harassment or public exposure, and called the move "an alarming abuse of power" and a waste of taxpayer dollars.
As part of the new legislation from city council, subpoenas in cases like this go before an independent hearing officer.
"The independent hearing officer specifically found the subpoena would not be an undue burden to the employers in this case," said Tayler Overschmidt, spokesperson for the auditor's office. "They noted that Denver Labor offered adequate guarantees of the confidentiality of personal information."
Denver has been aggressively investigating wage theft in recent years.
After the city council passed more labor protections for workers in 2023, the city recovered more than $2 million in stolen wages that year — a record high and nearly double the amount in 2022.
Recently, the auditor’s office has been cracking down on companies misclassifying workers to short their pay and benefits.
Have a story about wage theft at your workplace? Our inbox is open.
In August, the office found that a national staffing company owes more than $2.3 million in fines and restitution, claiming the company misclassified staff as contract workers. That company is currently suing the city over the claims.
The strip clubs have until Sept. 24 to respond to the subpoena. McLeod said the companies will fight the move in court.
"We are committed to ensuring that this investigation proceeds within legal and reasonable boundaries and fully intend to bring Denver Labor to answer before the district courts in vehement defense of its legal and ethical business practices," she said.
Editor's note: This article was updated at 5:36 on Sept. 17 to include comment from the clubs' attorney.
