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Best Week, Worst Week: Exotic dancers win big money; T. Rowe Price out big money

Dancers at two Prince George’s County strip clubs got some welcome news this week with a victory in court and a huge payday, while an error during a proxy vote will take a big chunk out of T. Rowe Price’s wallet.

Legal affairs writer Steve Lash reported Wednesday that the owner of two Prince George’s County strip clubs owes his dancers at least $267,000 in unpaid wages under the federal Fair Labor Standards Act and corresponding Maryland wage laws because they were employees and not independent contractors – as he had erroneously asserted.

The unanimous 3-0 decision by the 4th U.S. Circuit Court of Appeals rejected the argument that they were contractors, and not employees, saying the clubs’ management exercised the stringent control over the dancers’ work schedules and job duties that the state’s employment laws associate with an employer-employee relationship and which bear little resemblance to the latitude normally afforded independent contractors.

The court was also careful to make the distinction that a worker does not necessarily become an employee covered by the FLSA the moment a company exercises any control over him, but they ruled in the dancers’ favor because the degree of control the clubs exercised over all aspects of the individual dancers’ work and of the clubs’ operation argued in favor of an employer-employee relationship.

Meanwhile, mistakes made through a computer error during a proxy vote associated with the 2013 leveraged buyout of Dell Inc. will cost T. Rowe Price $194 million.

Business writer Adam Bednar reported Monday that the firm will make a one-time payment in the second quarter that will be funded with available cash. The move will reduce net income, after tax, by roughly $118 million, which breaks down to 46 cents in diluted earnings per share of common stock.

Despite the error and resulting misfortune, T. Rowe Price officials stepped up and took ownership of the mistake. Business writer Anamika Roy reported on Wednesday that no one would be fired because of the computer error.

When news of T. Rowe’s error broke, a compensation plan was announced just four days later. Industry watchers say the company’s response was quick, but consistent with its operational style and long history of putting the clients’ interests first. Company officials said Tuesday that the firm is taking steps to prevent future mistakes and they are not concerned with potential client loss over the incident.