King Arthur's Lounge misclassified the strippers as independent contractors, depriving them of wages and tips since 2004, Suffolk Superior Judge Frances McIntyre ruled Monday.
The lounge required each stripper to pay $35 to perform each night and kept $10 of every $30 a stripper made for dancing in private booths, The Boston Globe reported Tuesday.
McIntyre rejected the club's argument that alcohol sales, not strip shows, were its main business and the strippers, therefore, were contractors providing entertainment similar to pool tables at a sports bar.
The suit was brought by Lucienne Chaves, 32, a former stripper at the club, said Shannon Liss-Riordan, a Boston lawyer handling the case. The strippers were treated like indentured servants, considering the $35 fee they had to pay to perform, Liss-Riordan said.
Robert R. Berluti, King Arthur's lawyer, said the club may appeal McIntyre's ruling.