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Best of Liz Benston

Gaming Guru

Liz Benston
 

Culinary Union agrees to wage freeze

22 June 2009

LAS VEGAS, Nevada -- Sympathetic to recession-reeling Strip casinos, the Culinary Union has agreed to postpone by one year a wage increase that was supposed to take effect June 1.

The agreement, which is expected to be approved by union members today after months of negotiations, will spread an expected 34-cents-per-hour increase in wages due this year over the remaining years of the contract. That means a big part of the union's hard-won contract struck in 2007 — the wage and benefit increase of $3.47 per hour, spread over five years — survives.

The revised contract affects nearly 40,000 Culinary Union members on the Strip. Workers at Wynn Las Vegas and Encore are covered by a separate, 10-year contract that isn't part of the agreement. Of the major casinos along Las Vegas Boulevard, only the Venetian, Palazzo and Imperial Palace aren't covered by Culinary contracts.

Strip casinos will save tens of millions of dollars in the short term but will end up paying out that money over the long haul.

In return for the one-year delay in wage increases, Strip casinos late Wednesday agreed to several union proposals, including a provision extending recall rights — a requirement that casinos call laid-off union workers back to work, by order of seniority, as soon as positions become available.

"We think this is a very good deal for members," Culinary Union Political Director Pilar Weiss said. "We understand that the economy is extremely strained but we're going to protect jobs and benefits."

Although casinos won't save labor costs, flexibility is important as they face an uncertain future, MGM Mirage spokesman Alan Feldman said.

"All of us are hopeful and feel a certain level of confidence in our longer-term future but we have, in the short term, very serious issues to grapple with related to cash flow," he said.

The negotiations were unlike those in other industries that have asked unions for rollbacks, as well as some meetings in years past between casinos and the Culinary Union that became acrimonious or sparked public debate.

Similar negotiations with downtown casinos are ongoing.

Significantly, this time the union rejected attempts to allow for additional hourly reductions for full-time workers. The revised contract still guarantees a 40-hour workweek for most positions. Many industries, including casinos, have reduced labor costs by replacing full-time workers with part-time employees, who may not be eligible for health insurance and other benefits.

Las Vegas casinos have laid off and reduced hours for thousands of union and nonunion workers in an attempt to cut costs against sinking earnings and slash billions in debt accumulated when business was booming.

Since the recession, an estimated 5,000 of the Culinary's membership of 55,000 in Las Vegas have lost jobs or work fewer hours.

Employers have the discretion to make economic layoffs, Culinary contracts generally prevent casinos from employing part-time workforces that are more than 25 percent union members in any particular job classification.

In addition to increasing recall rights from six months or a year to two years, Strip casinos also agreed to offer five unpaid personal days for Culinary workers and a commitment to resolve outstanding union arbitrations within 120 days.

Arbitrations are disputes that arise between union members and management over a variety of issues including layoffs, job changes and seniority rights.

More recently, workers have filed grievances with the Culinary — a first step in the dispute process — for layoffs that didn't follow union procedures, changes in job stations and tip pooling.

"It's a big deal to have a commitment to expedite these because sometimes they take a long time to resolve and you get a backlog," Weiss said. Settling these cases will help clear up unknowns for workers who are insecure about their job status, seeking reinstatement or owed back pay, she said.

The agreement also extends the five-year contract struck in 2007 by one year, to May 31, 2013. All terms in the 2007 contract will remain the same in the final year except for wages and benefits, which are up for negotiation in May 2012.

The union might be able to negotiate a further increase in wages and benefits if the economy has rebounded by then and can support it, Weiss said.

The plan also would put the MGM Grand on a similar contract cycle as the other Strip casinos. Union members at MGM Grand would receive the same wage and benefits package as workers at the other properties. The Culinary contract at MGM Grand, which was in negotiation since it expired in November 2008, will now expire in November 2013.