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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Different times, new contract talks

7 February 2007

LAS VEGAS, Nevada -- The corporate landscape has changed dramatically in the five years since representatives of Culinary Workers Local 226 and Las Vegas' hotel-casino industry sat down to reach collective bargaining agreements in 2002.

With contracts covering some 50,000 Strip and downtown hotel and restaurant service employees, such as bartenders, cocktail servers, waiters, housekeepers and maids, set to expire June 1, the Culinary wants to know how the ownership changes and proposed private equity buyouts over the past few years will affect negotiations.

"I think the (gaming) industry is going through a monumental change, and we're not quite sure what that means," Culinary Secretary-Treasurer D. Taylor said Tuesday before the first of two planned meetings at the Cashman Center with more than 1,000 members of the union and the organization's leadership who will be involved in the negotiations.

In 2005, two of the largest casino operators swallowed up their next two biggest rivals. Also, two major casinos were gobbled up in private equity deals and the industry's largest casino company could go private by year's end in one of Wall Street's largest-ever leveraged buyouts.

For the Culinary, the state's largest labor union, it's still unclear how ownership changes will affect negotiations.

Taylor said he told several corporate gaming officials about Tuesday's meeting with union members and that he was hoping negotiations with the hotels could begin early.

"Obviously, people have a lot of concerns because of the leveraged buyouts," Taylor said. "We now have a legislative session going on and, frankly, we want to find out sooner rather than later which companies want to have a deal and which companies want to have a fight."

Union representatives said it is too early to say what the organization will be seeking for contract length, cost of living increases, or health and welfare benefits. In 2005, the Culinary signed a 10-year contract with Wynn Las Vegas that has cost of living increases built into the deal.

Hotel employees who will participate in the contract talks said they didn't want to lose any benefits they gained in the last contract negotiating session.

Patricia Lindsey, a guest room attendant at Bellagio, said the cost of living in Las Vegas has gone up since the last contract was signed and she and other workers want to maintain their lifestyle.

"I have one thing in common with every other (guest room attendant)," Lindsey said. "I want my health care, I want my wages and I want my job security. I want to be able to stay at the standard I'm at. I don't want to lose anything."

Corporate changes since the last contract have been dramatic.

MGM Mirage bought the Mandalay Resort Group for $7.9 billion in April 2005, giving the company 10 Strip resorts. Two months later, Harrah's Entertainment spent $9 billion to buy Caesars Entertainment, giving the company control of six Strip casinos. In December, Harrah's agreed to be purchased for $27.8 billion by two private equity groups.

Meanwhile, the Las Vegas Hilton was purchased in 2004 by private equity group Colony Capital for $280 million while the sale of the Tropicana's parent corporation to privately held Columbia Sussex for $2.75 billion was completed in January.

The ownership of several downtown casinos also changed hands.

"We'd like to get things going early," Taylor said. "We want to know what the issues are."

He said the union hopes to avoid the troubles that befell the Atlantic City Culinary local in 2004, when more than 10,000 workers walked out in a monthlong strike against seven Atlantic City casinos. The dispute involved wages and the length of the contract.

MGM Mirage spokesman Alan Feldman said his company supported early negotiations.

"By working in collaboration with the union, we have many ways our employees can benefit," Feldman said.

"Topping the list of issues during this contract negotiation is the fact that we all need to make certain that health care is accessible and affordable for our employees and that we find ways to increase the quality of health care," he also said.

Officials for Harrah's Entertainment declined comment.

Hotel employees who will be participating in the negotiations aren't concerned about the ownership changes.

Robert Martinez, a waiter at Caesars Palace for the last 10 years who now works in the recently opened Rao's, said his goal is to negotiate a contract that secures his and other employees' well-being.

"I've been working at Caesars Palace for about 10 years and we've been under six different ownerships," Martinez said. "As far as I can tell, the buyout doesn't really change the facts. The bottom line is that regardless of who owns what property, those owners have to give back to the community and provide for the workers to survive in that community."