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Howard Stutz

Lawsuit on tip pooling at Wynn thrown out

7 December 2006

LAS VEGAS, Nevada -- A District Court judge on Wednesday tossed out a lawsuit brought by two dealers from Wynn Las Vegas who sought to end the Strip casino's recently implemented and much debated tip pooling policy. Attorneys for the dealers said they plan to appeal the ruling to the Nevada Supreme Court.

In his decision, Judge Douglas Herndon said there was no contract of employment between the dealers and Wynn, which meant that Nevada law allows an employer to change any tip pooling policies. Herndon noted that the company was not taking away tips, only widening the pool of workers who share in the gratuities.

"The judge followed the same arguments and agreed with the case law that we had cited previously," said Brian Cohen, a senior associate with Kamer Zucker & Abbott, the Las Vegas law firm that researched the applicable law related to the plan devised by Wynn executives. Lawyers for the casino had previously called the policy "ironclad" and said the company was acting within the law in implementing a new tip pooling program for casino dealers.

"The court outlined in every way that Wynn was within its right to change its tip pooling policy," Cohen said. "It was legal under the law, and the court agreed with our interpretation."

Reno attorney Mark Thierman, who represents the dealers along with Las Vegas attorneys Leon Greenberg and James Kemp, said that an appeal would be filed with the Nevada Supreme Court, but that it could take up to six months or a year for the matter to be heard.

Thierman believes the judge erred in his ruling.

"Basically, what the court said was that individuals can't sue for their own tips. That's ridiculous," he said. "An employer can't take back somebody's money and put it in their own pocket."

In September, Wynn began the tip pooling program, in which table game supervisors shared in the tips earned by dealers. Wynn executives said the move was done to correct what had been a widening disparity between the wages earned by dealers and casino floor supervisors.

Some dealers at Wynn estimated their annual take-home wages would be cut 10 percent to 20 percent. Table-game supervisors were given a boost in salary and were allowed a percentage of the tips to bring their compensation up to what dealers were earning.

The casino also instituted a bonus program for dealers.

Gaming insiders immediately viewed the move as controversial because it set aside typical casino policy in which dealers collect, pool and distribute among themselves any tips earned on the casino floor. Because Wynn has significant high-end casino play, the range between what dealers earned and what salaried casino supervisors took home was far greater than at other Las Vegas resorts.

Soon after the policy was implemented, more than 100 Wynn dealers formally complained about the program to the State Labor Commissioner, who rejected their protests on Sept. 13. That same day, two Wynn dealers filed a lawsuit in District Court and sought class-action status on behalf of more than 500 dealers affected by the new program.

The dealers, Daniel Baldonado and Joseph Cesarz, said the casino's policy violated Nevada state law covering tip pooling. The lawsuit asked that the tip pooling program be halted and the dealers be paid any wages they lost because of the policy.

Baldonado and Cesarz are still employed at the casino.

Ruling from the bench, Herndon dismissed the complaint, saying case law that dealt with changes to tip pooling at Caesars Palace almost two decades ago was sufficient language for Wynn to implement a new program with its dealers.

The crux of the matter, Thierman said, was taking a portion of the dealers' tips and giving the money to casino supervisors.

"The supervisors are not there for customer service," he said. "They are making sure the dealers are doing their job. With this (tip pooling program), you get divided loyalties."

Before dismissing the lawsuit, Herndon granted the case class-action status. He also removed Wynn Resorts Chairman Steve Wynn and Wynn Las Vegas President Andrew Pascal as defendants in the lawsuit.

Pascal, who attended the hearing, said afterward that he hoped the dealers would end the legal action. Company leaders, he said, thoroughly researched the issue before implementing the new policy.

"We were comfortable and continue to feel comfortable that nothing illegal is being done," Pascal said. "We hope today's ruling, along with the Labor Commissioner's ruling, sends a message to our employees that we were within our legal rights, and we want to move forward and not look backward and make the best of the current situation."

Pascal said the casino has not lost any dealers because of the new policy. He added that more than 30 dealers have applied for open casino floor supervisory positions.

Since the program was enacted, dealers throughout Las Vegas have expressed concern that other casinos might follow Wynn's lead. The day after Thanksgiving, several dozen dealers marched in front of Wynn Las Vegas in protest of the tip pooling program.

So far, no other casino operators have moved toward enacting a similar policy.

"We've been on record that we wouldn't implement the program," said MGM Mirage spokesman Alan Feldman, whose casino company operates 10 Strip resorts.

On a Web site maintained by Wynn dealers to inform fellow dealers about any events in the case, a statement said the lawsuit would continue despite Herndon's ruling.

"Overall, how did it go? It was a first step and it's definitely not over," said a posting on "We've known the whole time that no matter who lost, the case would be appealed to the state Supreme Court. We've had our practice and now we've seen what we're up against."