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Best of Howard Stutz

Gaming Guru

Howard Stutz

Union: 'Myriad' issues with MGM Mirage

29 June 2007

LAS VEGAS, Nevada -- A disagreement on how MGM Mirage and Culinary Union Local 226 would structure future wage increases for 21,000 employees covered under a collective bargaining agreement has emerged as the major sticking point to resolving current contract negotiations, according to an internal company memorandum.

But Culinary leaders, who also obtained a copy of the memo, said topics beyond the economic components, such as job security, are still being negotiated and have stalled any sort of agreement with the largest single employer of the union's membership.

"There are a myriad of issues still out there that need to be discussed," Culinary Secretary-Treasurer D. Taylor said Thursday. "I'm mystified by them saying there is just one issue delaying an agreement."

Cindy Kiser Murphey, MGM Mirage's senior vice president of human resources, told the company's senior management Wednesday that the union and the hotel-casino operator are at odds over the economic package currently on the table.

The union is seeking "cents-per-hour wage increases" based on future estimated economic conditions. Murphey said the company countered with a 10-year contract proposal calling for wage increases based on the Consumer Price Index.

She said the proposal is similar to language in the 10-year agreement the Culinary signed with Wynn Las Vegas in April 2005.

"The union flatly rejected our proposal and refused to even discuss their use of the Wynn formula with us," Murphey said in the memo. "Instead, the union countered our economic proposal with two different economic proposals, presented as 'either-or' options."

The most recent talks between the Culinary and MGM Mirage on a contract covering 10 Strip resorts took place June 22. An MGM Mirage spokesman said Thursday a new bargaining session hadn't been set, but talks between subcommittees on smaller issues were ongoing.

Murphey told MGM Mirage management the company and union had reached tentative agreement on more than 80 different smaller issues.

Contracts covering some 50,000 Strip and downtown hotel, casino and restaurant employees represented by the Culinary and its affiliate, Bartender's Local 165, expired on May 31. Extensions were granted as union leaders and hotel operators continued negotiations, which began in March.

The Culinary and Harrah's Entertainment struck a new five-year agreement on June 16, and it was ratified a day later. The contract gave some 15,000 workers at six Harrah's-operated casinos average raises of 3.7 percent per year over the life of the contract.

Murphey said the union offered MGM Mirage the same cents-per-hour wage increases agreed to by Harrah's. The other offer was a formula that tied wages to cash flow increases at each MGM Mirage resort.

"When we asked across the table for some explanation as to why the Wynn formula was not considered, union leadership refused to comment," Murphey said. "Our negotiating team asked six different times for some indication as to why the union would not even consider providing us with the same rate structure agreed to with one of our closest competitors. Each time the question was asked; it was refused or deflected with no indication as to why."

Taylor said MGM Mirage employees decided they didn't want the Wynn contract's economic package and were in favor of having set raises each year of the agreement. He said the Harrah's contract addresses that issue. Meantime, he termed the proposal that would tie employee salaries to cash flow as "creative."

Union leaders were hopeful MGM Mirage would agree to other parts of the contract signed with Harrah's Entertainment, which included rights for workers who are called up for military service and created a contractual career ladder so workers can elevate their job duties and responsibilities.

Taylor said MGM Mirage is moving toward an increased number of joint-ventures as way of growing the company. In addition to partnership with hotel and condominium developers at the $7.4 billion CityCenter, MGM Mirage announced a joint venture project with Kerzner International Holdings last week to build a multibillion-dollar resort on the northern end of the Strip.

"The question is whether or not MGM is excluding its employees from prospering because of this change," Taylor said. "We also don't have agreements on successor language or survivorship, should they sell one of their properties. These are obviously issues that are important to our members."

The contract signed with Harrah's allowed the union to represent workers employed at condominiums, hotels, and condo-hotels that are joint-venture partners with the casino operator.

That issue was not addressed in Murphey's memo.

She said the MGM Mirage negotiating team is confused by the union's tactics. Murphey said the company believes the Wynn contract formula for the economic package and a 10-year contract are both in the employees' best interests.

Union: 'Myriad' issues with MGM Mirage is republished from