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Best of Liz Benston

Gaming Guru

Liz Benston

Culinary, Boyd in Legal Bout

23 March 2005

LAS VEGAS – For years the powerful Culinary Union in Las Vegas has failed in its efforts to organize the solidly nonunion locals casino market.

But experts said Boyd Gaming Corp.'s 2004 takeover of locals powerhouse Coast Casinos appears to have given the union a chance to more easily organize a few of the valley's most successful locals casinos: Suncoast, Orleans and the Gold Coast.

The union that represents about 50,000 maids, cocktail waitresses and food servers at Strip and downtown casinos is now locked in a tough legal dispute with Boyd Gaming over whether the union can use an existing labor agreement with Boyd's Stardust to force the company to remain neutral while the union tries to organize the three nonunion Coast hotels.

Both sides clammed up, declining to discuss the dispute. Boyd and the union have enjoyed cordial relations in recent years, with the company helping to broker a deal to avert a possible downtown casino strike in 2002.

But the dispute is revealed in court filings.

The stakes are high, according to legal experts. If the union wins, a large number of nonunion casinos that cater to locals could more easily be unionized. If Boyd wins, a new area of still-murky labor law could become clearer, giving the company greater control over the union's efforts to organize workers across Las Vegas.

It's a tricky balancing act for both Boyd and the Culinary, which have signed contracts at several Boyd properties and do not want to upset the labor peace they have achieved so far.

The Culinary represents workers at the Stardust and Barbary Coast on the Strip and the Fremont and Main Street Station casinos downtown. But it doesn't represent thousands of workers at Boyd's Sam's Town or at Coast's Gold Coast, Suncoast and Orleans properties.

The Culinary has also failed to organize the valley's biggest locals operator, Station Casinos Inc.

"This is not solid ground for either side," said one local lawyer familiar with the case who declined to be named. "The state of the law right now is in flux and I think both sides don't know where this is going to land. Neither side wants to declare nuclear war by making public statements."

The court case centers on one of the hottest national debates in labor law -- whether unions can use labor agreements to help organize other properties obtained through mergers and acquisitions.

In a lawsuit filed a month after Boyd Gaming bought Coast Casinos for $1.3 billion, the Local Joint Executive Board of Las Vegas, representing the Culinary Workers Union Local No. 226 and its sister organization Bartenders Union Local No. 165, filed suit against Boyd in federal court to force the company to arbitrate an alleged violation of a collective bargaining agreement with Boyd's Stardust property.

The Culinary union referenced a "neutrality agreement" at the Strip property allowing union organizers to organize Stardust workers without employer interference. The agreement, according to the union, "allows union organizers to have access to nonwork areas and to employer records showing employees' names and addresses, requires managers to stay neutral about employees' decision to unionize and provides for the union to be granted recognition based upon proof of majority employee support through signed union authorization cards," among other things.

In a letter addressed to Boyd Gaming officials the day after the Coast deal was consummated, the union contends that other Boyd properties are likewise bound by the neutrality agreement signed by the Stardust in July 2003. Boyd disputes that interpretation.

In September, Boyd fired back at the Culinary with a motion to dismiss the lawsuit. Boyd said the parent company and the Coast properties were not a party to the agreement signed by the Stardust, which is operated as a subsidiary company of Boyd.

"By misapplying the terms of the Stardust neutrality agreement to Boyd, the union is attempting to gain unbargained for organizing advantages at certain hotels and casinos owned and operated by Coast Hotels and Casinos Inc. which are unmistakably outside of the agreement's scope," the court filing said.

In court, the union said Boyd is bound by the contract in part because Boyd officials were actively involved in labor negotiations at the Stardust and the parent company also benefited from the Stardust agreement.

"The agreement contains provisions protecting Boyd from union claims upon specified other operations owned by Boyd ... no exemption was negotiated, however, for Boyd's acquisition of Coast Hotels."

The union also claims its agreement with the Stardust defines employer "to include more than just the Stardust but also any parent company such as Boyd."

Neutrality agreements are the subject of multiple disputes now before the National Labor Relations Board; several employers have charged that such agreements go too far by making it too easy for a union to bypass an election.

Most Strip resorts have been unionized through a card check procedure, a process by which employees sign union authorization cards rather than submit to a secret-ballot election. The union prefers the card check to an election, contending that workers can be deceived by anti-union campaigns prior to an election. Even if the vote favors the union, a company can delay negotiating a contract for years, union officials have said.

Employers favor elections because they claim that workers can be coerced and even duped by unions into signing union authorization cards. Elections are overseen by the National Labor Relations Board and allow the union and the employer to conduct an information campaign in the weeks leading up to the vote.

Some employers have chosen to recognize the cards as a way to maintain friendly relations with the union. Other properties including the Palms and the Venetian have touched off feuds with the union by refusing to submit to a card check.

Neutrality agreements, which have become more common in recent years on the Strip, also are hotly debated. Such agreements often appear together with contract language requiring a company to recognize the union if more than half of its employees sign union authorization cards.

Both labor unions and employer groups have tried to persuade Congress to tweak labor law. Unions have backed a bill that would require employers to recognize a union through a card-check procedure.

Employers now can refuse to accept card checks.

And employers have backed a separate bill allowing workers to demand a secret-ballot election.

For its part, Boyd Gaming is putting up a fight.

While the company's motion to dismiss the union suit is still pending, Boyd put pressure on the union by filing two unfair labor practice charges with the National Labor Relations Board in December. The company and its Coast subsidiary allege that the union has violated federal labor law by depriving employees of their right not to join a union and for trying to change the terms of a collective bargaining agreement.

In a similar charge filed in February, Boyd said the union's lawsuit is illegal and makes an attempt to "limit future investments by Boyd."

Those charges are still under investigation.

Las Vegas employment attorney Howard Cole said the union faces an "uphill battle" trying to convince a court that a neutrality agreement with the Stardust applies to other Boyd properties.

The Culinary union devoted a significant chunk of money and resources several years ago to organize off-Strip casinos and "failed miserably," said Cole, who represents casino properties.

Using a similar argument, the Culinary nevertheless won the right to organize the Rio after the resort was purchased by Harrah's Entertainment Inc.

The union in 2000 filed suit in state court to order Harrah's to honor a card count at the Rio to determine support for the Culinary.

The union argued that a contract with the company's Harrah's Las Vegas property contained language saying employees of other properties owned by Harrah's -- including the Rio -- must be considered part of the Harrah's Las Vegas bargaining unit that is subject to a card check.

Harrah's argued that the Rio, operated as a separate subsidiary, wasn't bound by the agreement with Harrah's Las Vegas.

A state judge handed the union a legal victory in 2001 by ordering Harrah's to conduct a card count at the Rio.