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Rod Smith

Atlantic City Casino Workers Temporarily Extend Pact

20 September 2004

The 500-member contract committee of Local 54 of the Hotel Employees and Restaurant Employees union in Atlantic City agreed late Friday to extend its recently expired contract until Oct. 1 while negotiations with gaming companies continue.

In a statement late Friday, the contract committee said it postponed any labor action because it understood how devastating a strike would be for Atlantic City and that it would prefer to work with casino companies to avoid a lengthy and divisive walkout.

Negotiations in Atlantic City have been wrapped around the gaming industry in Las Vegas, with the national hotel employees union trying to get all organized casino properties in major union cities onto the same contract schedule to strengthen its hand in future negotiations.

Contracts in Las Vegas and at the new Borgata in Atlantic City expire in 2007, and the organizing committee said in its statement that it wants the same contract at the other 11 Atlantic City casinos it already has at Borgata.

Contracts for UNITE HERE members, which includes Culinary Local 226 in Las Vegas, typically run five years, but Local 54 in Atlantic City is demanding a three-year contract that would also expire in 2007.

Rank-and-file members last week authorized union leaders to call a strike after the 17,000-member Atlantic City local's contract ran out Tuesday, but members -- mainly bartenders, cocktail servers and cooks -- stayed on the job while talks continued through the week.

On Thursday, more than 5,000 union members from Local 54 and elsewhere staged a solidarity march on the Boardwalk, vowing to remain united in the push for a new three-year contract.

Las Vegas Culinary Local 226 Secretary-Treasurer D. Taylor, who was in Atlantic City Friday and is helping negotiate the East Coast contracts, said last week that having the same contract term as Las Vegas and Detroit is important to the union so it can deal with the industry on a national level.

"The companies are getting bigger and we need to be more unified and together," Taylor said, noting the pending megamergers between MGM Mirage and Mandalay Resorts Group, and Harrah's Entertainment and Caesars Entertainment.

Despite the strike decision Friday, Deutsche Bank analyst Marc Falcone said neither side was ready for a walkout, and he predicted the issues should be settled shortly.

In addition, he said even if there was a strike, the effect on the gaming companies would be minimal because primarily only food and beverage workers were involved and their casinos would remain up and running.

"You'd see some service interruptions (as long as the strike lasts), but there are contingencies in place," he said.

Although the length of the contract is a key union issue, Falcone said there are other issues involved in the negotiations that are important to the companies and the workers.

Health insurance costs, however, hit the companies hardest. The companies want workers to start paying a premium, saving each of the 11 affected Atlantic City casinos an average of $3 million, while the unions are insisting on 100 percent coverage.

Successorship is also a big issue because of the pending megamergers, with the union wanting to make sure existing employees' jobs are protected.

Another issue involves subcontracting, which is of particular concern at the Tropicana because of its plans to subcontract jobs at The Quarter, a new shopping and entertainment complex scheduled to open later this year, to companies that can hire nonunion workers.

The contract committee said in its statement that the companies' plans to expand the use of lower-paying jobs would effectively remove many union workers from the middle class and take away the advantages they have enjoyed from working in the gaming industry.