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Rod Smith

Closed Casino: Waiver Letter Riles Ex-Workers

16 February 2004

LAS VEGAS -- Binion's Horseshoe workers are crying foul over demands they sign a general release against the company in return for limited repayments of medical expenditures.

The workers last week were sent letters, signed by Binion's Horseshoe in-house counsel Angela Runz, asking them to sign a general release relinquishing all claims against the company in return for reimbursement of out-of-pocket payments made to cover medical claims filed under the company's self-insurance plan.

One former Horseshoe dealer who asked not to be named said he and other former employees see demands to sign the general release as another effort by management to "stiff" employees.

"This letter is just another b.s. story to keep from paying us what we're owed," he said.

Eight out of 10 former Horseshoe employees interviewed this week said they would not sign the general release offering to repay out-of-pocket medical expenses because they felt it was "another effort to cheat them."

One local employment attorney and a federal spokeswoman cautioned the former workers about signing the document without legal advice.

Nevada employment attorney Kathy England on Friday warned that workers should never sign such a blanket release and should seek legal advice from independent lawyers before entering any legal agreement.

"A general release (like this) under Nevada law releases everybody from everything," she said. "It's a really bad idea."

A spokeswoman for the U.S. Department of Labor, who declined to comment on the investigation into the Horseshoe's self-insurance program, which was administered by Mediversal, urged employees to call her agency, at (415) 575-4590, ext. 113, for help to clear up the issues involved rather than sign the proposed general release.

Hundreds of Binion's Horseshoe's former workers are owed more than $2.5 million in unpaid medical bills even though the gaming company deducted medical insurance premiums from their paychecks.

Some former nonunion employees, which could number up to 1,000 over the past two years, have been forced to file for bankruptcy protection, have had their credit ratings wrecked and have had to pay health-care costs themselves despite paying for insurance coverage, sources told the Review-Journal.

England said former employees may also be in a position to pursue added complaints beyond the regulators' arm of the Labor Department. Legal action could include bad-faith claims under the medical plan, a breach of contract and good-faith and fair-dealings covenant rules, and the need to protect their rights with legal counsel, she said.

"In Nevada, there's a particular duty if one party is in the dominant financial position. The dominant party is not allowed to take advantage of employees," she said.

Some former employees claim the Horseshoe has explicitly tried to take advantage of its position by threatening the employment status of former employees who want to be rehired.

Two former employees said Runz tried to intimidate them when they contacted her as instructed in the letter.

They claimed she threatened that former Horseshoe employees who refused to sign the general release would not be rehired when Harrah's Entertainment, which is buying the property, reopens the downtown hotel-casino.

Harrah's last month agreed to buy the hotel-casino from owner Becky Binion Behnen for about $50 million, most of it in the form of assumed Horseshoe liabilities, three days after federal marshals closed the 52-year-old property and seized more than a million dollars to help settle debts.

A Harrah's spokesman, however, said the company rejects the alleged intimidation tactics described by former employees and added that progress is being made in talks to cover all workers' medical claims.

"Any claim an employee will not be rehired if he or she does not sign this release is not accurate and not true," Harrah's spokesman David Strow said Friday. "The signing of this release will be irrelevant in the hiring process."

However, he said former employees will have to sign the general release to get their out-of-pocket medical expense reimbursements.

Former employees, who had been told the same thing by Runz, were incredulous they would be required to sign a general release in order to get reimbursements already owed them.

Strow said Runz is also negotiating with medical providers to settle all medical claims filed by former employees under the self-insurance plan.

"Once the transaction closes, all affected employees will be released from claims by medical purveyors," Strow said.

Neither Horseshoe owner Becky Binion Behnen nor Runz could be reached for comment.