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Rod Smith

Harrah's Las Vegas, Atlantic City Union Issues May Intensify

21 October 2004

LAS VEGAS -- The simmering confrontation between Culinary Local 226 and Harrah's Entertainment's more than 10,000 striking casino workers in Atlantic City is far more likely to intensify than end any time soon, union and company executives said Wednesday.

The striking union bartenders, cocktail servers, housekeepers, porters, food servers and counter servers walked off their jobs Oct. 1 at seven Atlantic City casinos, including two owned by Harrah's. Three others are owned by Caesars Entertainment, which Harrah's is planning to buy for $9.4 billion.

The critical issue is the union's demand for a three-year contract extension so hotel workers' contracts in Las Vegas and Atlantic City would end at the same time.

"Despite the inconvenience the labor action (in Atlantic City) creates, Harrah's is not willing to concede on the contract link," Harrah's President Gary Loveman said in a Wednesday conference call to discuss the company's third-quarter earnings. "I worry about their capacity to strike me everywhere at the same time. What they would like to do is set it up so they could do that. That's what (the strike) is all about, (and) we'll just have to wait it out.

"We will stand firm in this position no matter how long this unfortunate situation persists. We will not ratify a contract that threatens the health of our company and that of the industry broadly. We are not willing to take a contract that supports union leaders' interests at the expense of our employees and colleagues in Atlantic City."

Paul Rubeli, chairman of Aztar Corp. which owns the Tropicana in Atlantic City, which also has been struck, said he fully supports all of Loveman's comments about waiting out the strikers.

Otherwise, he declined to answer questions about the walkout during a 45-minute conference call with Wall Street analysts.

Loveman said Harrah's greatly values its employees; he said they are a major part of why his company is the leader in casino entertainment.

"That's why we offered our workers an 11 percent (wage) increase over five years. We've accepted all terms except the linked contracts," he said.

Culinary Local 226 Secretary-Treasurer D. Taylor denied Loveman's claim that the company has agreed to all of the union's other demands and has made a generous wage offer.

"It's always a bad situation when you believe your own propaganda rather than hear the facts," he said.

Taylor said the wage issue isn't settled and that 11 percent, barely 2 percent a year, isn't a generous offer. Two other issues, subcontracting to nonunion shops and health benefits, also remain to be settled, he said.

Taylor said all of MGM Mirage's contracts, including the one covering the Borgata in Atlantic City, run simultaneously and the company has had no problems with them.

MGM Mirage spokesman Alan Feldman, however, said simultaneous contracts were not an issue when his company's agreements were reached.

Taylor also said Steve Wynn, when he headed Mirage Resorts, always had simultaneous contracts among its properties and never complained.

"Really, this is an outgrowth of the merger. The idea that the world's largest gaming company will be put in jeopardy by housekeepers, kitchen workers and cooks is laughable," he said. "But (Loveman) wants total power and advantage one city at a time and we're working for a balance. That's what a real relationship is about."

Harrah's Chief Operating Officer, Tim Wilmott, said the strike is taking a little bite out of Harrah's earnings so far.

"Midweek volumes have been softer than expected, but weekends have been business as usual year-over-year," he said.

Although he conceded there is a cost to flying 400 managers in chartered plane to Atlantic City to fill in for striking workers, Wilmott said the company is also saving by not having to pay strikers.

Loveman said 10 percent to 15 percent of the company's striking workers have already returned to work despite the walkout.

Harrah's and Caesars have both been running full-page ads encouraging workers to cross the picket lines and return to work, a move that has not worn well with the unions.

Harrah's has placed full-page advertisements in the Las Vegas Review-Journal and the Las Vegas Sun that said the union demand for three-year contracts is not in the best interest of its union workers.

And Caesars Entertainment has run a series of advertisements in Atlantic City newspapers saying workers have been sold out by Las Vegas union bosses.

In its ads, Caesars Entertainment explains how workers can resign from their jobs, return to work and still be entitled to all the benefits covered by the union contracts.

Harrah's Las Vegas, Atlantic City Union Issues May Intensify is republished from