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Editorial

Suffering for their sins
Casino operators' post-9/11 behavior 
gives union the upper hand

By Jamie McKee

It's not over yet-labor-management negotiations in Las Vegas were still ongoing at press time-but expectations are considerably more optimistic now that the Strip's top gaming companies have shown how cooperative they can be.

That wasn't the case just a few weeks ago, when the May 31 deadline for the Las Vegas local Culinary and Bartenders union contracts with area casino-hotels loomed large.

The Culinary union was the first side to take a hard line when it voted to authorize a strike-the first full-scale labor strike on the Las Vegas Strip since 1984-if management didn't meet its demands.

Park Place Entertainment was the first to cave, followed by Harrah's Entertainment, Aztar Corp., Mandalay Resort Group and MGM Mirage. All agreed to the most expensive, longest contract with the union in its history. The union, in turn, extended its deadline by 30 days to negotiate contracts with the other 17 properties.

What happened? How did the union get the upper hand, and why did the operators back down?

Mandalay Bay Senior Vice President Mike Sloan openly expressed his disappointment.

"They got the most expensive contract in history at a time when the industry could least afford it," he told the Las Vegas Sun. "They played hardball, and they won."

But critics say the industry has no one but itself to blame. It created its own public-relations nightmare, they say, when it thoughtlessly dumped workers (over 10,000 of them on the Las Vegas Strip alone) post-9/11, at a time when the entire country was grieving and struggling to recover from the devastating terrorist attacks. To add insult to injury, gaming companies followed up this public-relations faux pas by announcing millions of dollars in bonuses to the top executives who had managed to survive the crisis with their cushy jobs intact.

Meanwhile, their Culinary union counterparts were promoting their willingness to accept pay cuts to help their less fortunate brethren.

It's no wonder, then, that the public sided with the union, which portrayed the Strip operators as scheming, slave-driving tyrants who forced their remaining staff to pick up the slack of a reduced workforce with no additional compensation, and planned to improve their bottom lines by cutting off contributions to workers' health-care benefits.

So the union won. The five-year deal addressed its top priorities: increasing hourly wages by $3.23 1/2 over the course of the contract, maintaining healthcare as a paid company benefit and reducing the workloads of housekeepers.

But what may look like a loss for management isn't, not if it serves a greater purpose. After all, the new Culinary contracts are not the worst-case scenario. A strike would have added untold devastation to Las Vegas' recovering tourist economy.

And the industry can benefit from this experience if its operators learn to become more sensitive to public perception in the future. Hopefully, they'll think twice next time before reacting to one catastrophe by creating another.

This is, after all, only the beginning. Management will have plenty of other opportunities to play the good guy.

But if they don't continue to take advantage of those opportunities, it could very well be the beginning of the end.

The next hurdle is the question of whether the Downtown Las Vegas properties will be able to negotiate more favorable deals than their Strip counterparts. Downtown casino representatives claim their properties should be considered separately because they can't afford the same health coverage negotiated by the top casino companies, while union leaders oppose a "tiered" plan that differentiates one property from another depending upon location.

If the union wins that one, there are predictions it could eventually make some progress with longtime union holdouts like The Venetian, the Aladdin and the Palms, even the Station Casinos locals properties.

The industry executives who have demonstrated their willingness to compromise during this preliminary bout are those who have managed to keep the "big picture" in sight.

When asked about the negotiations, Harrah's Senior Vice President Jan Jones told the Sun, "It was worth the price to allow us to look forward."

They know it's sometimes necessary to lose a few battles if you're going to win the war. 

Jamie McKee, editor and associate publisher, can be reached at 702-735-0446 or at .

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