Union loses claim that it had Santa Fe pact

Grace Leong

Friday, Nov. 3, 2000 | 11:30 a.m.

Paul Lowden's stake

Santa Fe Gaming Corp. Chairman and Chief Executive Paul Lowden has increased his stake in the company to 70.8 percent, following a series of share purchases.

From June 16 to Oct. 18, Lowden purchased 112,769 shares of Santa Fe stock on the open market. Lowden paid prices ranging from $2.94 to $5.25 per share.

Lowden now controls 4.65 million shares of Santa Fe stock.

Santa Fe Gaming sold its flagship property, the Santa Fe hotel-casino in northwest Las Vegas, to Station Casinos Inc. in October for $205 million. The company still owns and operates the Pioneer Hotel & Gambling Hall in Laughlin, and holds land on Las Vegas Boulevard for possible future development.

The National Labor Relations Board has dismissed the Culinary Union's charge that the Santa Fe hotel-casino reneged on what the union claimed was a new labor contract it signed, just as the property was being sold by the Lowden family's Santa Fe Gaming Corp. to Stations Casinos Inc.

The union, which claimed three years of negotiations ended on July 14 when four local unions -- Culinary, Teamsters, Bartenders and Operating Engineers -- accepted a contract first proposed by Santa Fe Gaming in January, filed an unfair labor practice charge on Aug. 10, alleging the Santa Fe "refused to bargain in good faith by failing to implement the parties' agreed-upon collective bargaining agreement."

This alleged new three-year contract, which the union claims became effective upon its acceptance, was to have raised wages by between 15 and 25 percent for 750 Santa Fe workers in 30 job classifications.

But the NLRB disagreed. "While the union contends that on July 14, 2000, it accepted the (Santa Fe's) offer, the evidence reflects that there was never a clear understanding of the entire contract between the parties," wrote Cornele Overstreet, the NLRB's regional director, in a letter Tuesday to Culinary attorney Richard McCracken.

"The investigation discloses that the parties had reached an agreement on a number of issues, including an accord that all agreed-upon issues were tentative until a 'total package had been reached,"' Overstreet said. "The evidence also failed to establish that any agreement had ever been reached between the parties on an effective date for a contract."

"The evidence does not establish that a 'total package' capable of acceptance by the union had been reached by July 14, 2000. In this regard, there were mandatory and non-mandatory subjects under discussion on which there was either no (Santa Fe) offer or no last offer having been made," he said.

"Thus, those subjects, which include health insurance, pension, subcontracting and successorship, remained undefined as to scope or mutual interpretation. ... Under these circumstances, it could not be established that the parties reached agreement on all essential aspects of an initial bargaining contract," he said.

But McCracken disputed the NLRB finding. "They're wrong. We're appealing to the NLRB's national office in Washington D.C."

"Santa Fe's position as of July 14 was very clear. They won't agree to the union's health insurance and pension plan or to the successorship and subcontracting provisions. But a contract doesn't have to have these provisions, and the union has accepted the contract without them."

"Subcontracting is a provision that restricts a hotel owner from turning over some part of their operations to be run by other companies other than the owner. Unless it's controlled, it may affect employees in the operations that are being turned over," he said.

"The parties agreed on most issues before July 14 on vacation, holidays, protection against unjust discipline, seniority job bidding and discrimination, with the exception of those four provisions," McCracken said. "The union also proposed that Santa Fe require any buyer to keep the employees. ... But Santa Fe refused."

John Kloosterman, Santa Fe's attorney disagreed.

"It's been a long drawn-out battle and we don't know if it's over yet. Santa Fe never proposed a complete agreement or an entire package contract at any point in the negotiations."

"It's an open question as to what was accepted by either party. We've no idea what the union was accepting," Kloosterman said. "There were a lot more issues outstanding than the four issues named. The parties agreed on a number of issues, but there was no agreement on the final deal. No tentative agreement is binding until there is a complete contract offer."

Meanwhile, the NLRB said seven other unfair labor practice charges it filed -- based on union complaints -- against the hotel-casino are still pending.