Culinary leaders credit casino execs

Friday, July 5, 2002 | 10:58 a.m.

Culinary Union leaders are crediting two well-known casino industry executives with helping them broker the richest collective bargaining agreement ever reached downtown.

Boyd Gaming Chairman William Boyd and Coast Resorts Chairman Michael Gaughan both played instrumental 11th-hour roles in moving along complicated negotiations with a dozen casinos, union leaders said.

"I really believe that this would not have come together without them," said John Wilhelm, the union's international president and chief negotiator.

The union this week worked out five-year agreements with nine downtown casinos -- Fremont, Main Street Station, Fitzgeralds, Four Queens, El Cortez, Plaza, Las Vegas Club, Binion's Horseshoe and Western. Deals also were reached with the Castaways on Boulder Highway and Jerry's Nugget in North Las Vegas.

All 11 casinos agreed to $2.20 in hourly increases in wages and benefits for each employee over five years, roughly $1.24 less than the Strip contract put together at the end of May. Most of the money will go to the union's health fund.

Four of the more economically distressed casinos -- Horseshoe, Castaways, Las Vegas Club and Western -- were allowed to defer their payments for up to 11 months in each year of the contract.

The lone Fremont Street holdout was the 106-room Golden Gate, now the target of the union's first walkout since the six-year Frontier strike ended in 1998. The Golden Gate was offered the same deal as the other distressed casinos, but rejected it.

Officially, Boyd participated in the talks on behalf of his two downtown union casinos, the Fremont and Main Street Station.

Gaughan negotiated for the Las Vegas Club and Western, which are owned by his father, gaming pioneer Jackie Gaughan, and he kept an eye on discussions with the elder Gaughan's other two downtown properties, El Cortez and Plaza.

But the participation of both Boyd and Gaughan broadened as the union struggled to find common ground with all of the downtown casinos during the last week of the talks.

Both men were asked to step up their presence at a time when the union found itself engaged in a battle of rhetoric with veteran labor attorney Gregory Kamer, who was representing the Horseshoe and some of the other lower-end casinos.

Wilhelm said Boyd and Gaughan furthered the bargaining process by helping the union create an environment where it could hand out concessions to Kamer's clients without offending the casinos with deeper pockets. The union did not want the better off properties to think that it was trying to give the Horseshoe group an unfair business advantage over them.

Several days before Monday's settlement, six downtown casinos, led by Boyd's Fremont and Main Street Station, banded together and informed the union that they would not object if the Horseshoe group received additional economic breaks, Wilhelm said.

The Fitzgeralds, Four Queens, El Cortez and Plaza also were part of that coalition, he said.

"They took a broad view of the interests downtown," Wilhelm said. "They knew it wouldn't be a good thing if some of these places were boarded up.

"So they said, 'Let's tell the union if we can find a way to get them some relief, we can support that.' It was quite an unusual position for competitors to take."

Keith Smith, executive vice president and chief operating officer at Boyd Gaming, said his company accepted a leadership role in the talks to avoid what could have been a disastrous strike downtown.

"Being able to pull the six properties together, which account for roughly 70 percent of the employees downtown, gave the union great comfort," he said.

"We believe that it is important for downtown that the lights stay on and everybody stays open and operating. Some properties were not in a position to take a strike, and it was important to have everybody reach a deal."

Gaughan downplayed his role in the negotiations, saying Boyd and Smith really led the way.

"I kind of came in to bring a little sanity to the negotiations," he said. "The idea was to keep as many places open as we could.

"It was kind of like the old days when all of the older guys seemed to come together."

Horseshoe owner Becky Behnen agreed.

"There was such camaraderie," she said. "Everybody was helping each other out. It was so nice."

Behnen, who was participating in her first labor negotiations since taking over the Horseshoe four years ago, said Gaughan, a longtime friend, gave her much guidance during the talks.

"He helped me through the process," she said. "He stayed with me until the end."

The end for Gaughan was about 5:30 a.m. Monday at the Culinary Union hall, after an all-night bargaining session with the downtown casinos, and after it became clear Behnen was going to strike a deal.

Kamer called Gaughan, who has a master's degree in labor relations from the University of Southern California, the star of the contract talks.

"Bill Boyd was the team captain, but Michael Gaughan was the quarterback," he said. "Michael is a talented, bright guy who was able to communicate with the workers and hold his own with the union, and that's a winning combination. He knew what needed to be done."

Kamer said none of the downtown owners tried to jostle among themselves for a better deal.

"It was always a question of what's going to be in the best interests of downtown," he said.

Smith explained that his company had no trouble taking that position.

"This went beyond our own financial situation," he said.