Park Place, union reach deal

Thursday, May 23, 2002 | 11:12 a.m.

Park Place Entertainment reached a tentative agreement early this morning on a new five-year contract with the Culinary Union in what could be the first step toward averting a massive casino-industry strike on June 1, officials said.

The Tropicana, which had been negotiating jointly with Park Place, also agreed to the deal.

"We're very pleased that both Park Place Entertainment and the Tropicana, have reached a fair five-year contract agreement," said John Wilhelm, the union's international president and chief negotiator. "We're very pleased with the overall package and we think our members will be pleased."

The union's acceptance of the five-year deal represents a major change in its negotiating stance in the past five weeks.

Until this morning, the union had been insisting on a two-year contract because of the unstable economic conditions in Las Vegas in the aftermath of the Sept. 11 terrorist attacks. The union only was willing to commit to a long-term deal if it believed its struggling $300 million health and welfare fund could be protected.

Robert Stewart, a Park Place senior vice president, said the agreement was reached about 4 a.m. after marathon negotiations.

The two sides held discussions for about 12 hours at Caesars Palace, one of five Park Place's Strip hotels with contracts that expire on May 31. Park Place also owns Las Vegas Hilton, Flamingo, Bally's and Paris.

The talks, which got under way at 4 p.m Wednesday, were attended by 150 members of the union's negotiating committee.

Wilhelm and Stewart said details of the new contract were not being released until the union has a chance to present the agreement to its Park Place members.

"Both sides are very pleased with the accord," Stewart said.

Park Place has kept a low profile during the negotiations, while two of its chief competitors, Mandalay Resort Group and MGM MIRAGE, have engaged the union in a battle of rhetoric. Talks with those companies, which put a five-year proposal on the table earlier this week, are set for Sunday.

Union members voted by an overwhelming margin of 18,654 to 877 last week to authorize a walkout if an agreement with 35 casinos can't be reached by May 31, when the current five-year contract expires.

Prior to the marathon session, union negotiating committee members said they hoped that an agreement with Park Place would prompt the other major companies to strike similar deals.

"I think that this is the key to getting contracts in the rest of the city," said Rob Shelton, a veteran Flamingo bellman.

Vince Iannuzzi, another Flamingo bellman, added: "If we get a good offer from Park Place, it should set the tone. It'll be a domino effect."

Harrah's, another major Strip operator, may be the next to reach an agreement with the 50,000-member union.

Company executives headed to the bargaining table with the union today with an optimistic attitude.

"We're confident that we'll be able to come to a conclusion that's viewed as successful by both parties," Harrah's Communications Director Gary Thompson said. "We're hoping that we'll be able to reach an agreement by the end of the day."

The union also meets for the first time Friday with the Boyd Group, which has three casinos with contracts that expire at the end of the month -- the Stardust, Fremont and Main Street Station.

Mike Sloan, Mandalay senior vice president, declined to comment this morning on the union's arrangement with Park Place until he sees the details.

"We'll evaluate their deal once we see it," he said.

Sloan acknowledged Wednesday that an agreement would have an effect on negotiations with his company and MGM MIRAGE, which have taken a tougher stance with the union.

"Obviously if they reach an agreement with Park Place, it's something the rest of us are going to have to consider," Sloan said.

Park Place previously agreed to the union's demand of a 65-cent increase per hour in health care benefits for each employee for the first year of a new contract. The union said it needed the 65 cents to keep its health and welfare fund afloat and preserve free medical coverage for its members.

Harrah's Entertainment also has accepted the 65 cents.

But Mandalay Resort Group and MGM MIRAGE have proposed a 57-cent hike, which they contend is comfortably above the 49 cents the fund's own administrators believe is needed to maintain the same level of medical benefits.

Union leaders this morning were hoping that an agreement with Park Place will force Mandalay and MGM MIRAGE, which together own 11 properties with expiring contracts, to up the ante and sign a similar deal.

Earlier this week, D. Taylor, the union's newly elected secretary-treasurer, said offers from all four of the major companies fell short of the union's demands for the second year of the contract -- an increase of 75 cents an hour that it can allocate toward the health fund, pension fund or employee wages.

Park Place and Harrah's offered 55 cents, and Mandalay and MGM MIRAGE came back with 53 cents.