A sweet deal: Culinary negotiates its best contract yet

Friday, May 31, 2002 | 5:02 a.m.

WEEKEND EDITION: June 2, 2002

In a remarkable turnaround, the Culinary Union has risen from its post-Sept. 11 doldrums to negotiate its richest contract ever with the casino industry.

With a focused strategy that played well to the public and a tough battle-ready negotiating stand, the union last month won tentative agreements from the four major casino operators on the Strip. The agreements gave 75 percent of the union's 50,000 members their largest increase in wages and health benefits in their history.

The five-year deal, expected to be ratified by members on Thursday, came on the heels of the area's worst-ever economic recession in which some 15,000 workers were laid off and union leaders agreed to take pay cuts in a show of solidarity.

Today, however, the union's batteries are recharged, as it looks ahead to reaching similar deals for the other 25 percent of its members, mostly at smaller downtown hotels, and organizing additional workers in the industry.

"This has made the union strong," said William Thompson, a professor of public administration at the University of Nevada, Las Vegas. "It has given them momentum to finish out the downtown contracts. If those casinos want to plead poverty, they're going to have to really make their case to the union."

The Strip deal also has given the union a leg up in its desire to organize other Las Vegas casinos, particularly neighborhood properties, a longtime goal of the union, Thompson said.

The nonunion hotels will have to consider similar benefit packages, or risk providing the union with additional organizing ammunition, he said.

Last week John Wilhelm, the Culinary Union's international president and chief negotiator, said he intends to launch new organizing campaigns once he obtains five-year agreements from the smaller casinos.

"Our first obligation is to settle the contracts with all of our members," he said. "When that's done, we'll turn our attention to the organizing issue. I would prefer to spend our time and energy on that than fighting with union employers."

High on Wilhelm's organizing list are the neighborhood properties owned by Station Casinos, as well as The Venetian, Aladdin and Palms. Union leaders also have their sights set on several Reno hotels, which have eluded them in the past.

But the union's attention for now remains on the expiring contracts at 17 smaller casinos, primarily downtown. The union last week extended its strike deadline for those properties by one month to July 1 to provide more time to negotiate.

As of Friday these casinos were still negotiating agreements: Barbary Coast, Stardust, Riviera, Sahara, Stratosphere, Castaways, Union Plaza, El Cortez, Fitzgeralds, Four Queens, Fremont, Golden Gate, Binion's Horseshoe, Las Vegas Club, Jerry's Nugget, Main Street Station and Western.

Eight downtown casinos have gone on record saying they can't afford the Strip contract. The union believes they can.

And though it's willing to make some concessions, the union is expected to use the same tough bargaining tactics against those properties that won the battle on the Strip.

The national AFL-CIO will be backing the new effort.

"There still are 10,000 workers without a contract, and we're going to stand by every last one of those workers just like we did with the other 75 percent," AFL-CIO Secretary-Treasurer Richard Trumka said.

"Hopefully, those companies will understand that it's important for them to come to an agreement, which will include fully paid health care coverage for their workers, and build on the success we've had in the past."

Trumka said the Washington-based AFL-CIO has been doing economic research on the downtown companies and developing a campaign to assist the Culinary Union at the bargaining table. The AFL-CIO is ready to donate whatever resources the union needs, he said.

The Strip deal, Trumka said, gave the Culinary Union a "tremendous boost" in its talks with downtown casinos.

"It said what they've asked for is not only legitimate, but it's the right thing," he said.

The turning point in the Strip negotiations can be traced to the morning of May 16, when Wilhelm delivered a fiery speech to thousands of union members at the Thomas & Mack Center before they voted to authorize a strike if needed.

"You know," he told cheering housekeepers, cocktail waitresses, bartenders and bellhops. "They're trying to divide us and defeat us. We're going to turn that around. We're going to stick together and divide them. And by sticking together, we will defeat them."

By the end of the day, union members, in a massive show of force, voted 18,654 to 877 to give union leaders permission to call their first strike in 18 years.

One week later on May 23, Wilhelm's prediction came true when Park Place Entertainment, one of the "Big Four" gaming companies on the Strip, broke ranks and reached a tentative five-year agreement with the union after five weeks of tenuous collective bargaining.

The next day, Harrah's Entertainment agreed to similar terms, and in four more days Mandalay Resort Group and MGM MIRAGE, which had taken the hardest line during the negotiations, accepted the deal.

In less than a week, the union had obtained lucrative agreements at the four companies covering what the union said were 36,000 members at 18 megaresorts.

"They got the most expensive contract in history at a time when the industry could least afford it," said Mike Sloan, a Mandalay senior vice president who engaged Wilhelm in a battle of rhetoric for weeks. "They played hardball, and they won."

That the union had to play hardball was a radical departure from its cordial relationship with the casino industry in the 15 years Wilhelm has served as the union's chief negotiator. The previous three contracts were put together in a spirit of harmony and cooperation that permitted the major gaming companies to undergo their biggest period of expansion.

The relationship, however, changed after the terrorist attacks of Sept. 11, which sent tourism into a tailspin and prompted casinos to lay off 15,000 casino workers.

UNLV's Thompson said the casino industry totally mishandled the layoffs, which alienated the public.

"It was very hard to support the casinos after the layoffs," he said. "That was a group-think and knee-jerk exercise. It wasn't a calculated response.

"Then, when their revenues came back, they didn't rehire everybody and put heavier workloads on the employees."

Making matters worse, he said, several major companies disclosed that they had given huge post-Sept. 11 bonuses to their top executives prior to the start of the contract negotiations.

"How stupid can a company be?" Thompson asked. "Why didn't they have the sense to wait until after the negotiations to do that?"

Thompson said the union's major goals of holding onto free health care benefits for employees and improving working conditions for housekeepers also played well with the public.

"You can't pit wealthy casino executives against a legion of housekeepers and expect the casinos to win," he said.

Wilhelm said the industry miscalculated the effect the layoffs had on the negotiations.

"I think that the companies underestimated the damage they did and the fear and anger they created among the employees after Sept. 11," he said.

"The feeling of safety and security that we worked so hard with many of the companies to build up here over the last 15 years got tossed out of the window."

Wilhelm said he was disappointed that the negotiations became so antagonistic with Mandalay Resort Group and MGM MIRAGE.

"This detour into contention and discord," he said, "doesn't make any sense."

Sloan said it's unfair to blame all of the negative rhetoric during the negotiations on the industry.

"We attempted to keep our comments factual, while they grabbed headlines with slogans and emotional charges," he said.

"We were described as Wall Street-controlled companies that employ people in slave-like working conditions, when in fact our workers are among the highest paid culinary employees in the country."

The union, Sloan said, "out-organized" and "out-planned" the casino industry, which was taken by surprise by the union's tough negotiating stand.

"We thought we would have had some discussions about how to preserve health care, but do it in a way that made economic sense to both the employer and the union," he said.

Sloan said the union also "ran a more intelligent campaign" than the industry.

"They were cohesive," he said. "They stuck together, and they had a good strategy and executed it."

Throughout the negotiations, union leaders never wavered from their basic message of preserving free health care and improving housekeeping conditions.

"We were able to make our case in very clear terms," said D. Taylor, the union's newly elected secretary-treasurer. "Health care and the treatment of housekeepers were real issues. If they were not real issues, the workers, the companies and the public would not have responded to them."

In the end the union reached deals covering 18 of the biggest casinos in Las Vegas: Bally's, Bellagio, Caesars Palace, Circus Circus, Tropicana, Excalibur, Flamingo, Golden Nugget, Harrah's, Rio, Mandalay Bay, Monte Carlo, Las Vegas Hilton, Luxor, The Mirage, New York-New York, Paris and Treasure Island.

Taylor said the key to reaching the tentative agreements was the overwhelming strike vote at the Thomas & Mack Center.

"The best thing that ever happened to negotiations was that vote," he said. "That backed up what we said at the negotiating table."

Wilhelm said deals were reached not because of any grand union strategy to divide the industry, but because two companies, Park Place and Harrah's, decided to step up to the plate and "bet on the industry's future."

The same "phenomenon" occurred during contract negotiations with the hospitality industry in Boston in November, he said.

"We settled a contract in Boston on Nov. 30 at a time when 40 percent of our members were laid off," Wilhelm said. "It was the largest contract in the history of the union there.

"At the end of the day it happened because those employers said, 'Look, we've got to focus on rebuilding the business. We've got to focus on bringing customers back. We need a long-term, five-year agreement to do that, and we're willing to pay for it.'

"And that's what happened here. That's what Park Place and Harrah's decided to do, and ultimately the other two major companies saw fit to go along with that."

Sloan said his company knew it had lost the battle about three weeks ago, when it became clear that Park Place and Harrah's were going to negotiate separate deals.

"That was really the end of the game," he said.

Former Mayor Jan Laverty Jones, a Harrah's senior vice president, said her company made it clear early in the negotiations that it wanted to reach an amicable agreement with the union.

"It was always in our best interest to have labor peace, because it gave us peace of mind and allowed us to focus on running our business," she said. "We think it was the right price. It was worth the price to allow us to look forward."

MGM MIRAGE Vice President Alan Feldman, who once likened the union to terrorists, a charge he said he later regretted, acknowledged that the talks became too contentious.

"There was a lot of rhetoric on both sides that wasn't necessary," he said. "Fortunately, cooler heads prevailed pretty quickly, and we got this in order in just a matter of weeks."

Wilhelm, meanwhile, as he turns his attention to the downtown casinos, said he's looking to improve his union's soured relationship with the industry.

"I think it's absolutely crucial over the next few months that we figure out how to jointly repair it," he said.

Sloan agreed.

"We will continue to be partners of necessity, because we have found over a long period of time that there are many circumstances in which it is in our common interest to work together," he said. "They need us, and we need them."

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