Culinary delivers unpleasant surprises

Michael J. Mishak

Wednesday, June 6, 2007 | 7:09 a.m.

The Culinary Union and MGM Mirage have hit major snags in negotiations over a new contract.

Behind the scenes the two sides have bogged down not only over so-called card check provisions governing the way workers organize, as company officials and casino industry insiders had previously suggested, but now also over money.

Current five-year contracts, affecting about 50,000 hotel and restaurant service employees, expired June 1, but the union and the casino operators signed extensions that allow both sides to continue negotiating. About 21,000 of those workers are employed by MGM Mirage.

The Culinary wants MGM Mirage to pick one of two options. One is a series of fixed wage increases spread out over the course of the agreement, much like the terms in the current contract. The other, and more radical, is a form of earnings sharing, with raises factoring in MGM Mirage's growth.

MGM Mirage says both proposals, and the earnings-sharing demand in particular, came as a surprise, and only two days before the contract expired - despite 2 1/2 months of talks.

The company says it expected the Culinary would want the same deal it signed two years ago with casino mogul Steve Wynn at Wynn Las Vegas. That contract, a 10-year pact, has no earnings sharing provision and links pay raises to the consumer price index.

More important , MGM Mirage says, that expectation set the pace for this year's negotiations.

"MGM Mirage entered into early negotiations with the natural anticipation that we would receive economic proposals, which would maintain the long history of keeping the wage increases on the Strip uniform," Cynthia Kiser Murphey, MGM Mirage senior vice president for human resources, said in an e-mail to company executives Monday.

Breaking from Las Vegas' tradition of "pattern bargaining" would plunge the casino industry into disarray, putting workers and companies at an economic disadvantage with their competitors, she wrote.

The Culinary said it issued its economic proposal later in the talks because the union had hoped first to resolve language items, such as organizing rights at nongaming portions of MGM Mirage's CityCenter. When talks failed, the union proposed an economic package that has worked well for its members in the past, said D. Taylor, the Culinary's secretary-treasurer.

Furthermore, given the recent industry consolidation, the Wynn contract didn't seem to fit MGM Mirage's profile, he said.

"Wynn is one casino," Taylor said. "MGM Mirage is 10. They are 10 times the size of Wynn. Clearly, they're the most important company in the valley."

Labor experts and casino industry observers say the union might have put the tougher money request on the table as leverage to win its fight over card checks, the method used by the Culinary to organize virtually every casino on the Strip.

A card check allows organizers to approach workers to sign cards specifying their support of the union. The card check is often coupled with a neutrality agreement, wherein the company agrees to accept the union once a majority of workers sign cards rather than after they cast ballots in an election.

As casino companies partner with more and more outside firms to manage restaurants, nightclubs and hotels, the Culinary sees its thriving membership at risk.

Indeed, as the contract deadline loomed last week, labor leaders ratcheted up their rhetoric.

During contract briefings with the three leading Democratic presidential candidates, Taylor cast the negotiations as an economic struggle between workers and the wealthy - and, in a broader sense, "everything that is right and wrong in this country."

Union officials targeted MGM Mirage in particular.

"What's right is what we're doing," Taylor said. "What's wrong is what the corporations are doing." He added: "We don't mind them making lots of money. They just have to learn how to share it."

MGM Mirage spokesman Alan Feldman called the earnings-sharing proposal reckless and said the company was not taking it seriously.

"Linking their wages to our growth is the same as linking wages to buffet prices," said Mike Sloan, a n MGM Mirage consultant involved in the negotiations. "It's never been done, not in this industry, not in this town.

"The formula we've used over the last 30 years is why we're successful," Sloan said. "To change that without an adequate explanation doesn't make sense."

Richard W. Hurd, a professor of labor relations at Cornell University, said linking a wage formula to a company's growth is unprecedented. Profit sharing is typical in labor contracts, he said, but it usually comes in the form of an annual bonus based on a company's performance.

Hurd said proposing an innovative measure, especially so close to a deadline, probably is either a move by the union to make up for some kind of concession it has made, or a move to get the company to budge on a big-ticket item, such as card check neutrality.

Either way, the proposal is strategic, and combined with the union's amped-up rhetoric, a clear way to try to build public support as things get tough at the bargaining table, he said.

"It certainly seems like an appropriate strategic step to highlight the company's performance," Hurd said. "Because in the event there is an inability to reach a contract agreement, it would give the union the high ground in the event of a strike or a lockout."

Similarly, MGM Mirage is seeking public support - through the news media. The company has released internal memos to reporters in recent weeks, emphasizing its desire to strike a deal that works for both sides. It's also noted that about 6,000 of the 12,000 jobs at CityCenter will be covered under the new Culinary contract, as opposed to the roughly 800 jobs the union is targeting at the project's two nongaming hotels.

"It's a drop in the bucket compared to what's on the table," Feldman said. "Six thousand union jobs. That alone is bigger than their membership in other cities."

As the talks bogged down, Culinary's separate negotiations with Harrah's took on a markedly different tone, in keeping with previous ones. Five years ago Harrah's was among the first to sign a deal with the union, which in turn led MGM Mirage to agree to terms it considered unfair.

Despite starting about a month later, bargaining sessions with Harrah's have yielded more progress, in areas of contract language and economics, Taylor said.

"With Harrah's we're actually negotiating - before reading about economic offers in the press and before they're given to workers," he said.

Marilyn Winn, who is president of Bally's, the Rio and Paris Las Vegas and is lead negotiator for the Harrah's talks, said the company, unlike MGM Mirage, has not sought a Wynn-type deal with the Culinary .

Still, both sides have yet to reach agreement on an economic package.

The union initially proposed a series of fixed hourly wage increases over the length of the contract, she said. The company rejected that offer and made a counterproposal, which the union rejected, Winn said. Both sides return to the bargaining table Tuesday.

Card check has not been a sticking point in the Harrah's talks, she said.

"I am optimistic that we'll be able to get an agreement quickly," Winn said.

And yet, for the first time, contracts with each of the major casino operators may look very different.

"I do think we want a level economic package," Winn said. "But there are many ways to get to the same price."

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