Editorial: Is there a moral equity?

Thursday, June 28, 2007 | 7:23 a.m.

N o one can deny that Phil Ruffin's arrival in Las Vegas nine years ago was great news for the employees of the Frontier Hotel. When the Kansas industrialist bought the hotel, he changed its name to the New Frontier, a change much more than name only.

His purchase ended the longest-running strike in the history of Las Vegas labor. The bitter strike over health benefits had sometimes turned violent and had from its start imposed a severe hardship on the employees.

Under Ruffin's watch, employees received back pay for their striking days and a five-year union contract was quickly negotiated. A second five-year union contract followed that one.

Now, however, Ruffin is selling the property, which he bought for $165 million. The New York real estate investors buying the property are paying $1.2 billion.

The employees' union contract does not call for severance pay for the hotel's 900 employees. Given Ruffin's windfall, should he pay it anyway?

This question was posed Wednesday in a story by Las Vegas Sun reporter Michael J. Mishak. Business experts were queried, producing arguments for the severance pay and arguments against it.

As for Ruffin, his mind is set. He's not paying. He said it cost his company a lot of money to sign the union contracts for the employees, adding, "We kept them employed for nine years."

Our view is that employees terminated for reasons out of their control should receive severance pay. There is ample precedent for this. And Las Vegas culture supports the idea. Gamblers who win big are expected to leave big tips.

Ruffin gambled on the New Frontier and won big. He should go out as he came in, as a stand-up guy who did the right thing.