Former Castaways employees out of luck on unpaid wages

By Cy Ryan

Wednesday, Nov. 26, 2008 | 4:19 p.m.

CARSON CITY – The former employees of the now-defunct Castaways Hotel, Casino and Bowling Center cannot collect their unpaid wages from the individual managers of the resort.

The Nevada Supreme Court says individual managers cannot be held liable for unpaid wages. The decision is in answer to a question by the U.S. Ninth Circuit Court of Appeals, which is considering a case brought by the former workers at the Castaways.

The Castaways filed for Chapter 11 bankruptcy protection in June 2003 and the workers were fired six months later. The club closed soon after that.

Thelma Boucher, Ardith Ballard and Joseph Kennedy III are former employees and they filed suit on behalf of themselves and other employees.

They sought to collect from Dan Shaw, who was chairman and chief executive officer of the Castaways when the employees were discharged, Michael Villamor, who was responsible for handling labor and employment matters for the hotel-casino, and James Van Woerkom, who was chief financial officer.

Shaw and Villamor held 100 percent ownership in VSS Enterprises that owned the Castaways. Shaw held 70 percent and Villamor had 30 percent.

The Supreme Court, in a decision written by Justice Ron Parraguirre, said Nevada law makes the employer responsible for paying wages. But he said the definition of “employer” was ambiguous.

Parraguirre wrote that an interpretation of the law shows it “was not designed to extend personal liability to individual managers of corporations in derogation of existing Nevada corporate law.”

Cy Ryan may be reached at (775) 687 5032 or [email protected].