Court: Wynn tip dispute to be decided by Labor Commissioner

Published Thursday, Oct. 9, 2008 | 12:09 p.m.

Updated Thursday, Oct. 9, 2008 | 3:18 p.m.

Wynn: Encore will take hit despite ‘position of strength’ (10-9-2008)
Tip-sharing cloud forming over Encore, Wynn critics say (8-7-2008)

Nevada Supreme Court Decision

The Nevada Supreme Court today sided with a lower court decision that a dispute over a controversial tip-sharing policy at Wynn Las Vegas must be settled by the state Labor Commissioner.

The high court upheld a 2006 ruling in Clark County District Court which dismissed a lawsuit by two Wynn dealers, Daniel Baldonado and Joseph Cesarz.

Still undecided is whether state law, which prevents employers from taking employee tips, would permit Wynn to continue his policy that casino dealers share a percentage of their tips with immediate supervisors.

The Labor Commissioner issued a public statement last year concluding that Wynn’s policy, supported by case law in Nevada, passed muster.

But Commissioner Michael Tanchek acknowledged that state law isn’t clear on tips, nor does his opinion constitute a final ruling.

Tanchek said today he will review both court rulings and likely hold a public hearing on the matter in the coming months. The hearing would center on a claim filed by Meghan Smith, a former Wynn dealer who is seeking earnings lost as a result of the tip sharing policy.

Attorneys for Smith and Wynn agreed to postpone moving forward on her claim, a proxy for other Wynn dealers, until after a Supreme Court decision on the matter.

“I don’t view this as a setback,” the dealers’ Las Vegas attorney, Leon Greenberg, said today. “This will continue with the Labor Commissioner.”

Today's ruling forces the commissioner to make a decision, said Al Maurice, a Mirage dealer who isn't part of the lawsuit yet is supporting Wynn dealers. If Tanchek sides with Wynn, dealers would have a right to appeal that decision in court, he said.

Wynn’s attorneys were observing the Yom Kippur holiday and couldn’t be reached for comment.

Wynn’s attorneys have relied on decades of state and federal case law in Nevada siding with employers in tip disputes. Those cases say employers have a right to impose tip-pooling policies on their workers. In the absence of employment contracts, at-will employees are subject to unilateral changes in the terms of their employment, including tips, they say.

Today’s ruling also said that, under Nevada labor law, the employees didn’t have a valid employment contract and therefore weren’t entitled to claim that it had been broken.

But judges sided with a District Court finding denying Wynn’s claim for reimbursement of attorneys’ fees.

“As this opinion illustrates, the law in this matter is complex and unsettled,” they wrote. Dealers “raised reasonably supportable, if not ultimately successful, arguments.”

Attorneys for the dealers say Wynn is breaking the law because, even if he is not pocketing dealers’ tips, his company benefits financially by supplementing supervisors’ earnings with the tips dealers receive rather than by having to pay the supervisors higher salaries.

Wynn says he implemented the policy to attract dealer supervisors who have typically been paid less than the people they oversee while giving them an incentive to improve customer service.

Dealers say the tip sharing policy has cost them at least 10 percent of their annual earnings, which can total more than $80,000 a year.

Discussion: 13 comments so far…

By innovation

10/9/08 at 1:29 p.m.

Suggest removal

I always thought Wynn had a great reputation. I mean look at the property. Maybe the dealers just aren't looking long term. In the long-run, the new tip-sharing policy might mean more money for everyone, because more front-line employees have an incentive to treat customers like gold. It's not like every property is doing it (Wynn is the only one). Hey, just let the guy try something new.
By neiman1

10/9/08 at 2:39 p.m.

Suggest removal

Unions hate innovation. They also hate any owner thinking he can set the work rules unless they approve of it in advance. One club should throw the union out and see how it works. The right to work is American, the union insists on socialism.
By FleaStiff

10/9/08 at 3:18 p.m.

Suggest removal

The decision is simply that as 'at-will' employees they must agree to whatever the employer's tip-sharing policy is; there are no vested rights to the employment or the employment terms.

Wynn's mistake was the heavy-handed manner in which he introduced the policy. Its clear that the casino's customer base is largely the result of entrepreneurial and managerial efforts, the customers who tip might be unaware of a tip-sharing agreement but they are not a party to it. Wynn could adopt policies that would result in nothing but morose, non-tipping fleas playing there. Instead he has implemented policies that result in an upscale and generously-tipping customer base. It is perfectly proper for Wynn to want to receive a return on his investments, including the investments he made in creating a generously tipping clientele.
Employees who feel slighted by this are at-will employees, not slaves. The entire dispute could have been avoided if Wynn had introduced the policy change in a less-heavy handed manner and with a good bit more explanation and notice to the dealers of what would be happening.
By toulous3

10/9/08 at 5:07 p.m.

Suggest removal

Wynn is the creator of just another dirty casino. Casinos that bring in millions of tourists, celebrities, and high rollers that come to gamble and risk beating the odds. And tipping, while optional, is another form of showing gratuity toward individuals that the consumer feel fit to have. If losing substantial amounts of money to the casino were not enough, he expects dealers to share the very tip they were handed. This sounds like double-dipping to me, which should not be tolerated by a city that revolves around gaming. He already has his name on the building , why should dealers have to feel the hit from the man behind the name?
By true_rebel_fan

10/9/08 at 7:15 p.m.

Suggest removal

CALLING ALL WYNN DEALERS.....

CALLING ALL WYNN DEALERS.....

if you hate the wynn tip policy go work somewhere else.

HA! HA! HA!

now, you know that's funny because no matter how much you complain -- you aren't going anywhere.........

why can't all of you cry baby dealers be happy that you have jobs right now. if this crappy economy keeps up, you will be un-employed. what's that saying..... beggers can't be choosers
By Lenny_V

10/10/08 at 2:06 a.m.

Suggest removal

NO COURT IN THIS STATE WILL EVER GO AGAINST THE CASINO'S WISHES.

true rebel fan - your an idiot child, grow the F up!
By dave202

10/10/08 at 11:39 a.m.

Suggest removal

Now is the time to decertify this ugly union. Wynn dealers were blocked from all promotions at Encore. They are "suffering" with their $80K per year earnings. What better reason to unionize. Idiots.
By true_rebel_fan

10/10/08 at 2:30 p.m.

Suggest removal

lenny_v are you that ridiculous?

i mean.... why are the dealers crying over tips while the rest of our community is headed to live on the streets?

dahh.....

many of the homeless, now, have college degrees. they didn't go to a dealing school for a few months.

honestly, i hope everyone can make as much money as possible -- this is just the wrong time to rock the boat.

whatcha got now? :-)
By wakeuppeople

10/10/08 at 7:52 p.m.

Suggest removal

i thought under the constituion your wages are your private property. since the 16th amendment is unconstituional how can anyone take a part of another persons hard earned money. the person receiving a portion of a workers money, is not providing the service for the money he is receiving, and if thats the case. that person receiving part of anothers hard earned money. should not be responsible for poor quality service aswell and partially share any discipline?

google "the law that never was"

the supreme court has ruled............
your labor is your private property

or ask the county employee's who are overpaid, to start sharing some of their money.
By NVTipEarner

10/12/08 at 5:16 a.m.

Suggest removal

WOW!!! I can't believe that people do not realize how far reaching this could be. It's not that the dealers at Wynn are suffering making $80,000 a year. The real issues here are:

1. If this is found to be "legal", every tip earner in town will be sharing tips with supervisors. The fact is that other houses haven't done this yet because of the threat of the union and because there is not a clear ruling by any court yet. If those dealers had not fought, every tip earner in town would already be paying his supervisor with his tips. Billion dollar corporations should pay for their managements' salaries.
2. Getting a return on their investment? Isn't the hundreds of millions of dollars Wynn makes enough of a return on their investment? Now they have to go into their employee's pockets to get even more of a return on their investment? They build these giant buildings to make money from customers and they make billions. Isn't that enough?
3. I'm sure the Wynn dealers are happy to have jobs in this economy but remember, this all started before the economy took a dive. No decent human being should ever take advantage of any situation just to be able to take something from his employees or to treat them inhumanly. Should all the casinos cut everyone's pay in half and then tell them that they should just be happy to have a job in this economy? Beggars can't be choosers huh? What a great way to treat people. The casino's earnings went down from 1.3 BILLION September '07 to 950 MILLION September '08. That's 1 MONTH!!! These casinos aren't hurting even in this economy.
4. Just because Nevada is a right to work state doesn't mean that employers do not have to follow the law. You can't pay less than minimum wage as a condition of employment because it's against the law. You can't allow people to work in an unsafe working environment as a condition of employment because it's against the law. The law says, "It is unlawful for any person to take all or part of his employees tips". Employers still have to follow the law whether this is a right to work state or not.

Continued....
By NVTipEarner

10/12/08 at 5:17 a.m.

Suggest removal

Continued from above...

5. Go somewhere else??? Where??? Can the person that suggested this tell me where to go to find a full time job with benefits right now or even before the economy took a dive? The fact is that in just about any house, you have to spend 2 or 3 years with no benefits to get full time. The Wynn dealers left full time jobs, seniority, and benefits to go work for this man. They put their faith in him. They gave him their best. They worked for years to gain the experience that was required to qualify. They are now just trying to protect their profession and investment.
6. The union has protected the dealers from other "changes" the casino wanted to make. Including making them pay 10% of their earnings for health insurance. Ask the labor commissioner. Wynn tried to change the Labor Commissioners administrative policy to allow this. At this point, it would just be cheaper for Wynn to fire all the dealers and hire new people under a new title, like they did to the cocktail waitresses at Rio. As long as the union is there, Wynn can't do that. Get rid of the union? Not on your life!!! And by the way, nobody cares about going to Encore except about 5 people. Can't go to Encore? What a horrible loss!!!

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