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Court: Wynn tip dispute to be decided by Labor Commissioner

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

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.

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