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July 30, 2014

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Culinary Union sees shot in Station insolvency

Gaming company less able to resist unionizing while it’s in reorganization, experts say

Richard McCracken, strategist for the Culinary, says a company in bankruptcy reorganization must get court approval to spend money to counter a union organizing drive.

Richard McCracken, strategist for the Culinary, says a company in bankruptcy reorganization must get court approval to spend money to counter a union organizing drive.

Station Casinos properties

The clock tower of the Boulder Station hotel-casino obscures the resort's 15-story tower. Boulder Station has won three Launch slideshow »

The Culinary Union fought for years to organize the Aladdin. But it wasn’t until the resort filed for bankruptcy protection that the union gained the upper hand.

That lesson was on the minds of Culinary leaders last week as Station Casinos — the union’s bitter rival — filed for Chapter 11 protection, providing perhaps the most significant opening yet for organizing the nonunion casino giant.

In an interview, Richard McCracken, the Culinary’s lawyer and strategist, said the bankruptcy filing was welcome news because expenditures become subject to court approval, so management can’t respond quickly to a union campaign.

“Companies have to go to court to make an application to hire union busters,” McCracken said. “And it becomes a question of whether creditors want to see resources spent like that.”

In the case of the Aladdin, McCracken said, management ultimately hired a consultant to fight the union, but “not with the kind of intensity and ferocity a well-heeled company would bring to bear.”

The Aladdin opened nonunion in 2000. The owners denied the union’s request for a card check, a system wherein an employer recognizes a union after a majority of employees sign cards. The operator insisted on a secret-ballot election.

Within a year, the Aladdin, saddled with debt and reeling in the wake of 9/11, filed for bankruptcy protection.

The Culinary’s work then began in earnest. It staged protests, stepped up organizing efforts and filed complaints of unfair labor practices.

The company fought back, but, McCracken said, “there’s a big bill that comes with running a full anti-union campaign. And companies in bankruptcy proceedings are less able to mount that effort.”

Planet Hollywood took control of the resort in 2004, and in months agreed to a card check, which the union won handily. “Things change hands, and oftentimes we find the new hands are nicer hands than the ones before,” McCracken said.

But the new operator didn’t recognize the Culinary out of kindness. When Planet Hollywood emerged as the Aladdin’s new owner, the union kept up the pressure. The Culinary sent letters to the Nevada Gaming Control Board questioning the fitness of the new owners.

Planet Hollywood ultimately won licensure, and after the union cards were counted, Aladdin executive Michael Mecca offered this: “We got to know the people who work here and understand our business. We listened to what the people of the Aladdin wanted.”

Rick Hurd, a Cornell University professor, said the Culinary and its parent organization have perfected campaigns against hostile employers. “The hotel employees, historically, have been masters of finding whatever leverage they can, whether it be government regulation or a bankruptcy judge,” he said.

But the union’s tactics have failed at Station.

The feud goes back to 1993, when, thinking it had majority support and the owner’s cooperation, the Culinary ran a conventional organizing campaign at the Santa Fe and won an election to represent the resort’s workers. The owners disputed the result and dragged out the appeals and bargaining process until 1999, when the property was sold to Station, which dismissed the workers in a wholesale firing. Culinary’s challenges to the move failed.

The union purchased Station stock and protested at shareholder meetings, objecting, for instance, to an executive compensation plan. But such avenues were cut off in 2007, when Station went private in a $5.4 billion buyout.

Now, experts say, the union has a new edge as lenders fight to protect their stake in Station’s $6.4 billion debt.

“The union has a lot of cards,” said Harley Shaiken, a University of California, Berkeley, labor expert. “Anything that promises disruption to a company’s image, the lenders are going to take quite seriously. It could make lenders skittish, particularly if the company is asking for funding.”

David Rosenfeld, a law professor at UC Berkeley, said the Culinary could engage banks directly to get Station to recognize the union.

Still, Shaiken said, the success of any organizing drive is determined by rank-and-file support.

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