Caesars Palace mulling change on dealer tips

By Liz Benston

Monday, June 14, 2010 | 2 a.m.

Steve Wynn shocked the Las Vegas casino industry four years ago by implementing a plan requiring Wynn Las Vegas dealers to share a portion of their tips with immediate supervisors.

Strip competitors, wary of stirring up trouble with employees and careful not to inspire union organizing efforts at their properties, quickly told dealers that they had no intention of following in Wynn’s footsteps.

And yet, Caesars Palace — a property where union-represented dealers are at loggerheads with management about changes in benefits and working conditions they don’t like — recently adopted language in its contract with dealers that allows the casino to impose the same tip-sharing policy as Wynn.

Representatives of Caesars parent company Harrah’s Entertainment reiterated that they have no immediate plans to redistribute the tips of Caesars dealers. The new language, however, would cement the company’s authority to do so at any time, they say.

“We have always maintained that we had the authority to manage the tip pool,” even before Wynn enacted his plan, said Marybel Batjer, vice president of public policy and communications for Harrah’s. “When Wynn acted upon it, we had not even contemplated it.”

But the world has changed since 2006. The following year, dealers — angered by the tip policy and its reduction in their take-home pay — made Wynn the first major casino since 2001 to see a successful vote for union representation.

Inspired by their counterparts at Wynn, Caesars dealers, who also feared a redistribution of tips but were more concerned about other matters such as job security and benefits, voted for union representation in December 2007. In a memo to dealers days before the election, Harrah’s executive Tom Jenkin urged them to vote against the union, adding that “Wynn made a bad decision in sharing tokes (tips) with supervisors.”

“To be as clear as possible, your tokes are your tokes,” he wrote.

But Caesars changed the conversation on tips after the Transport Workers Union Local 721 management months earlier agreed to language in a proposed contract at Wynn. That language authorized management to hand over 15 percent of dealer tips to supervisors, called “casino team leads.”

Wynn says the tips have motivated supervisors to provide better customer service to gamblers, making them deserving of tips that historically went to frontline workers in nonmanagement jobs. Dealers have disputed that, calling it Wynn’s way of avoiding paying managers higher salaries by taking the money out of the pockets of the frontline workers.

Wynn dealers opposed to the tip language have yet to ratify the contract, which has been unsigned for months. Some are angry with the union for agreeing to the very scheme that triggered the union campaign in the first place.

But Joe Carbon, who leads the Transport Workers Union’s gaming division, says he had little choice but to agree to the plan that Wynn had imposed on dealers in 2006. Rolling back the tip policy was out of the question, he said, because Wynn dug in his heels.

“It’s crazy to think we could sit down and get $30 (million) to $45 million in back pay for dealers at the negotiating table,” Carbon said.

Instead, he said, the union tentatively agreed to the 15 percent redistribution to freeze the status quo.

Had it been left out of the contract, Wynn, on the heels of a favorable court ruling, might have been able to give a much higher tip percentage to supervisors, Carbon said.

Some dealers who led the union effort at Wynn were set on reversing the policy. It’s unknown whether they might be a strong enough force to go on strike, however.

Legal experts not involved in the dispute say it’s unclear whether the tip division is legal because state law can be interpreted multiple ways.

That’s one reason casinos had not imposed sweeping tip-sharing plans previously, despite the obvious benefits of using rich tip pools to compensate nontipped managers who complain they earn less than those they manage.

Dealers have sued over the tip policy, which is awaiting a separate decision by the Labor Commission that may determine whether other casinos implement similar plans.

The Transport Workers Union, meanwhile, is fighting the inclusion of the tip language in the Caesars contract. The union faces an uphill battle, however, as the National Labor Relations Board last month dismissed a previous “bad faith” bargaining complaint against Caesars. The dismissal means earlier changes, such as removing the 401(k) match and implementing a higher-cost health plan, can move forward.

One change is a provision giving broad powers to management to redistribute employee tips with other worker groups.

By replacing the previous wording with language in the proposed Wynn contract, Caesars is simply agreeing to something the union approved at another property, Batjer said.

“It would be almost silly of us not to accept the language that union leadership already accepted at Wynn,” she said.

The union plans to appeal the labor board’s ruling in Caesars’ favor.

“The NLRB regional director ... has overstepped his bounds,” Carbon said. “There is no way he can make a decision based on negotiations at a separate property with different circumstances.”

The proposed Wynn contract is not official because it hasn’t been ratified by dealers, he added.

Stephen Wamser, the labor board’s deputy regional attorney in Las Vegas, said the proposals were still relevant to the case because union management had agreed to the tip change.

“When we were looking at the proposals at Caesars, our thought was they were made with a view that the union would (never) agree to them, and that provided our theory of bad-faith bargaining,” Wamser said. “Then we found out they agreed to similar proposals at Wynn.”

The process provides for both parties to return to the bargaining table, he said.

“The whole idea is that the parties trade back and forth to reach an agreement they can live with ... though no side is ever happy with the result.”

Federal law doesn’t require that both parties agree to changes management wants, only that they negotiate toward that end. Determining when negotiations are real and therefore, lawful, is difficult, however.

Carbon says Caesars is holding all the cards and dictating how the game is played. He says the casino was told it could impose other rules dealers don’t want, so it figured why not take it to the hilt and go after their tips.

Batjer downplayed the significance of the tip provision, saying the company would be more likely to adopt the scheme if it became widespread.

“That’s mere speculation, though. I don’t want to speculate about whether it would happen,” she added.