VEGAS INC Magazine - Latest Las Vegas business news, features and commentaries about gaming, tourism, real estate and more
Issue link: https://www.ifoldsflip.com/i/48051
IN BUSINESS RULING OPENS DOOR TO CLASS ACTION BY DEALERS COURTS, FROM PAGE 7 dealers challenging the tip-sharing policy, said that if Cory's ruling were upheld, it would allow him to demand the return of some $30 million he believes had been wrongly taken from the dealers since 2006. Cory's ruling will allow the dealers to pursue their claims as a class action — a development that protects individual workers from retaliation should they complain about the policy, Greenberg said. Tip sharing is common among workers in the same job classification, such as dealers or waitresses. It's uncommon — but not unheard of — to have supervisors share in these tips. While tip sharing between dealers and supervisors has been a longtime practice in at least two smaller casinos in Nevada, its implementation by Steve Wynn in 2006 at Wynn Las Vegas and later at Encore was a first for the Las Vegas Strip. Wynn said he wanted to equalize the incomes of dealers and their supervisors to recruit more supervisors. On the Strip, dealers typically make more than their bosses because of hefty tips. Dealers complained the Wynn policy had deprived them of money they earned and had reduced their incomes. The key legal question was whether Wynn Las Vegas and Encore received an unauthorized "direct benefit" by diverting tips from the dealers to the supervisors. Attorneys for Wynn insisted during STEVE MARCUS BAD DEAL?: Attorneys for Wynn Resorts Ltd. say the company's tip-sharing policy clears a key legal test in that the company doesn't receive a direct financial benefit from it. an August hearing that the company received no direct benefit, as it was simply redistributing money among the casino staff and that the supervisors' substantial customer satisfaction duties gave them entitlement to share in tips. Wynn's attorney, Kamer, also argued a minority of dealers were behind the legal challenge and the vast majority of the company's approximately 1,000 dealers wanted nothing to do with the dispute. Kamer further had urged Cory not to legislate from the bench, pointing out the Nevada Legislature has had plenty of opportunities to explicitly outlaw such tip-sharing arrangements but has not done so. Attorneys for the dealers — who say some $5 million per year is being diverted from dealers to supervisors — insist Wynn received a direct benefit from the tip money as a corporation. The tips provide dollars the company doesn't have to come up with to help pay for the supervisors' raises, the attorneys claim. The bottom line is that the policy boosts Wynn's profit at the expense of the dealers, they say. Cory, in his ruling, sided with the dealers in the legal dispute, and he cited a lack of support for Wynn's position in Nevada Supreme Court case law. "Quite simply, the Nevada Supreme Court has never allowed a mandatory tip-pooling policy that extends beyond the dealer-only pool," Cory wrote. "This court is unprepared to say that the tip-pool in the instance case, one that allows boxpersons and Casino Service Team Leads (CSTL) to share in the tip pool with dealers, is one that the Supreme Court anticipated" in a previous case, Cory wrote. "To so hold in the face of the demonstrable evidence of the direct economic benefit to Wynn would be to eviscerate the meaning of 'direct benefit to an employer.' Therefore, Wynn is prohibited from including boxmen and CSTLs in the tip pooling agreement." The Wynn policy was aimed at boosting the pay of casino supervisors from about $60,000 to $65,000 to $85,000 to $90,000, or about what the dealers were making before the change, attorneys have said. Wynn had provided the supervisors with a $5,000 raise, with the rest of their raise coming from the dealers' tip pool, dealers' attorney Greenberg said during the August ruling. Greenberg said Cory's ruling was "direct and straight-forward." "He's saying it's OK to have tip sharing — but with people in different job classifications it's not appropriate," Greenberg said. REMODELING PROJECTS PROVIDING STEADY WORK FOR BUILDERS CONSTRUCTION, FROM PAGE 7 the beleaguered construction sector may have finally found its bottom," the report said. After witnessing the loss off 92,000 construction jobs statewide since 2006, the latest numbers were among the first optimistic signals the industry had seen for years, Mandi Lindsay, AGC Las Vegas executive director, said in an interview. "It's perhaps a sign of hope," Lindsay said. While little building was expected in the overbuilt residential, retail and office sectors, the smaller jobs keeping contractors busy have generally been in the health care, manufacturing, government and military sectors, she said. Another source of steady work | 21 NOVEMBER 2011 | for local contractors are hotel- casino companies, many of which are constantly remodeling rooms, refurbishing casino areas and replacing food and beverage outlets. "That type of work has been keeping a number of our members quite busy," Lindsay said. And every construction project was important for the local economy, with construction workers typically making $25 per hour, she said. "If they're not making money, they're not out spending money," she said. Among the biggest Las Vegas construction spenders is Caesars Entertainment Corp., which is completing its Octavius Tower expansion at Caesars Palace and plans to invest $550 million in The Linq, a retail, dining and entertainment district on the Strip that is due to break ground this quarter and will employ an estimated 3,000 construction workers. In addition, MGM Resorts International last week said it spent $162 million on remodeling and refurbishment projects so far this year, with plans to spend a total of $275 million this year, mostly in Las Vegas. MGM's projects include remodeling rooms at the Bellagio and MGM Grand and the opening of eight new food outlets at the Luxor and Excalibur, the company said. Similarly, executives at the Stratosphere said they were considering adding a restaurant to the casino floor and refurbishing the rotating Top of the World restaurant more than 800 feet above Las Vegas Boulevard in the Stratosphere Tower. Hotels and casinos can only spend so much on construction as that industry emerges from its own recession. So the best hope for long-lasting improvements for the construction industry may be improved economic development and diversification efforts, the AGC report said. "Nevada will need to raise the economic development bar to realize expansions beyond traditional sources of job creation," the report said, noting Gov. Brian Sandoval and the Legislature had already restructured economic development programs. "Recent legislative action was an important first step; now the hard work of repositioning and competing begins." 9