Atlantic City casino union fights pay cut proposal

AP News
Posted: Sep 12, 2011 2:58 PM
Atlantic City casino union fights pay cut proposal

New Jersey's casino industry has never been this down on its luck: Over the last 4 1/2 years, Atlantic City's gambling halls have lost $1.5 billion worth of business and thousands of jobs as casinos open in surrounding states, and the sluggish economy has gamblers spending less freely.

So with union contracts with nine of the 11 casinos expiring on Thursday, both the casinos and the workers are trying to make up lost ground at the other's expense.

The union, Local 54 of Unite-HERE, has come out swinging, accusing casinos of wanting to institute a "sharecropper economy," a loaded term in the majority African-American city that's also the nation's second-largest gambling resort. It has picketed one casino three times, handed out leaflets on the Boardwalk urging customers not to patronize gambling halls that mistreat their workers, and told convention groups to take their business elsewhere.

So far the effort has resulted in three canceled conventions at Resorts Casino Hotel, the casino the union has gone after the hardest for the drastically reduced salaries it paid its workers after buying the struggling property in December and saving it from closing.

But one Resorts executive says the union is on a "crazy path of self-destruction" that fails to recognize the industry's ongoing hard times.

It has been the union's most aggressive stance since 2004, when it went on strike for 34 days before reaching a new deal. And while no one is talking about another strike just yet, union president Bob McDevitt freely admits the union is out to show its muscle as talks remain bogged down.

"We've had it," said McDevitt, whose union represents 14,000 housekeepers, food and beverage servers, janitors and other service workers. "We're not going to allow them to have a sharecropper economy where workers pay to be allowed to work."

Resorts is one of two casinos not involved in contract talks, but McDevitt said its cost cutting has influenced the contract proposals of the other casinos, which are looking to reduce pay by $3 an hour.

In addition, McDevitt said, the casinos want union members to start contributing for the first time toward the cost of their health and pension benefits. Over the past seven years, workers' base pay has risen by only 55 cents an hour because the union has been adamant about protecting health benefits, McDevitt said.

"We've given up raises to maintain the health benefits because we felt it was so crucial to the quality of life of the workers that they have health insurance," he said.

The union has picketed three times outside Resorts, helped some of its employees sign up for food stamps, and continues to target its convention clientele. It has set up a website, that advises people of the ongoing strife and even suggests legal language for organizations' casino booking contracts to allow them to cancel without penalty due to labor unrest.

Resorts co-owner Dennis Gomes said he and co-owner Morris Bailey saved Resorts from closing and throwing 2,000 people out of work two weeks before Christmas. The lower salaries he imposed were essential to ensuring that Resorts survived, he said. Many workers with 20 or more years of experience saw their pay fall from $14.55 an hour to $9.83.

"I did the right thing for the right reasons for these people, and the union wants to punish me for it," Gomes said.

"We had to fight to keep this place from closing," he said. "There are other places in town that are in danger of closing. And the union is going on this crazy path of self-destruction. They want to use their muscle and use us as an example for the rest of the industry. They are determined to destroy our mid-week convention business."

Resorts has lost three large convention bookings to groups who were contacted by Local 54, Gomes said. The New Jersey State Firemens' Mutual Benevolent Association canceled a convention it scheduled at Resorts last weekend, switching it instead to the Golden Nugget. The firemen's union also axed a meeting it had set for Resorts in November. And the New Jersey Juvenile Detention Association canceled its booking for Sept. 19-23.

"In support of working families and labor, we felt we needed to be at a facility that treated its workers with more respect," said Bill Lavin, the FMBA's president. "We're very sensitive to that as public employees."

Jeff Payne, 46, and his partner, both casino workers, are five years away from paying off their house. But the veteran beverage server at Caesars Atlantic City is afraid it could take years longer than that to pay off the mortgage if steep casino wage cuts are approved.

"This is supposed to be the American dream, owning your own house," said Payne, who has worked at Caesars for 23 years. "The prize is so close, but it might be moving out of reach. Instead of paying off the house in five years, I may be taking out a second mortgage."

And with so many expenses tied to his house, Payne said, "There would be no going out to eat, no shopping, no vacations. I'd probably have to give up my car. If these jobs can't support a standard of living, who's going to take them?"

Robert Griffin, CEO of Trump Entertainment Resorts and president of the Casino Association of New Jersey, said the industry group is not taking a position in the ongoing talks, in which each of the nine casinos is bargaining separately with the union. The Borgata Hotel Casino & Spa's contract is in effect for another year.

"Talks continue for Trump, as well as our strike planning," Griffin said. "We are hopeful to reach an agreement and are working very hard with 54 to avoid a strike."

McDevitt said he expects the union to agree to continue negotiations past Thursday's contract expiration date, and said no one from the union is planning a work stoppage yet.


Wayne Parry can be reached at