It took some time, but Steve Wynn got what he wanted.
In overruling a District Court judge who only appeared to have Nevada statute on his side, the state Supreme Court on Thursday released its unanimous decision that the mandatory tip-pooling policy at Wynn’s Strip casinos was legal. Dealers at Wynn Resorts Ltd. must share their tips with floor personnel traditionally considered supervisors.
The issue dates to September 2006, when CEO Wynn decided to cut in floor supervisors on a share of the dealers’ tip pool. Dealers argued the change in policy drained $5 million a year from their pockets and enabled the corporation to compensate supervisors without anything coming out of its own pocket. The Supreme Court disagreed.
Wynn issued a statement Thursday that endorsed the high court’s ruling and clearly expressed his considerable confidence in a legal process that went his way.
“We are a professionally managed organization respectful and mindful of the law in all cases,” Wynn said. “We review our decisions carefully before we implement any change affecting our employees.”
Wynn wasn’t as concise or as confident back on May 10, 2007, when he addressed a group of livid dealers who had seen their compensation decrease following the implementation of tip sharing. The management decision fueled a drive to bring in organized labor representation in the form of Transport Workers Union Local 721.
Back then, Wynn seemed downright apologetic.
“The reason we’re here is because of tension, consternation, and frustration and anger on the part of the dealers as a result of something I personally did in September — mainly change the compensation structure of the bosses using the tip pool of the dealers,” he said.
Wynn noted that he had been focused on the opening of the company’s megaresort in Macau and was “distracted.”
“This is a perfect example of how someone identifies the right problem and comes up with the wrong solution,” he continued, accepting full responsibility for the decision and admitting that the dealers’ tip compensation had decreased.
He also acknowledged the negative impact on his employees.
Wynn said: “I pride myself on the fact that I’ve been able to stay in touch with the people who work for me better than anybody — and have a feel for them … and created a family that resulted in each of my hotels achieving really great success. I was never confused about that. As you know, I’ve always known it was the people who worked for me. I took great pride in the fact that I understood that. ... I’ve got a 40-year history that’s unblemished until September in taking care of the people that work for me with great care and consideration.”
Mindful of the legalities of addressing his employees just prior to a union election, Wynn offered no promises to his disgruntled troops. He did, however, repeatedly admit he had made a mistake in crafting the mandatory tip-sharing policy.
“Unfortunately, I may have analyzed the problem, but I came to the wrong conclusion on how to deal with it,” he said. “Plain and simple, I missed it. I got it wrong. The effects that I thought my decision would have on the dealer pool were incorrect. More importantly, the effect that it had on you — I totally underestimated. And as a result, I lost, at least in this group, the feeling of family and happiness that has been the hallmark of my business career and, as far as I’m concerned, the source of whatever success I’ve had. A sad turn of events, as you make a mistake, that’s what happens.”
Wynn continued at length to express contrition and to implore his dealers to think before they voted to organize. But organize they did, and Wynn’s hat-in-hand routine was soon replaced by his attorneys’ dogged legal arguments.
Now he has prevailed before the state Supreme Court. Surely that’s cause for champagne and celebration in the corporate offices of Wynn Resorts.
The working people who have helped make Steve Wynn a multibillionaire, meanwhile, are left to dummy up and deal.
John L. Smith’s column appears Sunday, Tuesday, Wednesday and Friday. Email him at Smith@reviewjournal.com or call 702-383-0295. Follow him on Twitter @jlnevadasmith.