Palms’ decision to turn over restaurants to outside operator sparks dispute

More than 220 Palms restaurant employees have to reapply for their jobs after the off-Strip hotel-casino turns over some of its restaurants to an outside operator.

Workers were informed last month of the Palms' plans through a letter. The casino has contracted Sodexo to oversee operations of the 24 Seven Cafe, Bistro Buffet, room service operations, employee dining room and associated support departments beginning Nov. 2.

In a statement, the Palms said employees affected by this change were offered positions with Sodexo, positions at other Palms operated venues or "generous" severance packages based on time spent with the company.

However, Culinary Local 226 claims the action is taking place because the union wants to organize the Palms restaurant employees. In June, the Culinary's organizing committee of Palms employees delivered a petition to Palms CEO Todd Greenberg and asked management to remain neutral and allow them to make their own decision about unionization.

A Palms spokesman said Thursday the resort had been in talks with Sodexo as a potential third party operator for the restaurants since the beginning of the year. The June petition was the first time the resort knew of the union's organizing efforts.

In an emailed statement, the Palms said it was presented with a letter signed by 26 employees requesting that the company remain "neutral" about the issue of union representation.

"Palms estimates that the applicable bargaining unit at Palms would constitute approximately 914 employees and therefore Palms estimates that the 26 signatures represent less than 3 percent of the applicable bargaining unit," the resort said. "Palms management has not been made aware of any other petitions by Culinary 226 since June 4."

The Palms operators have added restaurants Lao Sze Chuan, Cafe 6 and a Hooters to the resort.

Private equity firms TPG Capital and Leonard Green Partners have owned the Palms since 2011. TPG is one of two private equity firms that is majority owner of Caesars Entertainment Corp.

"We urge private equity firms to create sustainable jobs in Las Vegas," Culinary Secretary-Treasurer Geoconda Arguello-Kline said in a statement. "The Palms decision to outsource hundreds of positions is disappointing and does not support a strong middle-class economy."

Palms officials said other resorts in Las Vegas have turned over high-volume restaurants to third-party operators.

In the letter to employees, dated Aug. 17, the Palms offered severance packages to employees not retained by the new operator or who chose not to reapply.

"We are working with Sodexo to transition as many people as possible and offer additional options," Palms Vice President of Human Resources Laurie Luongo said in the letter.

The Culinary said local faith leaders were expected to join Palms employees in delivering a second petition to Palms on Thursday.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Find him on Twitter: @howardstutz