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Wynn lawsuit accuses Fontainebleau of ‘unhealthy obsession’ with resort, poaching employees

Updated March 1, 2024 - 5:06 pm

Executives of Wynn Las Vegas have long thought Fontainebleau was trying to replicate the Wynn experience, even going so far as to steal some of their top employees.

Now, the company has filed a lawsuit to stop it.

It began in mid-2022, a year and a half before Fontainebleau opened its doors on the Strip, as the Fontainebleau executive team was being formed. Wynn officials said Fontainebleau solicited Wynn executive employees knowing they were under contract and had non-competition agreements with Wynn that would preclude them from working at Fontainebleau for at least a year.

Executives of the two resorts met and, according to Wynn officials, agreed Fontainebleau wouldn’t do it anymore.

But the problem persisted, even through February, according to Wynn, leading the resort late Thursday to file a lawsuit in Clark County District Court accusing Fontainebleau of interfering with actual and prospective contractual relations.

The Wynn lawsuit names Fontainebleau Las Vegas II LLC, Fontainebleau Development LLC, Bowtie Development LLC, all doing business as Fontainebleau Las Vegas, and 10 unnamed individual defendants.

Injunction sought

The single-count, 10-page lawsuit asks the court for an injunction prohibiting Fontainebleau from further efforts to poach employees and for damages in excess of $15,000 as determined by the court.

“Clearly, we want all operators in Las Vegas to be successful; it’s good for the city in which we all live,” the company said in a statement issued after the lawsuit was filed. “We just want that to happen without interference in the contractual agreements our employees have negotiated with us.”

In response to an inquiry from the Las Vegas Review-Journal, a Fontainebleau representative said, “As a matter of company policy, we do not comment on pending litigation.”

The lawsuit paints a vivid picture of how Wynn officials believe Fontainebleau is trying to steal key pieces of its workforce.

“… Fontainebleau simply cannot stop interfering with WLV’s employment contracts,” the lawsuit says. “Fontainebleau’s conduct is demonstrative of an unhealthy obsession with everything Wynn, from its amenities to its employees.”

The lawsuit lists dates and names regarding Fontainebleau recruitment efforts, even coming to the Wynn property as paying guests to gain access to the workers they sought to persuade to jump ship.

Most of the examples listed in the lawsuit involved employment offers to Wynn’s nightlife, restaurant and executive chef lineup. In the lawsuit, Wynn cited nine instances in which a Fontainebleau executive reached out to a Wynn employee. In some cases, recruited employees reached out to their former colleagues at Wynn to bring more in.

In the first instance, the lawsuit said Fontainebleau General Counsel Mike Pappas made contact with David Snyder, who was a part of the senior leadership opening team for all six Wynn Resorts worldwide and had a renewed contract signed in January 2021. In June 2022, Snyder gave notice that he was moving to Fontainebleau on July 8, 2022.

“Snyder informed WLV’s (chief operating officer) that he intended to engage in a similar function for Fontainebleau as he had for WLV,” the lawsuit said. “Fontainebleau had recruited and hired Snyder to help open its new resort on the Las Vegas Strip.”

Earlier lawsuit settled

That action sparked Wynn to file a lawsuit against Fontainebleau and Snyder the next day in District Court. But ultimately, both sides settled the case and Fontainebleau said it would quit trying to recruit Wynn employees under contract. The lawsuit said, “Snyder and Fontainebleau agreed, among other things, that they would ‘not directly solicit any WLV employees, including by any outside recruiting agents working on behalf of defendants.’ This non-solicitation covenant was to remain in effect through July 8, 2023.”

But it occurred several times more with bids to hire away sous chefs, a pastry chef and the vice president of nightlife, Wynn contends in the lawsuit. At one point, Wynn CEO Craig Billings made direct contact with Fontainebleau CEO Jeff Soffer urging him to stop.

The most recent incident occurred last month, Wynn claims in the lawsuit.

In January, Michael Waltman, senior vice president of nightlife at Fontainebleau, called Wayne Crane, senior executive director of nightlife and the head of XS Night Club and Encore Beach Club, to encourage him to leave Wynn and work for Fontainebleau.

You’re ‘not appreciated’

“Waltman told Crane that Crane was ‘not appreciated over there’ at WLV,” the lawsuit says. “… Waltman knew that Crane was subject to a non-competition agreement and that accepting employment with Fontainebleau would breach that agreement.”

Crane, who was supposed to start at Fontainebleau this month, ended up staying. He gave notice to leave Feb. 12, but Wynn officials — after giving Crane a raise — persuaded him to stay.

“WLV had only two options: to allow Crane to leave, causing substantial harm to WLV’s nightlife business, or to mitigate damages by convincing Crane to stay at WLV for a substantial pay raise,” the lawsuit said. “WLV was able to convince Crane to stay at WLV. However, to do so, WLV had to significantly increase Crane’s salary — a direct result of Fontainebleau’s tortious interference with Crane’s employment agreement.”

Asked whether Wynn has had similar problems with companies poaching their employees, a company spokesman said it has been an occasional problem when a new Strip resort opens its doors – but he wouldn’t say what other companies engaged in the practice.

“As the premier resort in Las Vegas, we have had other operators attempt to interfere with our employment contracts and have historically resolved them through negotiation but have not hesitated to protect our rights through litigation,” the spokesman said.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.

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