Labor works to beat Lowden
When Sue Lowden headed the Santa Fe hotel-casino, management forced a group of workers to shift to part-time status and sign away their health care coverage, said a judge who ruled the company violated fair labor practices.
March 7, 2010 - 12:00 am
When Sue Lowden headed the Santa Fe hotel-casino, management forced a group of workers to shift to part-time status and sign away their health care coverage, said a judge who ruled the company violated fair labor practices. He ordered the Santa Fe to pay two dozen employees almost $188,000 in back wages and benefits and to reinstate three workers who lost their jobs, records show.
The 1990s case, which involved a bitter war between the unions that tried to organize Santa Fe workers and casino executives Sue and Paul Lowden who fought the effort, is at the heart of the latest attack on the Republican U.S. Senate candidate by incumbent Sen. Harry Reid’s campaign.
It’s also a sign of things to come if Lowden remains in the GOP front-runner position and wins the June 8 primary election. Reid’s Democratic operatives are borrowing from the playbook of the powerful Culinary union that worked tirelessly to defeat Lowden in 1996 when she ran for re-election to the state Senate.
"The Lowdens campaigned viciously against the unions," said D. Taylor, secretary-treasurer of Culinary Local 226, who was involved in the effort to unionize the Santa Fe that started in 1993 and ultimately failed. "There were lots of twists and turns on this, and health care was one of the issues."
Taylor said the Culinary union isn’t coordinating with the Reid campaign and isn’t yet focused on one GOP contender. But it’s clear the 60,000-member organization has Lowden in its sights.
"We have already said a while back that we’re going to work hard to make sure that Harry Reid is successful in the election," Taylor said, speaking for one of the Senate majority leader’s core support groups in his uphill campaign to win a fifth term.
The AFL-CIO also is gearing up to help Reid and hit Lowden. Nationally, the labor group has identified Nevada as one of six states it will focus on. These states — including California, New York, Illinois, Ohio and Pennsylvania — feature both strong unions and must-win elections for Democrats.
Danny Thompson, executive secretary-treasurer of the Nevada AFL-CIO, said the state organization is in talks now to see how to coordinate the national effort to help Reid.
Thompson walked the picket lines against the Lowdens in the Santa Fe labor dispute, one that was especially intense because it involved an effort to unionize a neighborhood casino.
"It was among the most anti-union campaigns we’ve seen in this town," Thompson said. "Organizers were singled out and treated differently. It was a very ugly fight."
In the end, the National Labor Relations Board ruled in favor of the unions.
Lowden has "always touted her record against collective bargaining and her record against public employee unions," Thompson added. "There’s a clear message from her past that she is not a friend of anyone who works for a living. If Sue Lowden does win the primary we will be exposing her record."
Lowden’s campaign would not make her available for an interview. But Robert Uithoven, who is managing the campaign, defended her record, saying that as a state senator and private businesswoman, she had to balance budgets and make tough decisions.
"As any business owner in Nevada knows — and as our current state legislators know — tough economic circumstances require tough decisions, often leading to layoffs or other cuts," Uithoven said in a statement. "The Lowdens were cited by the NLRB because managers at one of their former properties tried dealing directly with employees. The union fought back — even though there was never a signed union agreement at the Santa Fe while the Lowdens owned the property."
Uithoven said Lowden further angered the unions when she refused labor’s appeals to vote to kill Nevada’s right to work status when she was a state senator and was the swing vote on the issue. (In a right to work state, membership in a union cannot be a condition of employment.)
While the unions have complained that Santa Fe management punished labor organizers by cutting their hours and benefits and, in some cases, their jobs, Lowden has accused union members of intimidation tactics as well, saying they were scaring her children by picketing outside her home.
The Lowden campaign often compares her experience as a private industry casino executive with Reid’s public service life. A lawyer by trade, the 70-year-old Reid has served in Washington for decades.
"Harry Reid has never worked in the private sector and he’s never created a private sector job," Uithoven charged, criticizing record deficits under Democratic leadership. "We appreciate any and all future opportunities to contrast Sue Lowden’s career as a job-creating Nevada businesswoman to Harry Reid’s career as a big-government, tax-and-spend, bankrupting career politician."
However, those very credentials that are central to Lowden’s campaign message in TV ads, the Web and on the trail — that she’s a businesswoman who built and managed several casinos in Las Vegas and Laughlin and created thousands of jobs — open her to criticism about her management practices.
The Reid campaign has dug into financial reports of the Lowden family gaming company, Archon Corp., to undercut her business experience. Annual reports filed with the Securities and Exchange Commission show Paul Lowden, as Archon chief executive officer, was paid $200,000 in bonuses in 2004 and again last year when the Archon-run Pioneer Hotel & Gambling Hall in Laughlin dropped 106 employees and stopped matching employee contributions to their 401k accounts.
Sue Lowden, who is executive vice president, secretary and treasurer of Archon, responded by saying she did not sit on the compensation committee that made those decisions.
Zac Petkanas, deputy communications director of the Reid campaign, said Lowden’s actions as an executive at Archon and the Santa Fe have "proven her idea of leadership is simply not something Nevadans can afford."
"Sue Lowden’s track record shows that she’s willing to do anything, even break the law, to save a buck by denying quality health care coverage for Nevadans," Petkanas said.
David Damore, a political science professor at the University of Nevada, Las Vegas, said modern campaigns often go after an opponent’s strengths instead of their weaknesses. That strategy was employed by Karl Rove, whose Republican tactics swept former President George W. Bush into the White House.
"She’s saying, ‘I’m a successful businesswoman. I’ve brought jobs to Nevada.’ And the Reid campaign is going to say, ‘OK, let’s look at your record,’" Damore said.
He said the Reid campaign clearly sees Lowden as his biggest election threat now that she’s leading the GOP pack, according to the latest Las Vegas Review-Journal poll, ahead of businessman and former UNLV basketball star Danny Tarkanian and former Reno Assemblywoman Sharron Angle.
"Reid is trying to drive up her negatives," Damore said. "She’s vulnerable. They’re just going to dig and dig and dig. And anybody who’s been in the gaming industry has enemies."
TV ADS TARGETED HARRY REID
Lowden’s newest TV ad prompted the Reid campaign to go after her on the health care issue. Her first two ads were biographical, but the latest spot smacked Reid directly for pushing health care reform.
"As a mom I know one-size-fits-all clothes don’t fit, aren’t comfortable and are seldom a bargain," Lowden says in the ad, speaking directly into the camera. "So why does Harry Reid want to force one-size-fits-all government health care on us? Harry Reid thinks Washington knows best, but I think we the people know best. Harry Reid’s big government health care plan will raise taxes, put a bureaucrat between you and your doctor, weaken Medicare, kill jobs, push us further into debt."
The Reid campaign countered that Lowden’s comments are misleading and that the plan wouldn’t raise taxes, kill jobs, increase debt or weaken Medicare.
The senator’s operatives then went one step further and accused Lowden of breaking the law by denying health care coverage to her employees when she was president of the Santa Fe. The campaign released documents obtained through the Freedom of Information Act to back up the accusations.
"Sue Lowden illegally denied health insurance to buffet workers both by forcing them to sign a document waiving their right to it and cutting their hours to render them ineligible for it," the Reid campaign said. "As a result, her company was found guilty of violating the National Labor Relations Act and was ordered to repay employees whose hours and benefits were unlawfully slashed."
The complex legal battles between the union and Santa Fe management came after workers from Sept. 30 to Oct. 1, 1993, voted 300-241 for unionization in a labor board-supervised election, according to published reports.
The Lowdens refused to recognize the results and dealt directly with workers in reducing hours and benefits instead of bargaining with union representatives.
According to the documents reviewed by the Las Vegas Review-Journal:
■ An administrative law judge, Burton Litvack, ruled on Jan. 23, 1997, that the Santa Fe Hotel Inc. was guilty of several violations of the National Labor Relations Act. The ruling came after a Feb. 8, 1996, settlement reached between the two sides following a five-day trial, according to the judge.
■ The judge said that around May 1995, the hotel-casino "acted unilaterally, and without affording the unions, as the exclusive collective-bargaining representative of the said employees, prior notice and an opportunity to negotiate on their behalf."
As a result, the Santa Fe management ended up "reducing the work hours of its buffet department server employees, reclassifying full-time buffet department server employees to steady-extra employees, and subsequent to reducing their hours of work, eliminating all benefits, which had been previously received by said employees."
■ The judge ordered the Santa Fe to pay $187,504.10 in back pay and benefits to affected workers, according to the labor board and correspondence between the agency and casino attorneys between November and December 2000. About two dozen targeted workers received payments, the board said.
■ The judge also ordered the hotel-casino to offer three named employees full reinstatement to their former positions or equivalent ones and reimburse them for any lost earnings and benefits.
The bad blood between the Culinary and Santa Fe management prompted the union to organize a heavy-duty campaign to ensure Lowden lost her 1996 election to Democrat Valerie Wiener, a former Reid aide.
The state Senate district in Las Vegas is heavily Democratic, but Lowden in 1992 ousted then-state Senate Majority Leader Jack Vergiels, causing the upper house in the Legislature to revert back to GOP control.
After the judge’s ruling, the Santa Fe was ordered to post a three-page notice to employees in the hotel-casino, admitting to the labor violations and promising not to repeat them.
"WE WILL NOT unilaterally, without prior notice to and affording the Unions an opportunity to bargain in their behalf, reduce the work hours of buffet department servers, reclassify them to steady-extra status, and eliminate all employment benefits for said employees," read a key point in a list of 17 "WE WILL NOT" and "WE WILL" promises, including a vow not to fire workers over the issue.
A few years later, in 2000, the Lowdens sold the Santa Fe to Station Casinos for $205 million without ever signing an official labor agreement with the unions, winning the war but at a high cost.
"Ultimately we were never able to secure a contract with them," said Thompson of the AFL-CIO, noting the casino remains nonunion. "They sold that property and everyone had to reapply for their jobs."
Contact Laura Myers at lmyers @reviewjournal.com or 702-387-2919.Santa Fe/NLRB Ruling
Correspondence regarding back wages/benefits
Lowden TV ad