Wynn dealers lose Supreme Court tip sharing decision

CARSON CITY — Two Wynn Las Vegas dealers who filed a class action lawsuit in 2006 to end a tip-pooling program implemented at the Strip casino lost their case Thursday before the Nevada Supreme Court.

The court said in a unanimous decision written by Justice Michael Douglas that the Nevada labor commissioner was the appropriate person to consider complaints under the state's labor laws.

The decision upheld a lower court ruling in favor of Wynn Las Vegas and returns the dispute to the labor commissioner for further proceedings on the matter.

Daniel Baldonado and Joseph Cesarz, the two Wynn Las Vegas dealers, argued the Wynn policy violated Nevada state law covering tip pooling because management was sharing in the tips.

The dealers said they filed the lawsuit on behalf of more than 500 dealers affected by the new program.

But Douglas wrote that the challenge to the policy did not belong in court.

The court also found that because the dealers are at-will employees, which means the employer can modify employment terms unilaterally, they could not demonstrate a breach of contract because of the new tip sharing policy.

The opinion upheld the lower court's rejection of attorneys fees sought by Wynn Las Vegas.

"I'm going to have to get everybody together and see where they want to go next," said state Labor Commissioner Michael Tanchek after reading the decision.

Attorneys for the dealers stressed that the Supreme Court's decision did not address the merits of the case, just sent the dispute back to the labor commissioner.

"It's a setback and a delay," Reno-based labor attorney Mark Thierman said. "But not a defeat."

Attorney Leon Greenberg, who argued the dealers' case in both courts, called the ruling a "purely procedural issue."

"No determination was made as to whether the Wynn tip policy is illegal or proper under Nevada law," he said. "We expect that this dispute will proceed and eventually be determined on its merits."

He added: "We will continue with our efforts on behalf of the Wynn dealers."

Steve Wynn and Wynn Las Vegas officials declined to comment.

Both Baldonado and Cesarz are still working at the Wynn Las Vegas.

Baldonado, who has dealt at Wynn Las Vegas for three years, wondered if the court's decision was tied to something more than just looking at the law.

"When a ruling like this comes out it makes me wonder about the legitimacy of what's going on in our judicial system and the casino industry's ties with the judicial system," he said.

"It just seems like the gaming industry, it takes precedence over the people," Baldonado said. "Even in a situation like this, this wouldn't hurt the gaming industry at all, but it hurts the average tip earner in the state."

Baldonado, who said he makes nearly 14.5 percent less since the policy was introduced, expressed concern that if the labor commissioner rules with Wynn, the tip-pooling policy will spread to other casinos.

"The fact that it's being fought now is the only reason it hasn't spread," he said. "Had there been no fight, every other casino would already being doing this. There's no question."

Besides the challenge by Wynn dealers, the tip pooling policy is being challenged in a different arena as well. The Committee to Prevent Employers from Seizing Tips, or PEST, is circulating petitions to bring the issue to the Legislature. Backers have until Nov. 11 to gather 58,836 signatures to either force the 2009 Legislature to take action to abolish the policy or send it to a public vote in 2010.

Wynn Las Vegas on Sept. 1, 2006, began allowing table game supervisors to share in the tips earned by dealers. Wynn executives said the move was done to correct the widening disparity between the wages earned by dealers and casino floor supervisors.

Wynn Las Vegas executives said at the time the new policy was introduced that the casino's dealers were earning about $100,000 annually in salary and tips. The new tip-pooling policy meant an average pay reduction of about 20 percent.

Table game supervisors were given a boost in salary and were allowed a percentage of the tips to bring their compensation up to what dealers were earning. The casino also instituted a bonus program for dealers.

Clark County District Judge Douglas Herndon dismissed the lawsuit in late 2006. That decision was appealed and the Supreme Court heard oral arguments in the matter in April.

At the oral argument, Greenberg argued the change in the tip-pooling policy violated an employment agreement drafted before the property opened and that the new policy forcing dealers to share tips with supervisors violated state law.

The resort's attorney, Greg Kamer, described the policy change as a "modification" that changed the title and duties of casino floor supervisors to team leaders. He told the court the intent of the change was to improve customer service, and provide better game protection and greater accountability with front-line casino employees.

The dealers' filed their lawsuit after Tanchek rejected complaints about the tip pooling program from more than 100 dealers. Tanchek said Thursday that his initial rejection was only a preliminary finding, and that a formal hearing in the dispute can now go forward.

A hearing had been set for March but was postponed because of the court case. The case awaiting action by Tanchek is for a wage claim filed by former Wynn dealer Megan Smith who is challenging the legality of the new policy and seeking $8,334 in unpaid tips.

In May 2007, full-time dealers at the resort voted by nearly a 3-to-1 margin in favor of representation by Las Vegas Dealers Local 721, a division of the New York-based Transportation Workers Union of America.

A collective bargaining agreement has not been reached and negotiations have been suspended until after the November elections.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal or 775-687-3900. Contact Review-Journal writer Arnold Knightly at aknightly@reviewjournal.com or 702-477-3893.