Nevada Casino Tipping Battle an Employment Issue Worth Watching

Las Vegas, NVIt's an employment issue that not only has everyone in the Nevada casino industry sitting up and taking notice, but pretty much everyone in the hospitality industry there. Everyone from servers in family restaurants, to the dealers and their supervisors on the casino floor are anxiously watching how the Wynn Las Vegas issue plays out.

As lawsuits go, this is a dandy.

As summarized in the Las Vegas Sun (7/27/12), dealers employed in Nevada casinos are some of the best-paid casino workers around, given their access to tips from well-heeled customers. According to the Sun, if they shared their tips at all, the dealers shared amongst themselves. Such generous tip income resulted in dealers taking home some of the larger pay packets, with some dealers making more than their supervisors, once tip income was factored in.

That all changed at Wynn Las Vegas when owner Steve Wynn decided, in 2006, to begin including managers in the dealer tipping pool. As a result—a first for the casino industry—dealers were required to share their tips with their supervisors.

With the change to employment tipping, Wynn had his reasons: bringing supervisors into the tipping pool would foster increased customer service amongst supervisors, according to the report. And with the potential for supervisors to make additional coin from tips, it would be easier to recruit new supervisors from the dealer pool.

Unhappy with the change, dealers at Wynn Las Vegas took the unprecedented step of joining the Transport Workers Union (TWU), not to mention filing a complaint with the labor commissioner's office of Nevada. The latter upheld Wynn's right to expand the tipping pool to casino managers.

However, an employment lawsuit challenging the labor commissioner's ruling resulted in a reversal of that decision based, according to a finding by Clark County District Court Judge Kenneth Cory, on state law that prevents employers from benefitting through the sharing of tips, and the requirement thereof.

Judge Cory's position, based on state law, holds that by requiring dealers to share tips with casino managers, the owner in sum is using those tips to partially fund higher salaries for Wynn Las Vegas managers.

That Nevada employment ruling has been appealed to the Nevada Supreme Court. Complicating the issue even further is an opposition position taken against the dealers by the Culinary Workers Union, which fears a victory by the dealers would put into jeopardy existing agreements state-wide governing the sharing of tips between workers and supervisors.

It should be noted that the TWU is not a party in the Supreme Court lawsuit. While the TWU represents the dealers at Wynn Las Vegas, it is not a participant in the lawsuit per se.

Judge Cory's ruling, if upheld, "could preclude employers from requiring servers to share tips with bartenders, bus persons or dishwashers," a proposed brief from the Nevada Resort Association and the Nevada Restaurant Association, published in the Sun, states. The ruling "raises important policy issues about whether courts should interfere with legitimate business decisions and, in doing so, discourage companies from engaging in creative methods for improving customer service, employment satisfaction or employment compensation."

The Culinary and Bartenders unions, which are considered quite powerful, represent more than 60,000 workers in the state of Nevada. Given that the state hosts so many enterprises in the hospitality and service industry, it's not surprising this Nevada employment legal battle has everyone watching very closely.