Tentative deal reached to avert walkouts at half of Vegas casinos set to strike

Originally Published: 08 NOV 23 09:53 ET
Updated: 08 NOV 23 19:07 ET

New York (CNN) — A tentative five-year labor deal has been reached between the Culinary union and Caesars Entertainment to avert a potential strike at its nine casinos along the Las Vegas Strip, although nine other casinos still face possible walkouts come Friday morning.

The details of the agreement, which was announced in a tweet by the union, are not yet available, but the union said it was reached after 20 straight hours of negotiations. It covers 10,000 union members who work as cooks, bartenders, waiters and waitresses and housekeepers at the nine casinos owned by Caesars Entertainment.

The nine casinos on the strip owned by the company are Caesars Forum, Caesars Palace, Flamingo, Harrah’s, Horseshoe, Paris, Planet Hollywood, The Cromwell and The Linq.

The tentative deal will now be presented to rank-and-file members for a ratification vote. If they vote it down, they could still go on strike. But reaching a deal with one of the three casino operators along the strip increases the pressure on the other two companies to agree to similar deals before Friday morning’s strike deadline.

“We are excited to reach an agreement … which recognizes the integral contributions our team members have made to the success we have seen in Las Vegas over the last few years,” said a statement from the company. “Team members will see meaningful wage increases that align with our past performance, along with continued opportunities for growth tied to our future plans to bring more union jobs to the Las Vegas Strip. Through this agreement, Caesars Entertainment will ensure that as we grow, our Team Members grow with us.”

Other deals could be close

There could be another deal on the horizon. Negotiations were taking place Wednesday with MGM Resorts International, which owns another eight casinos on the Strip  Aria, Bellagio, Excalibur, Luxor, Mandalay Bay, MGM Grand, New York-New York and Park MGM. Talks also are scheduled for Thursday with Wynn Resorts, the other casino operator facing a strike threat. The union has said it will go on strike at 5 am local time Friday with any company with which it does not reach a deal by then.

MGM CEO William Hornbuckle told analysts during a conference call Wednesday afternoon that he believes a strike will be averted there as well.

“We are literally in session as we speak, and I believe we will come to a deal today,” he said. “We know from listening to our employees that they are looking for a pay increase, to combat inflation, as well as reduced workloads among other concerns. This deal when announced, will do just that and will result in the largest pay increase in the history of our negotiations with the Culinary union.”

A spokesperson for Wynn did not comment directly on negotiations at the other two companies.

“We have had our own productive bargaining sessions with the union,” said Wynn in a statement. “We are working to reach an agreement soon.”

Hornbuckle’s remarks were welcomed by Ted Pappageorge, secretary-treasurer for the union, and its chief negotiator. But he said Caesars executives made similar comments last week and it still took 20 hours of talks through the night Tuesday and into Wednesday morning to reach a deal.

“We welcome that sentiment,” he said about Hornbuckle’s comments. “We’re cautiously optimistic but we have a lot of work to do. No one wants to strike. We want to be very clear, if we can not get the contract we deserve, these workers have given the company notice and we will be prepared to strike.”

The strike threat comes just ahead of the city hosting its first F1 Grand Prix race that will include the Strip as a racetrack. Practice runs are scheduled for Thursday and Friday next week, and the race itself is set for Saturday, November 18. There are also concerts and other events scheduled, and by some estimates the weekend is expected to draw about 100,000 visitors to the city. Overall, the city has about 150,000 hotel rooms, according to the Las Vegas Convention and Visitors Authority.

Wages, benefits, job security major issues

The union would not give details of how much was won in the Caesars deal while negotiations continue elsewhere. Pappageorge called it “historic” and “life changing.” He said they will get immediate raises nearly as large as the $4.57 an hour increase in wages and benefit improvement won over the course of the previous five-year contract.

“We achieved our goals economically,” he said.

He said the companies are doing very well and can afford to meet the union demands. And he said workers are still suffering from rising prices, especially in rents. Many workers at the casinos work multiple jobs. One of the union’s main bargaining slogans is, “One job should be enough.”

In Las Vegas, typical rents spiked nearly 40% from prior to the pandemic, according to Zillow. Typical rent reached a high of $1,861 a month in July of 2022, which was up 38% from $1,351 a month in July 2019. Since that peak, rents in Las Vegas have come down slightly, following national trends, and the typical rent in the city was $1,808 in September of this year. But that’s still 33% higher than rent in September 2019.

The average Culinary union member in Las Vegas makes about $26 an hour, according to the union, but that includes benefits such as health insurance and pensions.

The union has already negotiated an unusually strong benefits package, including a traditional pension plan that pays members a set monthly payment as long as they live, zero premium health care coverage and a citizenship fund, that has helped 18,000 members become US citizens.

It also has culinary training to helps members in lower skill and lower paid jobs move into better paid positions, and there is a housing fund that pays as much as $25,000 toward the downpayment on a home purchase.

There are 25,000 Culinary union members between MGM and Wynn. Even with the 10,000 workers at Caesars no longer planning to walk out, a strike by those remaining 25,000 union members would be the largest in the hospitality industry in US history. But dealers and front desk staff are not included in the union and the casinos are likely to try to stay open if there is a strike.

“Historically these companies continue to try to operate during strikes,” Pappageorge said. “The reality is it takes a massive amount of labor to operate these resorts. Vegas can’t function without these workers.”

Strong industry profits

Wednesday afternoon, MGM reported net revenues from its Las Vegas Strip casinos of $2.1 billion in the current quarter compared to $2.3 billion in the prior year quarter. That’s a decrease of 8% due primarily to the sale of The Mirage to Hard Rock International in December and the cybersecurity issue in September 2023.

Last week, Caesars reported that net income rose 9% in the first nine months of this year to $792 million, while net revenue along the Strip rose 8% to $3.4 billion. Wynn is due to report results Thursday and it is forecast to post companywide net income of $78 million after a net loss of $135 million a year ago.

“These companies are doing well. We want them to do well,” said Pappageorge. “Profit margins through the roof, room rates are through the roof. The companies need to share the wealth.”

Strikes, and union wins, both up

Unions have been flexing their muscles this year, taking a number of workers on strike to levels not seen in decades. According to a strike tracker kept by Cornell University’s school of industrial and labor relations, there have been 348 strikes so far this year, up 56% from the same period of 2021.

US unions have been winning some large gains in recent negotiations, sometimes with a strike, sometimes without.

Most recently the United Auto Workers union reached deals with General Motors, Ford and Stellantis that included guaranteed wages of 25% over life of contract that runs through April of 2028, and a cost-of-living adjustments that could take the pay of most workers up more than 30% when combined with the guaranteed wages.

A coalition of unions at Kaiser Permanente won raises totaling 21% over the four-year deal reached after 75,000 union members there waged the largest health care strike in US history.

And the Teamsters union reached a deal with UPS in July that averted an August 1 strike by more than 340,000 members, which included a minimum of $7.50 in hourly wage hikes during the life of the contract and raising pay of a delivery driver there 18% to $49 an hour. It also eliminated a lower tier of pay for many union members and gave bigger pay hikes to some part-time workers.

But some unions have yet to be able to reach deals on new contracts, including 3,700 members of a coalition of unions — which includes the Teamsters and UAW — who have been striking three Detroit casinos since October 17. One of those casinos is owned by MGM.

About 15,000 union members have been waging a series of set-duration on-and-off strikes against 65 hotels in Los Angeles and Orange counties in California since July 4. And SAG-AFTRA, which represents 160,000 actors, has been on strike for nearly four months against the major studios and streaming services.

– CNN’s Anna Bahney contributed to this story.

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