Friday, March 24, 2006

For many Strip workers employed at the current hotels, enthusiasm over that renaissance is mitigated by one nagging question: Will I have a job?

Even for the fortunate ones for whom the answer is yes, there still is the worry about how to get by between when the old hotel closes and the new one opens.

For many, severance payments can soften that difficult transition, giving workers a financial cushion until their next job while also allowing companies to maintain goodwill until those employees are needed again.

The problem is, some workers might not know about such payments ahead of time.

Companies generally do not advertise severance payments out of concern that people will take the money before making a good faith effort to find another job. Management also is concerned that the information will set a precedent.

Worker assistance has become a top priority of the Culinary Union, which represents nearly 60,000 hospitality workers on the Strip.

The Culinary Union recently negotiated a historic agreement with Boyd Gaming Corp. that will include severance payments for eligible union workers at the Stardust, a property to be torn down next year to make way for a $4-billion casino resort and hotel development.

Boyd is offering the same severance payments and other benefits for nonunion workers at the Stardust, which employs about 1,900 people.

The union hopes the deal, which will likely cost in the millions of dollars, will set a precedent on the Strip as future properties are torn down for redevelopment.

"We don't think this will be the last one that will close and be blown up for something new," Culinary Union Secretary-Treasurer D. Taylor said of the Stardust.

The Stardust severance payments will be based on years of service and apply to people employed after July 1 - a formula designed to keep workers around while redevelopment planning is under way. Workers with more than 20 years of experience will receive $10,000, with payments declining on a sliding scale to $1,000 for those employed for less than a year.

Boyd also has agreed to a "card check" procedure at Echelon Place - the union's preferred method of organizing workers and the means by which the Culinary has organized nearly all of the properties on the Strip over the past several years.

The company will give all of its workers preferential hiring at other company properties, including Echelon Place, the upscale resort complex that will open at the Stardust site by 2010.

Boyd is not the only company to open its wallet to displaced workers.

When MGM Mirage laid off about 700 employees at the now-closed Boardwalk casino to make way for a $7-billion collection of resort hotels and condos, most of those workers retired or ended up taking jobs elsewhere.

For the 100 or so people who could not find work after attending company job fairs, there was a surprise at the end - a severance check, plus paid medical coverage under the federal COBRA insurance plan.

The Boardwalk was a nonunion property, so the payments applied to all workers unable to find jobs at other properties.

The payments ranged from a month's pay for workers with less than a year of service to up to six months' pay for those with more than 10 years of service.

Rather than publicizing the humanitarian gesture, though, MGM Mirage kept the information close to the vest.

Severance payments are not company policy or written in stone, MGM Mirage spokeswoman Yvette Monet said. They are made "at management's discretion."

The company also offered severance payments when the company's Mirage closed its "Siegfried & Roy" show after Roy Horn was seriously injured by a tiger during a performance. The Mirage is remodeling the theater for a Beatles-inspired Cirque du Soleil show expected to open in May.

Arte Nathan, head of human resources at Wynn Resorts, said hotels have used severance payments in a variety of situations such as closing entire casinos and parts of properties.

"These are case-by-case situations," Nathan said. "I think it depends on the economic situation of that closure and of the corporation. There are a lot of factors that go into a decision like that."

Like other Strip casinos, the Riviera has used severance payments to soften the blow of a layoff. Workers who were let go when a keno room and a poker room closed years ago, for example, were offered payments.

"If you start publicizing it, you can get locked into something," said Duane Krohn, chief financial officer of the Riviera's parent company. "Management will always try to treat people as fairly as they can. But it's a discretionary decision."

Because redeveloped properties will be much larger than their predecessors and many workers will move on to other jobs while the new resorts are being built, the transformations will leave operators in need of skilled workers.

The Culinary Training Academy, a partnership between the Culinary Union and Nevada Partners is spending $8 million to add nearly 30,000 square feet to its North Las Vegas job-training facility.

"We are always trying to stay at least slightly ahead of what is happening so we can respond," said Nevada Partners Executive Director and state Sen. Steven Horsford, D-North Las Vegas.

In the past, most laid-off employees have been able to find jobs elsewhere because of Las Vegas' strong economy, he said.

Nevada Partners officials meet regularly with representatives of each of the 30 hotels - mostly big Strip properties - that are also board members to make them aware of the free training and job placement services available, Horsford said.

Many more workers may be seeking those services over the next several years. The Boardwalk and Westward Ho are scheduled for demolition this year, while the Stardust and New Frontier are expected to come down in 2007.

The Imperial Palace is expected to be torn down and replaced as part of a master plan that parent company Harrah's Entertainment is creating for its properties on the east side of the Strip, including the Flamingo, Harrah's and O'Sheas. Harrah's also is looking to acquire the nearby Barbary Coast property from Boyd to include that site in the development plan.

The future of the Tropicana is still in limbo, though parent company Aztar Corp. is expected to decide within months whether it will keep the property as is or tear it down to make way for a resort estimated to cost at least $1.2 billion.

The Culinary Union signed an agreement with the Tropicana in June 2003 ensuring that union workers would receive priority hiring should the property be redeveloped.

Taylor calls severance payments "the right thing to do."

"These older properties have workers who have been extremely loyal," he said. "There's some value placed on that loyalty. I think there's been some appreciation of that."

The union also is "working quite hard to get these people placed" given that many are not ready to retire, Taylor said.

The number of Stardust union workers exceeds the number of union jobs available at Boyd's other properties in Las Vegas.

The Stardust agreement could set a precedent for other properties on the Strip because the union likely will press for it again, said David Hames, an associate professor of management and labor relations expert at UNLV's College of Business.

"It's good human resources management practice from the standpoint of maintaining goodwill, especially if they want to hire them back if they rebuild their properties," Hames said. "I think it's a positive step."