Wynn dealers persist in fight to topple tip-sharing policy

By Liz Benston

Monday, July 13, 2009 | 2 a.m.

Nearly three years after Steve Wynn implemented a policy requiring that dealers share tips with their immediate supervisors, what he thought would be a short-lived skirmish has turned into an all-out war.

It’s the kind of battle dealers might not have fought in years past, when many lacked college degrees and other professional job options.

“They underestimated us,” said Daniel Baldonado, a bespectacled, quick-witted Wynn Las Vegas dealer and one of the four whose complaints were heard by the Nevada labor commissioner last week. “We left other jobs to come to Wynn. We’re smarter — and we’re not giving up.”

This, after a string of setbacks, including unsuccessful union contract negotiations, a dismissed class action lawsuit and thwarted attempts to clarify state law with a ballot initiative and legislation.

First on the witness stand was Wynn dealer Meghan Smith, an articulate young woman who lit out for Las Vegas after earning a business and international relations degree from Carnegie Mellon University and a master’s degree from the University of Oklahoma.

Both sides in this dispute have dug deep foxholes and mapped out lengthy strategies.

They plowed much of the same ground last week. Labor Commissioner Michael Tanchek will continue public hearings on the dispute Aug. 18-21 and make a final ruling as early as October.

The debate isn’t clear-cut, with effective or creative legal arguments to be made on both sides.

Though tips are considered taxable earnings, they are sometimes treated differently, with both camps using case law — different parts of the same rulings, in some cases — to bolster their case.

Generally, courts have determined that employers have the right to force employees to pool their tips — just as they have the right to establish wage rates and impose other policies and procedures. And yet, courts also say employers can’t directly benefit from employee tips or tip-pooling arrangements.

Wynn’s attorneys say Wynn isn’t taking the tips for his or his company’s benefit, and is instead requiring different groups of employees to share them. They argue this makes the policy legal under Nevada law, which states: “It is unlawful for any person to ... take all or part of any tips or gratuities bestowed upon his employees.”

That’s creative wordplay to the dealers, who say the policy has saved the company millions in payroll costs, as tips that would otherwise would have gone to dealers are diverted to supplement the earnings of “casino service team leads” — a supervisory title created in conjunction with the 2006 tip policy.

Wynn admits that he could have paid the supervisors a much higher base salary but instead chose to give them tips as a motivational tool. (A team lead’s base salary of $65,000 is $6,300 higher than that of the now-defunct floor supervisor positions. Yet each team lead receives an estimated $25,000 per year in tips representing the supervisors’ share of tokes deposited at dealer tables.)

The losing side is expected to file an appeal in court that could further delay a resolution. Even if Tanchek declares Wynn’s tip policy illegal, Wynn could appeal that decision in court, maintaining the policy during litigation.

Wynn dealer Leo Gemma, who stood among a crowd in 107-degree heat to protest the tip policy outside the hearing room in the Grant Sawyer building last week, seemed both motivated and disheartened by the proceedings. “I think the labor commissioner has already made up his mind against the dealers and this is a waste of taxpayer money,” he said.

Gemma and two other dealers fired another shot across the bow Friday, filing a federal lawsuit claiming Wynn failed to pay dealers wages owed under the Fair Labor Standards Act and breathing new life into the battle.

“This fight isn’t over,” Gemma said. “People don’t realize this kind of thing could happen to them.”