Monday, Nov. 23, 2009 | 2 a.m.
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The Culinary Union heightened the drama in its fight with Station Casinos last week, blaming a management-led buyout for the company’s bankruptcy filing and aligning itself with the company’s creditors.
The union issued a detailed report on the company’s financial woes, arguing that Station could have avoided bankruptcy had it not pursued a $5.7 billion deal to take the company private in 2007. It concluded with a call for creditors to demand that Station’s owners reinvest a significant part of the profits from the deal to help the company recover.
The move is the latest chapter in the Culinary’s ongoing battle to organize the 13,000 workers of the nonunion casino giant, and piggybacks on a lawsuit filed by a group of aggrieved creditors that claim the company relied on unrealistic, rosy financial assumptions.
“When you’re organizing you’re always looking to figure out how to make strange bedfellows,” said Janice Fine, a Rutgers University labor relations professor. “Where are the common interests with other players who have leverage?”
Labor experts say the strategy also fits with the union’s long history of corporate opposition campaigns and reflects a larger trend within the labor movement to paint unions as the moral counter to corporate excess and focus public and employee outrage on management.
Among the union’s findings: Company insiders, led by the Fertitta family, nearly tripled Station’s long-term debt from 2005 to 2007, borrowing money to buy back 14 million shares and complete the buyout. Forty percent of the proceeds — more than $660 million — went to company insiders. The Fertittas alone received $495 million.
“Clearly, the owner-managers and other insiders were more interested in extracting wealth from the company for themselves than ensuring its and its employees’ future,” said D. Taylor, Culinary secretary-treasurer. “Now it’s time for them to give back.”
Station, which filed for Chapter 11 bankruptcy protection in July, has said its reorganization is the result of the recession, not the terms of its leveraged buyout. In a statement, spokeswoman Lori Nelson called the report “silly” and dismissed it as “just more of the same corporate harassment by the Culinary Union leadership that has been going on for years due to their frustration over not being able to persuade our employees to join the union.”
Nelson said the report failed to include the nearly $900 million the Fertitta family reinvested in Station as part of the leveraged buyout.
Regardless, the Culinary sees Station’s bankruptcy as the most significant opening yet for its organizing campaign. The union has used bankruptcy proceedings in the past to outmaneuver hostile employers.
In 2000, the Aladdin opened nonunion and fought the Culinary’s organizing efforts. But when the debt-laden company filed for Chapter 11, its expenditures, including those for management labor lawyers, became subject to court approval. The union then stepped up its campaign, staging protests and filing complaints of unfair labor practices.
“Historically, the hotel union, when they encounter companies that resist and pursue anti-union strategies, they continue to go after them, they never let them alone,” said Rick Hurd, a Cornell University labor expert. “That demonstrates to other companies that there are costs that go along with fighting the union. It also demonstrates to workers that the union has their best interests at heart.”
Attempting to stoke public outrage, the Culinary also highlighted in its report a number of Station’s cost-cutting measures, including the suspension of 401(k) matching and the doubling of health care premiums. The report also notes layoffs, slashed shifts and the expansion of subcontracted restaurants.
Station called the report a waste of time:
“You would think that in these difficult economic times, when thousands of union members have lost their jobs, that the Culinary Union leadership would have something more productive to do with their members’ dues than to create and distribute this silly report concerning a bankruptcy proceeding in which they have absolutely no involvement.”
Pilar Weiss, the Culinary’s political director, disagreed, saying the union is dedicated to “fighting for all casino workers — both union and nonunion.”