Court revives suit on overtime pay for casino banquet servers

By Steve Green

Thursday, May 13, 2010 | 11:17 a.m.

A federal appeals court has revived a class-action lawsuit alleging Nevada casino banquet servers are being denied time-and-one-half overtime pay.

In a case against MGM Mirage's Mandalay Bay casino resort in Las Vegas, the 9th U.S. Circuit Court of Appeals last week overruled U.S. District Judge Roger Hunt in Las Vegas, who had dismissed the lawsuit.

Banquet server Sidney Jacobs argued in a 2008 state court lawsuit that Mandalay Bay's policy of not paying overtime to banquet servers violated state law requiring time-and-one-half payments for hours in excess of 40 hours per week.

Mandalay Bay successfully moved the case to federal court in Las Vegas, arguing the dispute was covered under federal law and required interpretation of the Culinary Union contract covering banquet servers and other workers. Hunt then sided with the casino company and dismissed the case.

The Culinary Union contract is in line with the practice in the Nevada hotel industry that banquet servers receive an hourly wage and a set percentage of banquet service charges, but not overtime.

The appeals court ruled that the dispute clearly involved interpretation of Nevada's wage and overtime law, not the union contract, and sent it back to Clark County District Court for further litigation.

"The right claimed by Jacobs clearly inheres in the Nevada statute," the appeals court said.

"Mandalay argues that Jacobs may be 'exempt' from protection under state law, and that the court must interpret the terms of the collective bargaining agreement to determine whether Jacobs is in fact exempt," the ruling said.

But the appeals court found that the U.S. Supreme Court has ruled that contracts bargaining away state law protections must be "clear and unmistakable" on that point -- and that in this case, "there is no clear statement that banquet servers have bargained away their state law overtime protections."

The Jacobs case, proposed as a class action against 27 hotel-casinos, is far from resolved.

Ruling in March in another suit filed against Las Vegas Sands Corp.'s Venetian resort, Clark County District Judge Linda Bell said the Nevada overtime law specifically exempts hotel banquet servers.

Reno attorney Mark Thierman, who represents Jacobs, said he's hopeful his case and the case against the Venetian will eventually be heard by the Nevada Supreme Court for a definitive decision on the issue.

"We'll see if the Nevada Supreme Court says 'let them eat cake,"' Thierman said Thursday.

Attorneys representing the hotel workers have long argued that banquet servers logically can't be covered by an exception to the overtime law for sales people, since the banquet servers don't sell anything.

The workers' attorneys say that by not having to pay overtime, the hotels have no incentive to limit overtime and hire additional workers to cover banquets.

But hotel attorneys have argued that even without overtime, many banquet workers earn six-figure incomes and appreciate their flexible schedules that involve long hours some days, followed by plenty of time off between events. The hotel attorneys have noted the Culinary Union has specifically argued against amending the Nevada overtime law to cover the banquet servers.

"Jacobs disingenuously attempts to portray himself as a relatively low hourly wage earner at approximately $12 per hour. In reality, what is true for Jacobs and the banquet servers to whom he claims he is similarly situated, his rate per hour of work typically exceeded $50 per hour. By way of example only, for the week of Feb. 11 through Feb. 16, 2007, Jacobs worked 22 hours and received $1,286.38, which equates to $58.47 per hour," Mandalay Bay attorney Elayna Youchah of the Las Vegas office of the law firm Jackson Lewis LLP noted in a court brief.