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Organized Thugs in Las Vegas

January 29, 2008

Tags Free MarketsInterventionism

On the surface, the Culinary Union in Las Vegas may have lost its touch in steering election results (the Culinary-endorsed Obama lost to Clinton in the Nevada Democratic caucus straw voting, but he picked up more delegates), but the heavy-handed union, which is part of UNITE-HERE, still has friends in government, at least in New Jersey, and perhaps beyond.

For only the second time in the state's 29-year history of legalized gambling, the New Jersey Casino Control Commission refused to grant a new license to the Tropicana Hotel & Casino owner Columbia Sussex. The result, in an amazing affront to private property rights, is that the hotel and casino have been placed in the hands of a trustee, retired state Supreme Court justice, Gary Stein, who will operate the property until it is sold. And to add insult to injury, The NJCCC has said the winning buyer will either pay the fair market value of the Trop or what Columbia Sussex paid for it originally … whichever is less.

The Commission voted 4–1 in December to deny the license, which was surprising because the New Jersey Division of Gaming Enforcement, which acts as prosecutor in licensing cases, had recommended granting a one-year license renewal, albeit with numerous conditions.

Of course, Robert McDevitt, president of UNITE-HERE Local 54, was overjoyed with the decision. The union battled with Columbia Sussex since the company took over the property a year ago over staffing levels. As a reason for denial, Commission members said there were complaints about bedbugs, roaches, dusty room tables, long waits for cocktails and surly desk workers. "Staffing was slashed in pursuit of profit, cleanliness was disregarded in order to meet a predetermined bottom line. Customer service was dismissed," in the opinion of commission Chairwoman Linda Kassekert, who prior to serving on the commission, according to the New Jersey Casino Control Commission website, "was the Associate Director of Government Relations for the New Jersey Education Association and also had 12 years of experience in various positions in state and county government. While at the NJEA, Chair Kassekert served as a lobbyist for the 179,000-member labor union which represents active and retired teachers and other professionals in the education community in the state."

"Simply put, I do not believe this applicant has the business ability to operate a facility of this size and magnitude given the decisions that were made," said Kassekert, who has never operated a business of any size.

In fact, by the looks of the résumés of the rest of the commission, there is no business experience on the New Jersey Casino Control Commission. Michael A. Fedorko, who cast the dissenting vote, worked 30 years as a New Jersey state policeman. William T. Sommeling spent 35 years in law enforcement. Michael C. Epps served as solicitor for the Atlantic City Board of Education and had been an attorney in private practice for several years with two Atlantic City area law firms. And Ralph G. Frulio worked for the commission on its inspection staff for almost 19 years prior to retiring at the end of 1996.

Those close to the New Jersey Tropicana situation say that UNITE-HERE was reported to have greatly embellished the complaints about pests and dusty rooms, feeding their version to a union-sympathetic commission in a strategy devised by Las Vegas Culinary Union 226 honcho D. Taylor.

Taylor and the Culinary are locked in the same labor battle at the Las Vegas Tropicana. While casino giants MGM Mirage and Harrah's quickly signed new union contracts last year, the Tropicana continues to hold out, leading the local Culinary to resort to buying two full-page ads recently in the Las Vegas Review Journal Sunday edition telling readers that New Jersey regulators had pulled the hotel operator's license and that Nevada gaming regulators should do the same.

Mr. Taylor doesn't need to buy ads in the Las Vegas Sun, which is delivered as an insert in the R-J as part of the Newspaper Preservation Act. He has columnist Jeff Simpson carrying union water every Sunday. His January 27, 2008 column entitled: "Jeff Simpson on the latest reason Nevada should yank the Trop owner's license" is typical.

Simpson starts by saying that he feels sorry for workers at the Tropicana. He goes on to tell the story that when workers at the property received their January 14th paychecks, they were told not to cash them for a couple of days. Simpson cited an anonymous Trop employee for this information, but went to D. Taylor for collaboration. Of course Taylor told Simpson, "This is clearly not accidental, and a lot of workers are getting screwed."

But Simpson didn't bother to contact Columbia Sussex to verify the salacious allegations. Had he, he would have learned that payday is every other Monday, and that for those working the weekends or that have pay direct deposited, they get their checks, or deposit information, a couple days prior to payday Mondays, but know that the funds won't be available until that Monday. Nothing nefarious is going on, no employees are told to "wait a couple days to cash their checks." Rather, employees are getting paid on payday. But, columnist Simpson doesn't even try to hide his agenda, writing, "When I noted that the Tropicana owners were the worst kind of executives — incompetent and arrogant, Taylor agreed."

"'They're like George W. Bush,' he said. 'And the Tropicana is like Iraq.'"

That's tough criticism from Taylor, but he's got some anger to spare for Nevada gaming regulators.

Of course Simpson brought up the subject of the company's license denial in New Jersey and Taylor said, "When a company loses its license for serious reasons and Nevada thinks it's OK, something's wrong."

There's something wrong all right and it's the tactics of UNITE-HERE. The union is presently involved in a number of significant lawsuits regarding: allegedly unlawful conduct committed during the course of the union's campaign to impose "card check recognition" on an employer and also, failure to provide benefits to their own employees and officers. The actual and potential liability of these lawsuits is considerable, estimated to be approximately $100 million.

One of the strategies that UNITE-HERE used to compel a Sutter Health hospital to enter into a card-check agreement to organize its laundry workers was to send out postcards to thousands of women of childbearing age who resided in areas serviced by the hospital. However, in Sutter Health v. UNITE-HERE, California Superior Court for County of Placer, Case No. S CV 17938, the jury found for Sutter Health in the amount of $17.2 million after it was demonstrated to the jury that the allegations contained in the UNITE-HERE postcards were entirely false and that, in fact, there was no evidence that any Sutter Health patient had ever been exposed to linen containing "blood, feces or harmful pathogens."

In the case of Cintas v. UNITE, et al., Case No. 04 CV 62477, Court of Common Pleas for Warren County, Ohio, Cintas is suing UNITE-HERE for defamation and misappropriation of trade secrets in a state court action in Ohio. The defamation claim arises out of UNITE-HERE's publication of a press release accusing Cintas of engaging in "widespread and major violations of law."

And it would probably surprise Jeff Simpson to know that over 130 former officers of UNITE-HERE and its predecessor unions have sued the union charging that the union and its officers violated ERISA by unilaterally reducing their vested retirement benefits. In many cases, the amount of the life insurance benefit was several hundreds of thousands of dollars. But, beginning in 2002, after these individuals had retired, the union substantially reduced the life insurance coverage of each plaintiff to $50,000 and then, in 2003, it further reduced the retiree's benefit to $5,000 each. The Levin v. UNITE et al., Case No. 03 Civ 4697 (GBD), U.S. District Court for the Southern District of New York and other cases demonstrates the union's callous disregard of the rights of its own employees.

Unfortunately, the union doesn't operate at the whim of regulators, as it appears to be run by "incompetent and arrogant" executives who only profess to have an interest in protecting employee rights when it serves its political appetite. And rather than being the object of governmental scrutiny, union efforts to destroy businesses that refuse to capitulate to their unreasonable demands appear to be assisted by regulators.

Ludwig von Mises explained labor union tactics in his book Socialism: "Strikes, sabotage, violent action and terrorism of every kind are not economic means. They are destructive means, designed to interrupt the movement of economic life. They are weapons of war which must inevitably lead to the destruction of society."

Because labor unions don't add to economic exchange, they must depend on having friends in government and in the press for their very survival. "Take away these special privileges and immunities [provided by government], and labor unions would sink back to their previous negligible role in the American economy." Murray Rothbard wrote this in 1973 in For a New Liberty.

Some things never change.


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