MGM Resorts workers OK union contract, keeping free health insurance intact

The exterior of the MGM Grand on Thursday, June 6, 2013 on the Las Vegas Strip.

Culinary protest

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A new labor contract landed on the Strip late Wednesday when two prominent Las Vegas unions voted to accept the terms of a fresh five-year deal with MGM Resorts International.

More than 4,000 members from the Culinary Union and Bartenders Local 165 cast ballots, and 97 percent voted in favor of the deal. The lopsided tally followed on the heels of an 18-hour final meeting between union and casino officials on Nov. 5 at the Culinary Academy, where a contract emerged after four months of tedious chatter.

"This agreement is the result of months of hard work and frank, honest discussion of difficult topics,” said MGM spokesman Gordon Absher in a statement before the vote. “In the end, we accomplished what we set out to do: craft a fair contract in a difficult economy that works for everyone.”




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The contract includes some 26,000 waiters, bartenders and housekeepers from 12 MGM properties, accounting for almost half of the union’s 55,000 hospitality workers along the Strip. The vote heralded MGM as the first company to settle a contract since previous union agreements expired on June 1.

“MGM has taken a leadership position in the industry, forging a strong partnership for the future of both the company and the unions,” said the Culinary’s Secretary-Treasurer Geoconda Arguello-Kline.

While bosses from unions and MGM say the contract is a major victory for all sides, the terms of the deal reflect an economy still recovering from a crippling recession.

Under the new MGM contract, there will be no pay raises for workers in the first year.

Because of rising health care costs, MGM has agreed to tack on an extra 35 cents to its contributions to benefits, according to a contract booklet handed to union members before the vote. The increase bumps MGM’s total benefit contributions to more than $4 for every hour clocked by a union member and keeps health insurance free for workers, said Ken Liu, a researcher with Unite Here, the Culinary’s parent company.

In the second and third years of the contract, MGM will contribute an extra 50 cents and 55 cents to an economic package that already requires casinos to pay more than $21 per hour to union funds for pensions, health care and wages. A board of trustees decides how that money is allocated.

If health care costs remain flat in the second and third years of the deal, and the extra money is not needed, there will be wage increases, Liu said. The union pay scale differs from property to property, but Liu said wages typically hover around $16 an hour and vary by only a few cents.

Culinary members, some of the highest-paid hospitality workers in the country, said wage increases aren’t as important as health benefits.

“I only care about keeping my benefits,” said Patricia Lindsey, a 50-year-old guest-room attendant of the Bellagio.

Without the burden of paying for health insurance, Lindsey said she has found a good life in Las Vegas. She makes $16 an hour with the promise of a pension. Casino and hotel workers in Midwestern states make about $9 an hour, sometimes without hope of a pension.

“It’s a good day for me,” Lindsey said, directing hundreds of union members into a conference room at the MGM Grand.

The new contract calls for a “reopener” in the fourth and fifth years of the agreement. That means union and casino bosses will reopen negotiations in the last two years of the deal to adjust contract terms to reflect the changes in Southern Nevada’s economy, Liu said. It’s impossible to say what those terms might look like.

The second major provision of the MGM contract guarantees, if the company reopens a recently closed venue at specific resorts where workers lost their jobs, those workers can reclaim their jobs. The provision includes workers laid off since June 2010 and extends to Oct. 1, 2015.

If the program doesn’t bring members back to work, union officials say they have the option to eliminate it.

Going forward, the unions will now fight to secure a similar deal with Caesars Entertainment, which currently holds union contracts at 10 resorts along the Strip.

Experts say MGM’s new deal could force Caesars to ink a contract of its own sooner rather than later.

"The contract will put pressure on Caesars to adopt something very similar and to get it done," said Jeffrey Waddoups, a researcher and economics professor who studies unions at UNLV.

Without a contract, Caesars runs the risk of labor disputes, such as protests and strikes.

The Culinary has made that point clear throughout the year. Its members have staged dozens of protests outside the Cosmopolitan, where some 2,000 workers have been without contracts for two years. The union has launched labor-centric websites, such as, which warns potential Las Vegas visitors about potential labor disputes at properties going through contract negotiations.

The lack of new contracts along the Strip even prompted Unite Here, the Culinary' parent company, to warn Wall Street investors that a citywide strike would be imminent if bosses at MGM and Caesars did not sign solid deals fast.

Waddoups said Caesars will likely use the Culinary's contract with MGM as a working model in crafting their own contract. Culinary officials say it’s important for both companies to offer similar deals.

"The union wants fairly uniform propositions," Waddoups said, “because the union has an incentive to keep the propositions uniform."

It’s also not in the best interests of Caesars to offer unions a more favorable contract, Waddoups said. Better contracts for union members — which ideally includes higher pay and benefits contributions — would cost the company more money.

Waddoups said the higher cost would make it difficult for the gaming giant to compete on the Strip.