ATLANTIC CITY, N.J. (AP) — Atlantic City's main casino union is asking groups that have booked conventions at the Tropicana Casino and Resort to take their business elsewhere as a labor dispute between both sides grows more contentious.
Local 54 of Unite-HERE says it has asked 30 groups to cancel bookings at the Tropicana to protest the casino's intention to terminate pension plans for its employees.
The Tropicana declared an impasse in contract talks last month and said it will unilaterally implement its final offer, which includes an end to pension contributions. The casino wants to give that money to workers in a cash payment or to their 401K accounts.
"There are lots of good choices in Atlantic City," Local 54 president Bob McDevitt said. "Right now, Tropicana is not one of them. They are not good corporate citizens, and we are addressing that with their customers.
"They are threatening to implement a contract which destroys the pensions of 1,200 workers," McDevitt said. "Their business model is to destroy the pensions of their workers, and we are not going to allow that."
The casino says no group has canceled a booking but acknowledges it is concerned about the effect of a prolonged effort to keep convention and meeting business from it.
"This type of response from the Unite-HERE leadership could have a devastating effect on our employees if convention groups go elsewhere," Tropicana president Tony Rodio said. "They're taking away overnight stays, which hurts housekeepers and room attendants, taking away people being on the casino floor and not getting drinks from beverage servers, or eating at the restaurants. They're hurting the Tropicana, but they're also hurting themselves."
The union used the convention-targeting tactic to great effect in a labor dispute with Resorts Casino Hotel last year, persuading at least three convention groups to cancel and go elsewhere. Local 54 has since declared a truce with Resorts as it attempts to work out a new contract.
So far, the union has contracts in place with eight of Atlantic City's 11 casinos at a time when both sides agree labor peace is needed more than ever. Atlantic City is reeling from lost revenue and jobs caused by fierce competition from casinos in neighboring states. Since 2006, its revenues have fallen from $5.2 billion to $3.3 billion at the end of last year.
The union and management at most of the casinos have worked hard to avoid labor disputes over the last year, realizing that a strike with the Atlantic City market in a weakened condition could prove disastrous, as customers now have more nearby gambling options than ever before. Local 54's 2004 strike lasted 34 days and inflicted serious damage on both sides before a pact was reached.
Rodio said the contract Tropicana will impose is identical in virtually every respect to contracts the union reached with the four Caesars Entertainment casinos and the two Trump Entertainment Resorts casinos in Atlantic City. The only difference is that the Tropicana would be making its payments directly to its employees instead of into The National Retirement Fund, a nationwide fund into which casinos, hotels and other businesses contribute.
Rodio said the fund is underfunded by $1.4 billion and was deemed to be in "critical status" in 2010 because of that liability.
He said because the Tropicana was purchased by billionaire Carl Icahn out of bankruptcy, it was absolved of responsibility for its share of the pension fund's liability. He said the casino told the union at the start of contract talks last summer of its intention to withdraw from the fund. Staying in the fund could expose Tropicana to significant liability, which threatens the future financial viability of the casino, Rodio said, declining to estimate the amount of the liability.
The casino instead will contribute the $1.77 per hour per employee that otherwise would have gone into the pension fund to an employee's 401k plan, or to a lump-sum cash payment, at the discretion of each employee for as long as they work at the casino, Rodio said.
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