Las Vegas CBS KXNT- Wynn Las Vegas and its dealers met before the Nevada Supreme Court on Wednesday to resolve a long-standing dispute over whether the company has a right to impose tip sharing with casino floor supervisors.
Dealers claim the company is enhancing its own bottom line from a policy that redirects a portion of their tips to bolster the salaries of their supervisors.
The concept of “direct benefit” became a focal point, as the dealers claimed it’s key to determining the legality of the tip-sharing scheme. Attorney Leon Greenberg told the Court that employer-mandated tip sharing can’t serve as a way for the company to offer a pay raise to people outside the class of employees who have received the tips. He said before the policy went into effect, the floor supervisors earned $30,000 less on average than the dealers.
Wynn argued that Nevada law defining the limits of employer-mandated tip sharing has been settled for several decades, and that it’s a widely-practiced management tool for improving service and general employee morale. Attorney Eugene Scalia said a finding in favor of the dealers would be disruptive to business, including the restaurant industry, where waitresses share tips with bus boys and bartenders, who don’t interface with the customer, but contribute to the experience.
Scalia said the policy is a condition of employment like any other, which prospective employees are free to reject, and which becomes part of the accepted terms when they accept the job.
He pointed to the initial decision in the dispute, issued by Nevada’s labor commissioner, which found the policy legal, and found that Wynn does not actually take possession of the money. After “considerable testimony,” Scalia said, the labor commissioner also concluded that tips often reflect gratitude for all employees who contribute to the customer experience, or for a good night at the tables, and that they are not necessarily intended for the person who receives them.
The commissioner’s decision was subsequently challenged in district court.
The Wynn opened in 2005 with a policy that pooled dealer tips, and then distributed them based on hours worked, but not to people outside the dealer category. A committee of elected dealers counted and distributed the money. Wynn policy also prohibited management from accepting tips, according to court documents.
The following year, Wynn altered the policy to create ” casino service team leads” consisting of floor supervisors and and pit managers, who were to receive a portion of the dealer tips. The dealers responded with a class action against Wynn. The dealers responded with a class action against Wynn.
The class was not accepted. The named dealer in the case before the Supreme Court is Daniel Baldonado.