After 25 years and numerous failed attempts, organized labor has managed to gain a foothold on the gaming floors of Atlantic City. There is a potentially positive future for the union movement.

Unions in the United States date back to colonial America when groups of artisans and craftsman formed “guilds”. Historically, the Declaration of Independence was signed in 1776 at the gathering hall of the local Philadelphia Guild of Carpenters.

For the next 150-plus years, working conditions and practices in the US often deteriorated, resulting in child labor abuses, unsafe working conditions and other employment ills. Journalists, legislators and citizen groups exposed these acts to the public.

Responding to the civilian outcry, the federal government passed the Clayton Act in 1914. It specified, “the labor of a human being is not a commodity or article of commerce.” This crucial legal definition paved the way for modern organized labor.

Since then, unions have emerged in most industries that service millions throughout the US, including teachers, nurses, automakers, miners, etc. While intent on protecting workers, dishonesty, corruption and legal problems have also plagued the union movement.

With rosters once numbering in the tens of millions, union membership has significantly declined. However, unions remain an important economic and political force within the American labor force since candidates still seek their endorsements during political campaigns.

As the American gaming industry has expanded, so has organized labor’s interest in it. Non-gaming floor employees – restaurant workers, housekeepers, etc – have long been amicably represented in numerous jurisdictions. However, personnel in the pit and cash areas of many properties throughout the US have avoided inclusion.

Atlantic City is a prime example of how organized labor – in this case, the United Auto Workers (UAW) – has recently penetrated the dealers’ ranks after numerous failed attempts since 1982. Now, some casinos have voted to accept them in 2007.

Founded in 1935, the UAW is one of the largest and most diverse labor unions in America. It has approximately 640,000 active members and more than 500,000 retired members in the US, Canada and Puerto Rico.

The UAW now represents 7,000 gaming employees in Detroit, Atlantic City and Newport, Rhode Island. The International Union, UAW reports that there are also organizational drives at the Casino Aztar riverboat in Evansville, Indiana and Connecticut’s megasized Foxwoods Casino.

Why the growing interest in organizing? The answer may be in the ongoing evolution of ownership. In New Jersey, one of the original regulations of the 1976 Casino Control Act limited the number of licensed properties per owner to three. However, that has since changed.

There was also long-term ownership of several properties. For example, Tropicana had one owner for more than 25 years, as did Harrah’s. The Trump properties were also very much under Donald Trump’s control.

Frequent corporate mergers and the change from privately-owned casinos into publicly-traded conglomerates have struck a chord with labor advocates. The acquisitions have often meant a “belt tightening”, terminating longtime employees. For those who remained, the working conditions have frequently deteriorated.

For example, Tropicana’s new owner, Columbia Sussex Corp., purchased the company last January. Since then almost all key management Atlantic City personnel have exited, and more than 750 employees have lost their jobs.

Added to those factors is the growing competition and legislative mandates. For almost 20 years, Atlantic City flew solo. Las Vegas and the Caribbean were its only competitive destinations, and they were thousands of miles away.

Heralding a new era, Delaware opened its three racinos in the mid-1990s. Neighboring Pennsylvania debuted the first few of its eligible 14 slot parlors last year. Plus, the new, more restrictive New Jersey smoking ban has impacted Atlantic City’s casinos.

The result is a decline in revenues for each of the past several months. Anthony Rodio, regional president of Hilton Atlantic City and its sister property, Resorts Atlantic City, has said: “The Atlantic City casino industry is facing its most difficult economic times since the inception of casino gaming.”

The UAW has entered the marketplace, pitching the dealers’ groups at most casinos, to sway them to vote for unionization. It has a split track record.

Rather than downsize through layoffs, Colony Capital LLC, owner of the Hilton and Resorts, has offered voluntary termination packages to cut expenses. When tested, Hilton’s dealers voted against the union in late May.

A few dozen employees have already signed on to the program. Affected employees will receive a week of pay – up to 26 weeks maximum – to match every year of work. Their medical benefits and vacation time were paid through October 31.

Harrah’s acquired the Caesars and Bally’s properties in Atlantic City a few years ago, which dramatically changed the corporate culture. Longtime Caesars gaming employees have complained that many new mandates have resulted in a loss of seniority and benefits.

They now anticipate yet another ownership changeover next year. Harrah’s is selling its assets for $31 billion – $17.1 billion in cash – to two private equity firms. The new owners promise that management will remain intact and no layoffs are expected. Harrah’s four properties in Atlantic City account for 40 per cent of the $5.2 billion industry.

Last March 17, the UAW captured 82 percent of the Caesars dealer vote. However, the union recently lost the cashiers by a 65 per cent against, vs. 35 per cent voting in favor. Slot technicians at Caesars elected on August 23 to form their own union. Caesars’ dealers fear out-of-state competition could pressure casinos to trim labor costs at the expense of their jobs.

During the weeks leading up to Bally’s 80 percent favorable June vote to unionize, the management mandated that all table game employees attend special meetings to discuss the union situation. Staff members received a memo that promised to “make every effort to have times as convenient as possible” to avoid cutting into their free time. The management also purchased newspaper ads, touting their history of employee support.

Many dealers supporting unionization cite a need to combat what they perceive as a negative new staffing trend. According to one Trump Plaza dealer, “It’s become a two-job town.” More part-time workers, without benefits, have replaced full-time personnel. An increasing number of dealers must work part-time at multiple casinos to compensate for their lost income.

Last March, the Trump Plaza dealers voted 324-149 to unionize. A later objection, filed by Trump Plaza’s management with the National Labor Relations Board (NLRB), was dismissed. They have recently appealed the decision.

Robert M. Pickus, chief administrative officer and general counsel for Trump Entertainment Resorts, Inc., says: “We always respect the rights of all of our employees, and are committed to equal treatment and a safe, respectful and dignified work environment, regardless of union affiliation.”

In addition to concerns about these working conditions, two new issues have emerged. The UAW is currently negotiating with Caesars regarding electronic games and potential job loss for dealers. They are already operating in neighboring Pennsylvania and Delaware.

Realizing the necessity of fighting their rivals, the New Jersey Casino Control Commission (CCC) gave preliminary approval in July for live testing of electronic poker. CCC Chair Linda Kassekert has attempted to quell their fears by stating that virtual gaming should have minimal impact on staffing.

Unions are also examining statewide smoking bans in all New Jersey public buildings. However, the law exempted casino gaming floors by requiring them to provide designated smoking areas and offer a ventilation plan. The City Council went further, effective last April 15, allowing smoking on only 25% of the casino floor.

Delaware’s three racinos are smoke-free. However, adjacent Pennsylvania has not enacted any statewide smoking prohibitions as of yet.

Casino Association of New Jersey (CANJ) head Joseph Corbo Jr. said each casino member would determine the logistics of complying with the ordinance while also creating a favorable environment for customers who smoke. Amid health concerns from employees, smoking areas may be separated from other gaming areas and equipped with powerful ventilation systems.

Many employees are outraged that smoking is illegal statewide in New Jersey, but permitted on the gaming floor. As of press time, the UAW had also proposed that no smoking would be allowed where UAW members worked.

The union question is an emotional one for both sides. While there is clear support for organized labor, there is also strong opposition. Some critics of union programs cite several reasons for their resistance. These include:

• It adds a third dimension to the traditionally two-sided relationship. They claim that unions have no personal stake in the results and well being of either side, and may try to claim authority and power via threats of strikes.

• The sensitivity of the casino operation and its regulatory requirements has allowed management the freedom to terminate anyone lacking the right qualities. Critics believe unions will hinder the ability to remove anyone suspected of criminal activity.

• Strict adherence to the CCC’s table games standards may conflict with union employment rules and expectations.

• Unions could be counterproductive to advancement. Opponents claim casino executives are reluctant to promote union members to management or supervisory roles. They also believe that transferring to other properties may be improbable because a non-union casino may refuse to consider a union member.

• Union negotiations costs may create shortages in benefits in other areas of the casinos. So, it may turn out to be a “robbing Peter to pay Paul” scenario.

So, what is the truth? It probably lies somewhere in the middle, but the sides have been drawn. Obviously, one’s perspective almost always depends on the individual’s position within an organization. However, it remains a hot topic and one that will not go away for both casino operators and their employees anytime soon.

Editor’s note: Several casinos were contacted, as was the UAW at their headquarters in Michigan. They chose not to respond. While this story concentrates on Atlantic City, other jurisdictions face many of the same challenges due to multi-site and multi-jurisdictional ownership, plus other economic factors.

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