Another Union Risks Jobs for Pension Plan Bailout

by | Feb 16, 2012 | Labor Relations Ink

Like their union brothers and sisters at Hostess, UNITE HERE Local 54 in Atlantic City is apparently willing to risk their members’ livelihood to force another critically under-funded union pension plan onto the back of a struggling employer. The union is asking groups to cancel conventions booked at the Tropicana Casino and Resort because the casino’s new owners, who bailed out the failing enterprise last year, intend to stop payment into the union’s National Pension Fund.  “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.” The casino declared an impasse in contract talks last month and said it will unilaterally implement its final offer, which includes payments of $1.77 per hour into employee 401Ks or directly in cash and an end to contributions to a union plan thought underfunded by at least $1.4 billion.  According to Tropicana president Tony Rodio the casino’s final offer is otherwise “identical” to agreements reached between the union and six of the seven other Boardwalk casinos it represents.  Rodio also contends continued participation in the union pension fund exposes the casino to “significant future liability”. “This type of response from the Unite-HERE leadership could have a devastating effect on our employees if convention groups go elsewhere,” 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.” Atlantic City’s 11 casinos have all been hammered hard by the recession and growing competition from casinos in neighboring states.  Since 2006, the city’s casinos and resorts have seen their combined revenue shrink by 40% or $1.9 billion and it is widely believed that a labor dispute of any kind is the last thing the struggling local economy needs.

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