Riverboat Casino pours water on the drowning
Expanded from the 12-2-98 Daily Sparks (Nev.) Tribune
Updated 3-26-2007

RENO - The Daily Sparks Tribune yesterday broke the story about how one of the richest gambling families in northern Nevada is trying to beat 375 laid off workers out of any severance pay.

The Riverboat Hotel-Casino in downtown Reno fired all its workers without notice at 9:00 a.m. on Monday, Nov. 30. The hotel also rousted its guests and unceremoniously sent them packing to the Riverboat's sister hotel, the Comstock, a block away. The Douglass family owns interests in both properties as well as the huge Club Cal-Neva across from Harrah's-Reno Hotel-Casino.

Nobody but the muckrakers at the Tribune and a union member from Sparks thought to question the legality of the casino's actions.

When journalist Willie Albright (who also contributes reports to National Public Radio and National Native News), asked about compliance with the federal Worker Adjustment and Retraining Notification (WARN) Act, the company tried to crawl through a narrow legal loophole by using the Nov. 3 passage of California's Proposition 5 as an excuse. The far-off threat of California Native American gambling is now in vogue for the Nevada casino industry as a catch-all excuse to deflect blame and avoid responsibility.

TWO PAPERS, TWO STORIES FROM MANAGEMENT. "Lori Keller, vice-president of marketing for the Riverboat, said that the casino has been operating in the red for a few years and that negotiations with two potential purchasers were terminated the day after Prop. 5 passed and efforts to secure a joint-venture partner failed," the Tribune reported.

However, the Reno Gazette-Journal in its Tuesday, 12-1-98, front page story, noted that the Riverboat had been profitable until this year.

The owners "attempted to revive the decade-old Riverboat with a $2 million remodel and a new management team," the Reno paper reported.

"But when the hotel-casino could not recapture the slim profits it eked out until 1998, the owners decided to sell," the Gazette-Journal noted.

"According to Keller, employees were not given notice of the closure on the advice of Riverboat attorneys who said the WARN Act does not apply because the casino was in a distressed situation. The 60-day notice requirement could have been met with two months severance pay, but Keller said employee severance packages consisted only of vacation pay and pay for those scheduled to work Monday," Albright wrote.

LABOR LAWYER DISAGREES. The Tribune contacted veteran Reno labor lawyer Michael Langton (775-329-7557). Among others, Langton represents the Building and Construction Trades Council of Northern Nevada/AFL-CIO, Teamsters Local 533, Laborers' Union Local 169 and the Nevada Classified School Employees Association. Langton himself is a longtime member of International Brotherhood of Electrical Workers Local 357 based in Las Vegas.

"According to Langton, Riverboat officials had enough forewarning of the passage of Prop. 5 to have given their employees notice as required under the WARN Act," the Tribune reported.

"Langton said the distressed-situation argument does not apply because owners knew for months that Prop. 5 was likely to pass. The WARN Act requires 60 days notice, but does not require management to follow through with layoffs. Langton said a prudent employer would have given the employees notice of the pending sale.

"Barring that, he said, the employees should have been given the severance pay. The situation opens up the possibility of a lawsuit, Langton said...Keller added the Riverboat did not feel compelled to give severance pay in lieu of notice," Albright wrote.

CROCODILE TEARS DEPT. "Our greatest concern is for our employees," said Riverboat co-owner Bill Douglass in a press release.

"We have discussed the situation with several area casinos and are grateful to the Reno gaming community for its support at this difficult moment," the press release stated.

I wonder if the gentleman gambler has ever heard the adage "put your money where your mouth is."

DINOSAUR DOMINOES. Alone among local media, this column has predicted downtown closings for the past several weeks. (See the 11-22-98 and 11-29-98 Barbwires.) Alas, the Riverboat is but the latest to fall in a continuing line of dinosaurs playing dominoes.

"John Douglass, CEO of the Comstock Hotel-Casino and brother of Bill Douglass, said the Comstock is not going to close its doors anytime soon," according to the Tribune.

For the sake of the Comstock workers, let's hope he's right. If the worst happens, I hope he treats his employees better than did his brother.

ROLLING OVER AND PLAYING DEAD. "I spoke to a member of the 'Rapid Response' team from the Nevada Employment Security (Dept.)," read an e-mail from a Sparks union man.

"I saw him at the job fair at the Old Town Mall. He stated that there was a loophole in the CFR (Code of Federal Regulations) that allows 'distressed' businesses to withold notification. Apparently, the only way employees WILL get notice is if the employers say, in effect, that we've made so God damn much money that we have to close the business to have the time to watch our stash. Sheesh."

DOWNSIZE THIS! I think that the 375 displaced workers should get together and form an ad hoc union — by filing that lawsuit lawyer Langton mentioned to the Tribune.

The employees of the recently closed Holiday Hotel were treated far differently. Despite hard times, the Holiday did not lay off workers last winter and this year gave its employees enough notice before closure.

The Holiday "shut down just before Halloween, a month earlier than originally planned because revenues were slipping too quickly. The 175 displaced workers were paid through last week," Reno Gazette-Journal reporter Ken Alltucker wrote on Dec. 1.

When former Nevada Lt. Gov. Bob Cashell (R) closed the downtown Reno Horseshoe Casino, he likewise followed the law and gave his employees 60 days notice.

Old Reno and her casinos used to take care of people during hard times. The new Reno is as heartless as a brass statue.

Say a little prayer for the displaced workers. May they go forward and kick some serious ass in court.

Be well. Raise hell.

WARN ACT language excerpted from a United States Dept. of Labor bulletin
The exceptions to 60-day notice are:

(1) Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings; (Emphasis added.)
(2) unforeseeable business circumstances. This exception applies to closings and layoffs that are caused by business circumstances that were not reasonably foreseeable at the time notice would otherwise have been required; (Emphasis added.)
The WARN Act is Public Law 100-379 (29 U.S.C. 210l, et seq.) The Department of Labor published final regulations on April 20, 1989, in the Federal Register (Vol. 54, No. 75). The regulations appear at 20 CFR Part639.

Déjà vu all over again...and yet again — BARBWIRE, March 25, 2007

Copyright © 1998, 2007 Andrew Barbano

Andrew Barbano, a member of CWA Local 9413, is a 30-year Nevadan and editor of NevadaLabor.com He was gubernatorial campaign manager for State Senator Joe Neal.
Barbwire by Barbano has originated in the Sparks Tribune since 1988.

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