Last October, workers at a New York racino were overjoyed to discover that their labor union had scored them some big pay raises (read the full story). Almost immediately, the salaries of many buffet cooks, kitchen staff, cleaning staff, and customer relations workers at Resorts World in Queens nearly doubled. In all, over 1,300 employees benefited from the union-negotiated wage increase. Now, less than three months later, the joyous tide at Resorts World has taken a turn for the worse: 175 of the buffet workers who received generous raises last fall have been laid off.
The layoffs were prompted by the abrupt closure of the racino's Aqueduct Buffet in early January. President Ed Farrell said the restaurant shut its doors because it “never caught on with our customers” and was losing money. At least one angry buffet worker expressed doubt about this, saying that the buffet was “definitely making money.” The same worker conceded that, because of the pay raises last fall, Aqueduct Buffet prices had skyrocketed to up to $38 per person.
No Connection Between Raises and Layoffs
The assumption that the layoffs were a direct a result of the pay increase last fall has been made by many. The initial decision to offer the raise, after all, was not made by casino administrators. Rather, it was made as part of an arbitration process between the casino and the Hotel Trades Council. Casino spokesperson Kerri Lyon has said, however, that no relationship exists between the layoffs and the mandatory raises. Lyon explained that the Aqueduct Buffet had operated at a loss since its grand opening in 2011 and that, if it continued to operate, it would have had a “negative impact” on the facility as a whole.
Months ago, when the negotiated raise went into effect, Lyon told the press that her company respected the arbitrator's decision and would “continue to focus our efforts on improving our facility.” In the eyes of casino administrators, the Aqueduct Buffet closure and layoffs will improve business overall.
Severance Packages and the Possibility of Re-Hire
Severance packages for the laid off employees include one to five weeks of pay and four months of continued health insurance coverage, as well as job training and/or job placement assistance. Priority is to be given to the laid off employees if positions elsewhere in the facility become available, according to union representative John Turchiano. Turchiano said that the Hotel Trades Council is doing everything it can to help the ousted workers. At this point, the casino still employs about 1,500 people in other areas. No other pay reductions or layoffs have been reported.
Other Dining Options
Resorts World continues to run a food court with other dining options for patrons. Choices include Southern-fried chicken at Popeye's, Chinese cuisine at Genting Palace, and steak dinners at RW Prime. Drinks and snacks can also be purchased at the facility's Starbucks and Bar360. No plans have been revealed for the space once occupied by the Aqueduct Buffet. State Senator Joe Addabbo told the press he hopes the space will not be used for gambling. Instead, he would like to see new dining options offered there.
Layoffs in Atlantic City
New York is not the only state to see layoffs in its casino industry. Last September, 315 positions were eliminated from three different Atlantic City casinos. Trump Entertainment Resorts cut 200 workers and Revel cut 115 people. The eliminations were blamed on the cyclical end-of-summer slowdown. The company has had problems for a while now; earlier this year, Revel filed for Chapter 11 protection. Last December, rumors surfaced that Hard Rock International was looking to purchase the struggling company.
Hourly workers weren't the only ones to be cut at Revel. Last July, 75 senior management positions were eliminated at the casino. Four months prior to that, 83 employees were cut. Only time will tell what happens to this struggling business in 2014.
Layoffs in West Virginia
Last October, the Hollywood Casino in Charleston laid off several dealers. The exact number was not disclosed, but it was reported to be less than 50. Contrary to popular belief, the layoffs were not due to the struggling U.S. economy. Rather, they were due to Hollywood Casino's stiff competition with neighboring Maryland and its Maryland Live! facility. West Virginia Lottery director John Musgrave said he anticipates competition from neighboring states will continue for the next several years. Specifically, he expects the rivalry to continue between Ohio, West Virginia and Maryland casinos.
Alabama: Laid Off Casino Workers May Have Legal Case
Back in 2010, a greyhound racetrack in Alabama called VictoryLand put workers through three rounds of abrupt layoffs. The first round eliminated 68 people and was thought to be temporary. The second and third rounds, however, saw every single employee at the track out of a job. These elimination were the result of a gambling crackdown in Alabama, where the activity is illegal.
VictoryLand had been attempting to get around state laws by loosely interpreting them. Because some forms of bingo are legal in the state, the casino sported slot machines that closely resembled the game of bingo. State officials caught on, however, and the Alabama Supreme Court ruled in favor of the automatic shut-down of the facility.
Under the Worker Adjustment and Retraining Act, or WARN, employers are required to give a 60-day notice before mass layoffs occur. The former employees sued VictoryLand for violating the WARN Act and won in district court. VictoryLand appealed the ruling, but it is likely that they will have to pay off at least some of the employees who did not receive a 60-day notice. The employees who ultimately receive compensation will get 60 days' wages. These reparations could add up to anywhere between $3 and $5 million for VictoryLand, according to sources.
Any time a business lays off employees in mass, people get hurt and citizens become angry. Today's struggling economy, paired with the fact that more casinos are springing up in the states, sets the stage for additional layoffs in the future. Even with union protection and arbitration, it seems that some casino employees remain vulnerable to this unfortunate circumstance.