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Caesars, Culinary reach contract agreement ahead of strike deadline; MGM could be next

The tentative deal averts a walkout by 10,000 Caesars employees. MGM Resorts’ CEO said he believed a deal was imminent.
Howard Stutz
Howard Stutz
Jacob Solis
Jacob Solis

Caesars Entertainment and Culinary Workers Union Local 226 reached a tentative five-year agreement early Wednesday morning after nearly 20 straight hours of negotiations and days away from a threatened strike against the company’s major Strip resorts.

And if all goes to plan, a tentative agreement with MGM Resorts International could soon be finalized.

The Culinary has been in contract negotiations with Caesars, MGM and Wynn Resorts, the three largest employers on the Strip with 18 properties that cover 38,000 non-gaming union workers, since April. The agreements expired at the end of May and were extended until September when the union called for a strike authorization vote, which was overwhelmingly approved.

A strike is planned for 5 a.m. Friday, but it was seemingly averted via a tentative agreement announced in a post on X, formerly known as Twitter, at 5:43 a.m. covering nine Caesars properties covering roughly 10,000 non-gaming workers at the Caesars Forum Convention Center, Caesars Palace, Flamingo Las Vegas, Harrah’s Las Vegas, Horseshoe Las Vegas, Paris Las Vegas, Planet Hollywood, The Cromwell and The Linq.

In a virtual press conference Wednesday afternoon, Culinary Secretary-Treasurer Ted Pappageorge repeatedly characterized the tentative contract with Caesars as “historic.” 

Specifics remained scant ahead of a full vote by union members expected within the next 10 days and ongoing negotiations this week with other properties. But Pappageorge said the agreement included substantial wage increases in each of the five contract years, new technology and artificial intelligence protections and the reinstatement of daily room cleaning. 

“As a package, we think this is the best contract we've ever had,” he said. 

Of the issues that stalled negotiations between casinos and the union, none was thornier than the disagreement over daily room cleaning, Pappageorge said. That was in large part because Culinary-backed Democratic lawmakers and Republican Gov. Joe Lombardo earlier this year approved the repeal of a pandemic-era law that mandated daily room cleanings.

Also critical to the deal were limitations on the implementation of robotics and artificial intelligence at Caesars properties — something Pappageorge described as union members’ “number one issue” — including notifying and bargaining with the union over new technology that could reduce or eliminate jobs six months in advance, as well as mandatory training requirements for newly introduced technology. 

Hours later, during MGM Resorts’ third-quarter earnings conference call, CEO Bill Hornbuckle said the company and the union were “literally in session as we speak” and was optimistic an agreement would be imminently reached.

"We know from listening to our employees that they are looking for a pay increase to combat inflation,” Hornbuckle said. “This deal, when announced, will do just that and will result in the largest pay increase in the history of our negotiations with the Culinary Union."

A deal with MGM would cover employees at Aria, Bellagio, Excalibur, Luxor, Mandalay Bay, MGM Grand, New York-New York and Park MGM.

Ted Pappageorge, Secretary-Treasurer for Culinary Union, during a Culinary and Bartenders Unions strike vote while gathering at Thomas and Mack Arena on Tuesday Sept. 26, 2023. (Jeff Scheid/The Nevada Independent)

Asked Wednesday about Hornbuckle’s confidence a deal would be done ahead of the strike deadline, Pappageorge said “If that’s the case, his representatives are here and I hope they’re listening.” 

In addition to the negotiations with MGM on Wednesday, Culinary is expected to meet with officials from Wynn Resorts on Thursday ahead of the union-imposed strike deadline in the hope of averting a walkout by workers at Wynn Las Vegas and Encore. 

In a research note to investors following the Caesars announcement, Deutsche Bank gaming analyst Carlo Santarelli said he expects MGM and Wynn agreements will “follow in relatively short order.”

It’s unclear when union employees will formally vote on the agreement, which comes ahead of this weekend’s Veterans Day holiday and the Nov. 16-18 Formula One Las Vegas Grand Prix.

In a statement Wednesday morning, Caesars said its employees would see “meaningful wage increases that align with our past performance, along with continued opportunities for growth tied to our future plans to bring more union jobs to the Las Vegas Strip.”

During Caesars' third-quarter earnings conference call last week, CEO Tom Reeg said the casino operator’s employees “should and will” participate in the company’s financial success.

“You should expect that when we reach an agreement on a contract, it's going to be the largest increase that our employees have seen in the four decades since we started interacting with the Culinary Union,” he said.

Updated at 4:25 p.m. on 11/18/2023 to include comments from the union and MGM Resorts.

Updated at 12:06 p.m. on 11/8/2023 to add a statement from Caesars Entertainment.

Updated at 7:47 a.m. on 11/8/2023 to add background and an analyst comment.


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