Change May be Coming to the National Labor Relations Board
Billionaire Phil Ruffin has been quoted as saying, “I like to negotiate.” President-elect Trump reminds us often of what a great negotiator he is.
Except not right now, and not with the Culinary Workers Union, Local 226.
Last December, more than half the 500 eligible workers at the Trump International Hotel Las Vegas voted to join the Union. However, Ruffin and his 50 percent partner, President-elect Donald Trump, allegedly refused to recognize, or bargain with, the Union which dominates employment on the Las Vegas Strip with an estimated 57,000 members.
The Union took its case to the National Labor Relations Board (“NLRB”), and on November 3rd, the NLRB granted the Culinary’s Motion for Summary Judgment, stating “The Respondent admits its refusal to bargain,” “The Respondent does not offer to adduce at a hearing any newly discovered and previously unavailable evidence,” and nor has the “Respondent raised any representation issue that is properly litigable in this unfair labor practice proceeding.”
Local Union brass figure Ruffin and Trump should fold right now. “Mr. Trump is breaking federal law and Trump Hotel Las Vegas is operating illegally,” claims Union Secretary-Treasurer Geoconda Arguello-Kline. “Mr. Trump should accept the federal government’s order to negotiate and treat his workers with respect.”
However, Trump Ruffin Commercial LLC is in no hurry to knuckle under to the Union’s and the federal government’s demands and instead has appealed the NLRB’s decision to the US Court of Appeals for the District of Columbia Circuit in Washington DC. According to the Wall Street Journal, “Experts say the court could take more than six months to issue a ruling.”
Ironically, the Trump Ruffin property sits on a portion of what was once the Frontier Hotel and Gambling Hall, a hotel Ruffin purchased in 1998 after agreeing to sign the Union’s contract, after Margaret Elardi had defended a six-and-half-year strike by the Culinary.
“When I bought the (newly renamed) New Frontier, they had the longest strike in US history,” Ruffin recalls. “Everybody tried to solve the problem [but nobody could]. I wasn’t going to buy the Frontier with strikers in front; it hurt the business.”
Ruffin told HauteLiving.com he tracked down Union president John Wilhelm and set up a meeting where “I told him, ‘I want to buy the Frontier, but I can’t have picketers out front.’ Within two-and-a-half hours, we solved the problem, got rid of the strikers and opened the Frontier. Everybody else took credit for it, but it was really John and I that did the deal.”
After buying the Frontier for $167 million in 1998, he sold the front 36 acres of the property for $1.24 billion in 2007, a transaction that set a record for being the highest per-acre priced deal in the Strip’s history. The Ruffin Trump Hotel was then built on the back seven acres of the property, where it currently sits.
Ruffin then purchased the Treasure Island Hotel and Casino down the Strip, mostly for cash, in 2009 for $775 million, and inherited that property’s Culinary contract. While Mr. Ruffin doesn’t appear to have an ideological issue with unions, Labor Department disclosure forms indicate Trump Ruffin spent over $560,000 to fight the Union’s organizing efforts at the Las Vegas Trump Hotel. Nevertheless, the Culinary prevailed by a razor-thin margin of 238 to 209. The Company argued that the Union illegally influenced the vote, but it fell on the NLRB’s deaf ears.
This summer Trump Ruffin decided to pay $11,200 to settle allegations of “union-busting.” Food server Alma Zamarin said, “I finally have justice,” after receiving $1,500 as part of the settlement. “I’m not done fighting to make my workplace better ― I will keep going until Donald Trump and his son, Eric Trump, sit down and negotiates a good contract with their employees.”
Ruffin’s preternatural timing has been impeccable in the past, so it may be this time as well. While the NLRB is purportedly an independent agency that does not report to the president, Mr. Trump will have the ability to influence the agency by appointing Board members, its general counsel, and other important positions when they open up.
At the time of this writing, the NLRB is comprised of a 2-1 democratic majority, but also has two vacant seats that will likely be filled by President Trump in an effort to achieve a majority along political lines, thereby transforming the currently pro-labor Board into a more employer-friendly agency.
The impending expiration of labor ally and Board Chairman, Mark Gaston Pearce in 2018 will further permit President-elect Trump to level the current playing field. The addition of Trump appointees will undoubtedly result in a more business-oriented NLRB that will likely revisit recent anti-business NLRB rules and decisions.
Once the power shifts, Obama-era Board decisions may be undone, including those covering (1) joint employment, (2) class action waivers, (3) inclusion of temporary workers in bargaining units, (4) duty to bargain, (5) quickie elections, (6) identification of statutory supervisors, (7) expansion of protected concerted activity via its impact on workplace policies, (8) delineation of bargaining units, and (9) status as employees of college/university students and student athletes.
Additionally, other onerous changes currently being contemplated by the existing Board, may not get made with a newly configured NLRB. For example, extending Weingarten rights to non-union employees, making misclassification of employees as independent contractors a separate violation of the National Labor Relations Act, and the currently enjoined Labor-Management Reporting and Disclosure Act (LMRDA) “persuader” regulations may be revisited.
Then there are the other important NLRB positions that the newly elected president may influence, such as the influential general counsel position currently held by Richard Griffin, former counsel to the Operating Engineers Union, and that of his Deputy General Counsel, Jennifer Abruzzo, to say nothing of the open Supreme Court seat. And that’s just on the national level.
The NLRB oversees 26 regional offices, including Regions 28 and 32 that respectfully cover Northern and Southern Nevada. Each region has its own regional directors, regional attorneys, and resident officers that all may be subject to change under the new administration together with the Board’s Administrative Law judges. All in all, expect real change in the traditional labor arena after January 2017.
Culinary Union attorney Richard McCracken told the WSJ, “Very rarely have any of my clients been in direct conflict with the president.” Putting on a happy face, he says, “I’m expecting everyone to obey the law.” I suppose that is all anyone can expect, but there are several positions now subject to regime change that are charged with interpreting what the law requires and how it is administered.
Meanwhile, UNITE HERE president D. Taylor did not look or sound happy when interviewed by a local TV station on election night. The Union boss was in Las Vegas for a Democratic victory party at the Aria, that wasn’t to be. During Taylor’s tenure in Las Vegas, the Culinary Workers Union, grew from 18,000 members in 1987 to over 55,000 in 2013. This year the Culinary helped elect a Latina (Catherine Cortez-Maesto) and a Latino (Ruben Kihuen) to represent Nevada in the Senate and House, respectively. However, Taylor knows Trump’s victory will put the Culinary’s stranglehold on the Strip in jeopardy.
Even if the DC Circuit Court finds for the Union, Trump Ruffin could ask the US Supreme Court to weigh in, forcing Trump loyalist and Attorney General selection Jeff Sessions to represent the NLRB in the matter, with the Court likely holding a 5-4 conservative slant by then.
How Trump feels about unions may be reflected by members of his inaugural committee which starts with Committee Chairman Thomas Barrack, whose company Colony Capital once owned a large portion of non-union Stations Casinos. Las Vegas Sands Chairman Sheldon Adelson and his wife Miriam are part of the committee, owners of the Venetian and Palazzo, the Strip’s only large non-union properties. Mr. Ruffin is also on the committee, as is casino magnate Steve Wynn, whose properties have historically been Culinary properties, but has fought a dealers union over tip-pooling.
As it is now, the NLRB is horribly tilted in organized labor’s favor with Obama selection General Counsel Richard Griffin, and a committee made up of two democrats and one republican, who voted with the democrats on the Trump Ruffin decision. If President Trump really wants the economy to rebound, he must make sure management he has a voice at the NLRB table so the unions don’t stand in the way of making America great again.
Douglas French is former president of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply, and author of Walk Away: The Rise and Fall of the Home-Ownership Myth. He received his master's degree in economics from UNLV, studying under both Professor Murray Rothbard and Professor Hans-Hermann Hoppe.