Las Vegas Union Gambles With Lawsuit for Fast Virus Protections

July 20, 2020, 1:30 PM

A union’s lawsuit for better Covid-19 protections at Las Vegas resorts will test whether organized labor can keep pace with the fast-moving virus by fighting employers in court and arbitration at the same time.

The Culinary Workers Union Local 226 alleges that three resort locations—suites at the MGM Grand, a cafe at the Bellagio, and a restaurant operated by celebrity chef Guy Fieri at a Caesars property—failed to protect their workers from the coronavirus. When the locations reopened in June, management didn’t require guests to wear masks, tell employees about positive Covid-19 tests in the workplace, or try to keep customers a safe distance from workers during shifts, the union alleged.

The union challenged the resorts’ safety procedures through the grievance procedures set forth in the collective bargaining agreements they have with the companies. It also filed a lawsuit seeking immediate improvements to worker protections, via a court injunction, while the monthslong grievance arbitrations proceed.

The case demonstrates how organized labor is turning to creative legal methods in the face of an unprecedented threat to worker health. Although the Culinary Union faces long odds to win an injunction in court, an unlikely victory could provide a road map for other unions seeking to swiftly force employers to adopt more stringent virus safeguards.

The MGM Grand and the Bellagio argued in court filings that the lawsuit is a “bad faith attempt to circumvent arbitration.” The companies, which are both owned by MGM Resorts International, asked the court to throw out the suit and sanction the union by forcing it to pay their legal fees. Caesars Entertainment Corp. declined to comment.

Meanwhile, similar unions are using their collective bargaining agreements to enforce worker protections in new ways. In Maryland, Unite Here Local 25 used its contract as leverage to negotiate new safety requirements at the MGM National Harbor, a sprawling casino and resort complex south of Washington that draws clients from the nation’s capital area. Citing umbrella health and safety language, the union negotiated a more stringent set of health and safety policies than appeared in its original contact, including mandatory masks for workers and guests as well as temperature checks at the door.

Local 25 plans to repeat that strategy as other hotels in the area reopen, said Benjy Cannon, the research and communications director. Although Maryland already has a mask mandate, approaching the issue through contract language could solve complaints quicker than waiting for stretched-thin local authorities to intervene.

“We’re going to see more novel tactics in how unions organize and deal with this thing because we’re all in uncharted waters,” Cannon said.

A Legal Gamble

In Las Vegas, the Culinary Union sued under section 301 of the Labor Management Relations Act. Unions and employers typically use that section to compel the arbitration of a labor dispute or to put into effect a prior arbitration decision, said Michael Green, a law professor and director of Texas A&M University’s Workplace Law Program.

“It’s standard to use section 301 to enforce the terms of a collective bargaining agreement,” Green said. “It’s unusual to see it used in an emergency manner to seek an injunction.”

The Culinary Union asked for what’s known in labor law circles as a “reverse Boys Markets injunction,” named after a 1970 U.S. Supreme Court decision that provided employers a narrow exception to the Norris-LaGuardia Act’s bar against injunctions in labor disputes. Such injunctions—seldom asked for and granted even more rarely—typically stop an employer from doing something rather than forcing them to take a specific action, legal scholars said.

The high court paved the way for those injunctions in Boys Markets v. Retail Clerks Unions by permitting federal courts to block worker strikes over disputes that could go to arbitration and would also violate an agreement’s no-strike clause. Six years later, the court rejected an employer’s request to block a strike that concerned a dispute that wasn’t subject to the union contract’s arbitration procedures.

The Supreme Court justified ordering injunctions in labor disputes when they’re necessary to preserve the integrity of the arbitration process, said Martin Malin, a law professor and co-director of the Institute for Law and the Workplace at Chicago-Kent College of Law. Unions have used the rationale to seek reverse Boys Markets injunctions, he said.

A prototypical injunction of this type blocks the relocation or closure of a facility while the union and employer arbitrate, legal scholars said. For example, a Maryland federal court in 2017 stopped Airgas Inc. from relocating operations and reducing staff at a facility pending an arbitration over whether that plan violated the CBA.

‘A Hollow Formality’

The Culinary Union said in its June 29 lawsuit that—without an injunction against the companies—any arbitration over safety protocols “will be a hollow formality because an arbitrator will not be able to remedy workers’ exposure to COVID-19 or workers contracting the disease and spreading it to their families and communities.”

The rules and procedures for dealing with the coronavirus violate the collective bargaining agreements’ promise to take reasonable measures to keep workers safe, the union said.

In addition, the resorts’ inadequate safety protocols violate the Nevada statute against public nuisances, the union alleged. McDonald’s workers in separate lawsuits backed by the Fight for $15 campaign have won early court orders for better Covid-19 safeguards at restaurants in Chicago and Oakland, Calif., by arguing the working conditions were public nuisances.

The Culinary Union asked for two types of court orders: one to block the resorts from following the inadequate safety rules and procedures, and another for either a temporary or permanent injunction requiring them to fix the unsafe conditions created by those protocols.

But the union’s request for an order imposing safety measures goes beyond what’s allowable in a reverse Boys Markets injunction, the MGM and Bellagio said in a court filing. Unions can only seek an order to preserve the status quo so that arbitration isn’t “rendered meaningless.” Yet the Culinary Union wants to “bypass the arbitrator entirely” in favor of a court ruling, the resorts said.

Union Loss in Previous Bid

A federal court in New York rejected a nurses union’s request for a similar coronavirus-related order imposing safety measures at a hospital in the Bronx, on the grounds that it asked for more than maintaining the status quo.

Relying on a 1991 ruling by the U.S. Court of Appeals for the Second Circuit, the court said granting the New York State Nurses Association’s request would damage the integrity of the pending arbitration and interfere with the hospital’s autonomy. The fact that the nurses are likely to contract Covid-19 didn’t make an injunction proper, the court said.

The nurses union said Montefiore Medical Center committed to making several improvements to nurse safety after it filed the lawsuit. The hospital, on the other hand, called the lawsuit a “distraction” from its “efforts to save lives.”

Regarding the Culinary Union’s injunction request, MGM Resorts said it was unaware of the union’s concerns about its virus-related safety rules until learning about the lawsuit through a press release. The company is focused on its workers’ health and remains ready to discuss safety protocols “directly with union leaders,” it said in a statement.

When asked about its pending lawsuit against the Las Vegas resorts, Culinary Union spokeswoman Bethany Khan referred Bloomberg Law to a union official’s press statement saying that the lawsuit is just a start. The union will continue gathering evidence about unsafe working conditions at resorts all over Las Vegas, the official said.

Twenty-two Culinary Union members or their dependents have died from Covid-19 since the start of March, Khan said.

To contact the reporters on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com; Ian Kullgren in Washington at ikullgren@bloombergindustry.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Karl Hardy at khardy@bloomberglaw.com

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