Desert Palace, Inc. v. Local Joint Executive Board

486 F. Supp. 675, 105 L.R.R.M. (BNA) 3053, 1980 U.S. Dist. LEXIS 10574
CourtDistrict Court, D. Nevada
DecidedMarch 13, 1980
DocketCIV-LV-79-97 HEC
StatusPublished
Cited by2 cases

This text of 486 F. Supp. 675 (Desert Palace, Inc. v. Local Joint Executive Board) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Desert Palace, Inc. v. Local Joint Executive Board, 486 F. Supp. 675, 105 L.R.R.M. (BNA) 3053, 1980 U.S. Dist. LEXIS 10574 (D. Nev. 1980).

Opinion

DECISION

CLAIBORNE, District Judge.

This is an action per 29 U.S.C. § 185 and 9 U.S.C. § 10 for vacation of an Arbitrator's *677 award, purportedly resolving a labor dispute. The action is before the Court on cross-Motions for Summary Judgment. Because of the nature of this action, and the fact that the material facts herein are not in dispute, the within action is ripe for Decision by reason of the within Motions.

FINDINGS OF FACT

Plaintiff, Desert Palace, Inc., dba Caesars Palace (hereinafter referred to as “Caesars Palace” or “the Hotel”) operates a large showroom called the “Circus Maximus” which features live entertainment by renowned entertainers, and operates-seven (7) nights a week throughout the year, two shows a night, at 9:00 p: m. and 12:30 a. m. 1 The Hotel employees who serve drinks in the showroom are represented by Defendants herein (hereinafter referred to as “the Union”).

Prior to May 18, 1978, members of the public who were not complemented by the Hotel or part of a tour package or convention group would make reservations in advance to see a show with either a Hotel reservations clerk or the maitre d\ The cost of the show to the patron was the same, regardless of seating, and included two or three drinks. At the conclusion of the show, showroom servers would present the patron with a bill which included the charge for the show and whatever drinks the patron may have ordered in excess of the 2-3 drinks which were included in the price of the show. Beyond that the customer was free to leave a gratuity. Additionally, under the system in effect prior to May 18, 1978, no specific seat assignments were made and guests who wanted more desirable seats found it necessary to tip the maitre d’ and/or showroom captain in order to obtain them. As a result, prior to May 18, 1978, the showroom servers earned an average of $78 to $125 per week in gratuities.

In an effort to reduce losses in the showroom portion of its operations, the Hotel decided to implement a new “showroom reservations” system, said system becoming operational on May 18, 1978. Under the new system, the Hotel installed a Tieketron outlet, and customers would select one of two designated areas in which to sit in advance of the actual show, paying a -higher price if they wished to have a better seat. This system, of course, obviated the necessity of leaving a gratuity with the maitre d’ or showroom captain in order to obtain a desired seat. Additionally, after May 18, the price of the admission ticket did not include any food or beverage charges whatsoever; drinks were made available upon request to showroom customers at $1.00 per drink — considerably lower than the $2.00-$3.50 cost of a drink in the Hotel bars and restaurants outside of the showroom — with wine and champagne also being made available.

The Hotel took the position that it was not obligated under the Collective Bargaining Agreement with the Union, effective 3/26/76 through 4/1/80, to pay gratuities to showroom servers within the jurisdiction of the Union from the- revenues generated by the Tieketron sales. As a result, the employees’ gratuity income dropped from $78-125 per week to $4-5 per night. Accordingly, the Union immediately filed two grievances on May 18, 1978, concerning the changes in operation of the showroom. The Union expressed two contentions: first, that the Hotel had violated § 18 of the Agreement, in that sales under the Ticketron system to the general public constituted a “special event,” thereby entitling the showroom servers to 15% of the then-current “minimum” charge under the Ticketron system; and second, in the alternate, that the Hotel had violated § 1.01 of the Agreement, in that the implementation of the Tieketron System had so altered the duties of the showroom servers as to entitle the Union to immediate bargaining concerning increased wage negotiations on those showroom servers’ behalf. The dis *678 pute remained unsettled through the established grievance procedures and thereafter the Union requested that the matter be submitted to arbitration. Pursuant to Article 22 of the Collective Bargaining Agreement, Arbitrator John B. Lauritzen was chosen by lot to hear the dispute, and hearings were held on July 13 and 14 and October 4 and 5, 1978.

By Decision and award dated February 8, 1979 entitled “Re: Change in Ticket Policy for Main Showroom” (hereinafter referred to as “Award”), the Arbitrator found that the Hotel’s institution of the Ticketron system converted every showroom admission into a “special event” within the meaning of § 18.01 of the Agreement, which states:

A special event shall be deemed to be any event for a person, persons, group or groups arranged by a travel agent, booking agent, hotel sales representative, convention agent, promotional representative, operator or any other individual or agency where tickets, coupons or package prices for food and/or beverages to be served to patrons of such events are involved and where regular employees of an establishment covered by this Agreement provide such service.

(emphasis added). That is, the Arbitrator concluded that because beverages were available in the showroom at an additional cost to the patron, and the Hotel required that the showroom servers attempt to sell those drinks to “Ticketron” customers, every ticketed seat in the showroom “involved” the price of beverages and thus became a “special event.” (Award, pp. 48-50). Additionally, and as an alternate basis for his finding, the Arbitrator concluded that, based on the testimony of Jeff McColl, president of the Union at all relevant times, coupled with the fact that protection of tipping potential for all showroom servers was and has always been a key consideration in collective bargaining between the parties, that the phrase “ . . . food and/or beverages to be served to patrons of such events are involved” was not intended by the parties to modify the phrase “coupons, or package prices.” (Award, pp. 51-56).

By means of remedy, the Arbitrator determined that the proper procedure to compensate showroom servers for lost earnings was for the Hotel to pay such servers 15% of the price of each ticket sold for admission into the showroom for each show since May 18, 1978. (Award, p. 57). He based this remedy on § 18.03(a) of the Agreement, which provides:

Cocktail servers serving guests included in a special event at the second show in the main showroom shall be guaranteed a minimum gratuity per person served of fifteen percent (15%) of the then current minimum charge to general public for the second show.

(emphasis added). That is, the Arbitrator determined that under the new Ticketron system, each price range involved constituted a “then current minimum charge”, and he based his award accordingly. This resulted in the Hotel having to pay the showroom servers approximately $725/week/ser-ver between May 18, 1978 and March, 1979. The Hotel initially took the position that it would not pay the award, absent a clarification by the Arbitrator.

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486 F. Supp. 675, 105 L.R.R.M. (BNA) 3053, 1980 U.S. Dist. LEXIS 10574, Counsel Stack Legal Research, https://law.counselstack.com/opinion/desert-palace-inc-v-local-joint-executive-board-nvd-1980.