‘Right to return’ law far from a guarantee workers will get their jobs back

Union workers laid off during the pandemic traveled to Carson City in May to urge lawmakers to pass “right-to-return” legislation. (Photo: Michael Lyle)

The struggles of laid-off workers in the tourism industry aren’t ending as swiftly as they began.  

“Right to Return,” the high-profile legislation that the Culinary union spearheaded and some casinos fought, which will give some laid-off workers priority when hiring for their old jobs, is set to go into effect July 1.

How the law will work in practice is still not entirely predictable, because a few provisions will depend on employers’ interpretation. Beyond what’s in the law, some wonder whether external circumstances, such as casinos’ continued efforts to reduce labor costs, might make returning to the same job still a distant dream for many.

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The law gives certain laid-off workers the right to be offered back their former or similar jobs, as those positions become available. To qualify, workers must have been laid off, terminated, or furloughed because of the pandemic, and have worked for at least 6 months in the year before March 12, 2020. The law applies to workers in travel-related industries, namely employees in casinos, hospitality, stadiums, and airports.

California passed a similar law in April, and several cities nationally have passed similar ordinances during covid.

Right to Return will primarily affect nonunion workers, by putting recall rights typically found in union contracts into law. During the pandemic, most unions successfully extended the recall period in their members’ contracts, so union employers are already required to reach out to former employees when rehiring.  The law affords nonunion workers the same basic rights. It will be in effect until August 31, 2022.

The Right to Return law provides two enforcement mechanisms: aggrieved employees can file a complaint through the state Labor Commissioner’s office, or file a civil action. The law requires the employee to provide their employer with written notice of the alleged violation and explanation, and give them 20 days to resolve it, before officially filing a complaint with the Labor Commissioner or filing a civil action.  

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Before anyone can enforce the law, they need to understand what it requires. Not everything is spelled out, some say.

One question is how the employee will be treated upon recall: as a brand new employee, or one who never left?

Jen Sarafina, a partner at Kamer Zucker Abbott, a law firm which represents employers, said that one way that question might arise is with regard to employee benefits. SB 386 “doesn’t specifically discuss whether employees have to be returned with the same seniority and benefits that they probably had previously had,” she said.

Seniority does matter during the recall process because it dictates the order in which workers of the same job classification are brought back. But once they’re hired, it’s not obvious the law requires recalled employees to receive all of the same perks they’d earned with their seniority pre-pandemic.

Sarafina also said there might be ambiguity about when recalled workers can reenroll in healthcare benefits because unlike a collective bargaining agreement, this legislation doesn’t explicitly refer to healthcare. It’s hard to know, she said, whether somebody being recalled based on this statute “has the right to be automatically put back on health insurance,” and whether the health plan would allow for automatic reenrollment. There’s often a waiting period to enroll in insurance plans, set between 0 and 90 days.

Bethany Khan, Culinary spokeswoman, said that the state can’t legislate those details, but Culinary contracts include those protections.

“The largest casino companies in Nevada have been going through this process for a year, major resorts have already agreed to 2-year recall language, and they are bringing workers back at the same level of seniority, pay, and benefits,” she said. “It would be a shame if the non-union companies don’t follow the standard set by the largest gaming employers in Nevada.”

The Labor Commissioner’s office declined to comment on how it interprets and might enforce those provisions.

Casinos whose employees are not represented by a union contract argue that ambiguity in the law makes it more likely employers will misinterpret the provisions, and face costly penalties.

South Point casino’s attorney, Barry Lieberman, called the bill “a confusing patchwork of vague, burdensome and non-helpful requirements that force employers covered by the bill to guess, at their peril, as to what the bill actually requires.”

In a statement, a Red Rock Resorts spokesperson said, the bill “burdens employers with additional and redundant recordkeeping” and “exposes employers to costly litigation when they hire employees.” “It was implemented at the worst possible time, a period when employers can’t get workers back to return to work,” the spokesperson said. Red Rock and its Station Casinos properties have been in a long-running battle with the Culinary over union representation of employees and collective bargaining rights.

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Whether the law will succeed in its basic goal, to get a significant number of workers their jobs back, depends on circumstances outside of its purview, too.

For one, success depends on the level of staffing at casinos. If businesses plan to operate at significantly reduced levels of labor, some workers might not be called back for at least several months.

Kurt Petersen, co-president of UNITE HERE Local 11, which includes southern California, helped push for a version of the bill in California, which passed in April. As he put it in an interview, there are two ways employers might use the pandemic to change the workforce: by transforming the makeup of the workforce from more secure, veteran workers to newer, lower-salaried workers, and by reducing the overall number of workers. “Recall does a lot to hamper that goal to start over with a new workforce. But the staffing is a huge problem,” Petersen said.

At union casinos that already operate with a contract including recall rights, some workers say it hasn’t been a cure-all.

Alison Singer, a former cocktail waitress and bartender of nearly 35 years at Treasure Island, a union property, has not yet been called back. She isn’t confident she will be called anytime soon, in part because of understaffing.

Singer thinks that the casino is trying to operate “with more of a skeleton crew,” which she believes will endure as a cost-saving measure. The bartenders who are back, she says, are all on-call and overworked. The casino also installed automated bartending machines while it was shut down, reducing the need for labor, she said. (Treasure Island didn’t respond to a request for comment.)

Singer doesn’t know what she’ll do when extended unemployment and COBRA federal healthcare subsidies expire, both in September. She doesn’t think all workers will be called back by then. Applying for new jobs in the industry, which she’s dedicated her career to, has proved difficult because she is 58. “They just look at the age and figure you can’t do it. But we can’t retire yet either.”

Derek Greenlee, a bartender at Park MGM was grateful to be called back, but also experienced understaffing. He was brought back on-call and part-time, constantly placed at different bars in the casino.

“I have literally worked in restaurants where I’ve looked the customer right in the eye and said, ‘I apologize. Sir, I don’t know the menu in here. I haven’t worked in here in years and I’m only in here for today,’” Greenlee said.

He is going back to full-time on July 5, but is still concerned, as he said that Park MGM is bringing back 47 full-time bartenders, but there used to be over 60.

“It wasn’t like the state lifted restrictions and reopened everything and everything snapped back into place,” Greenlee said. He will be struggling with the effects of the pandemic for years, which took a financial and psychological toll. He’s happy to be back but finds it difficult to be told by union reps and casino management how lucky he is: “None of this was my fault and I feel like we paid dearly for it,” Greenlee said.  

In a statement, an MGM Resorts spokesperson said MGM “has rehired and hired employees at an unprecedented pace over the past few months. As Nevada’s largest employer, we are committed to furthering the recovery of Las Vegas and will continue to actively rehire and recruit employees as quickly as possible.

In a committee hearing on the bill last month, UNITE HERE international president D. Taylor said that only around half of the Culinary workers are back to work, and he thinks that, “hopefully, a year from now, we would be back completely,” citing the lack of business travel this year, among other factors.

There is some evidence that casinos want to keep labor costs low rather than return to pre-pandemic employment levels, though.  

MGM, for instance, boasted high profit margins despite lower revenues in the first quarter of 2021, because of “cost discipline,” one element of which is having fewer employees. CFO Jonathan Halkyard said in the latest quarterly earnings call in late April, “the labor costs we expect to be largely sustainable.”

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Red Rock Resorts co-founder Frank Fertitta (left), at the Palms in 2018. (Photo by David Becker/Getty Images)

The latest Red Rock Resorts earning call was similar—CEO Frank Fertitta called them “historically high margins,” and CFO Stephen Cootey credited “maintaining our operational discipline around labor and around marketing.” In an earlier earnings call, the third quarter of 2020, Fertitta said the pandemic changed everything: “We believe there’s been a permanent shift in the cost structure. During the shutdown, it gave us the ability to question everything we were doing.”

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Some businesses that will be affected by the law have already hired hundreds of new employees,  leaving fewer spots for the veteran workers come July 1.

Diane Eshelman worked for Fiesta Henderson for 8 years in various roles in the catering department before being laid off by the pandemic.

Earlier this month, she saw an advertisement: Station Casinos was holding a jobs fair to hire 800 new people, some on the spot. Those are vacancies that won’t need to be filled under the Right to Return law.

“I resent the way that they’re doing this a lot, because I know for a fact that there’s so many people that were laid off, that they could call back, and that they have not called back, and I don’t think that’s right.” Eshelman said, adding that new hires might be attractive for having fewer benefits and lower pay.

A Red Rock Resorts spokesperson said, “Any criticism of any hiring done in advance of the effectiveness of SB 386 is in effect a criticism of both SB 386 and its proponents, who in their zeal to appear to be doing something as a result of the pandemic punished the very individuals that they claim to support — employees.”

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One group of nonunion workers won’t qualify for Right to Return until at least next year because they have no casino to return to.

Station Casinos opted not to open Texas Station, Fiesta Rancho, and Fiesta Henderson (as well as the Palms, which they sold). Texas Station and Fiesta Rancho won’t open before June 2022, and Fiesta Henderson is nonoperational until at least the end of this year.

A former Station worker, who spoke on the condition of anonymity, for fear of retribution, has been devastated by the layoff, and the indefinite closure of her former workplace. A single mother, she spent years working her way up and losing time with her children, from spending years on the graveyard shift to eventually working a day shift and being able to take holidays off.  

It all vanished overnight. “You want to take what people climbed so much to achieve, which isn’t much anyway, away from them?” During the pre-pandemic union campaign, she said, management’s “whole philosophy was we’re family and it will change the family dynamic” to unionize, she said, but once the pandemic hit, she felt that they were treated coldly and impersonally.

“I would just like Stations to realize that everybody that they’ve terminated is a person with a life and a family, that this is affecting so many people—not just the employee,” she said. “The Fertittas were lucky to be born into money and a lot of people aren’t. A lot of people never get past a certain point of income to become wealthy, they’re just surviving.”

And Station has the opportunity to set an example: “If they did the right thing by their employees that they already have, and the ones they’ve terminated, they could rectify this,” she said. “Stations is so wealthy that they can afford their former employees.”

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Station Casinos recently mailed a letter to former full-time employees, dated June 21, which underscored their opposition to the law.

“The new law is no cause for celebration unless you celebrate political power displays more than you celebrate jobs and food on the table,” Station Casinos wrote in the letter.

Station presented the law as a loss for full-time employees, saying, “Unfortunately, bringing you back has become more difficult due to a new law that recently passed.” Station has hired over 1,500 former employees already, the letter noted.

Station warned that full-time employees got the short end of the stick in the law. They suggested that the law gives recall preference to seniority above all, meaning that a part-time employee could get a full-time job offer ahead of a former full-timer, so long as they had seniority. This is a matter of interpretation: the law mandates that employers’ offers must be similar to the hours the employer worked before. Attorney Jen Sarafina said that this means part-time employees might not be called for full-time positions. An opening for a full-time job would see only previously full-time staff as eligible, under that interpretation. (The letter also said employees get unlimited chances to decline the offer to return, but they only get to decline three “bona fide offers,” meaning they follow the law’s guidelines on job classification and hours, before they’re no longer contacted.)

Khan said the law “mandates recall of workers by seniority, but does not require ‘priority’ for part-time workers.”

The letter also clarifies that there are no plans to reopen Fiesta Henderson, Fiesta Rancho or Texas Station in 2021, and so “have no plans to call back any former Team Members from these closed properties.” In fact, the law “actually makes any reopening and any rehiring that comes with reopening less likely,” because it makes hiring riskier and more costly.

Khan with the Culinary called that “a ridiculous claim as one of the owners of Station Casinos, Frank Fertitta, is aboard his football field-sized (308 foot) super mega yacht off the coast of Italy.”

“We don’t want any false information you might have heard to cause you to not take another job while holding out for a job with a Station Casinos property which might not or will not return,” the company letter said.

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