CAC has announced plans to introduce computer scheduling in lieu of the current manual process.  This change is designed to facilitate the scheduling process and to give both management and the dealers greater flexibility once the program is fully implemented.  The union agreed to switch to computer scheduling, subject to CAC confirming several details related to how the new program will actually work.  Both sides expect computerized scheduling to begin soon.

CAC recently announced a new program intended to further the business partnership between the Company and its workforce.  Obviously, both the Company and employees benefit every time a new group, convention or function books its planned meeting or social event at CAC.  To encourage employees, including dealers, to do their part in securing new group functions, the Company is offering a cash bonus of up to $500 to any employee who is instrumental in attracting new business.

The details of the program were shared with the union at this latest bargaining session.  The union requested additional time to bargain about the new program, but agreed to allow the Company to keep the incentive plan in place until negotiations on this subject are completed.

Finally, the parties discussed one provision, overtime, which would be included in any new collective bargaining agreement.  The parties were able to agree on most of the details of this provision, with one notable exception – when dealers would be entitled to overtime pay.  Both the union and CAC agreed that whether overtime is paid only after 40 hours a week or after 8 hours in a day as well is an economic issue.  Because the parties have not started to negotiate economic terms, the overtime issue was deferred for later treatment.

If you have any questions about this bargaining session or anything else related to negotiations, please feel free to ask your supervisor.

During the bargaining session, the Union rejected CAC’s proposal, indicating that it would only agree if the Company promoted one part time dealer to full time status for every laid off dealer who returns for seasonal work.   In response, CAC made clear that it could not agree to this counter-proposal because it does not have sufficient need for additional full time dealers at this time.

The Union kept referring to previous layoff/recall agreements – which CAC does not believe to be applicable to the current circumstances – as the basis for its position. Thus, the parties were unable to reach agreement, leaving for now approximately 30 part timers on layoff.  CAC is considering its options in attempting to bring people back to work in a manner consistent with the needs of the business. We will keep you apprised.

In an effort to limit the number of seasonal employees to be laid off, CAC proposed keeping a total of 20 seasonal Table Games dealers as regular part time Table Games dealers, all of whom were previously employed as regular part time dealers. In addition, CAC offered to promote 5 regular part time Table Games dealers to a full time dealer position. In addition, CAC proposed to retain two seasonal Poker dealers and to transfer two Table Games dealers, who had previously sought transfer, to Poker dealer positions. In total, the Company offered to retain 22 seasonal dealers and to promote 5 regular part time dealers to full time positions.

The UAW did not agree to this proposal.

Instead, the Union insisted that the number of seasonal dealers who are to be retained be equal to the number of regular part time dealers who are to be promoted to full time status. Since CAC has a need for only an additional 5 full time dealers, this would limit the number of seasonal dealers to be retained to 5, rather than the 22 requested by the Company. The parties agreed to discuss this issue again at the next bargaining session. Although the Company also offered to reduce the number of Keno/Simulcast employees to be laid off from two to one, this proposal was also deferred until the next bargaining session, which is scheduled for September 23, 2009.

As always, if you have any questions regarding contract negotiations, please contact me or Table Games management.

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In an effort to get the parties back on track to focus on reaching an agreement for a first contract, the Company suggested the parties formulate a “road map” of the issues to better organize discussions during upcoming bargaining sessions. The Company representatives also recommended that the parties agree to pairing various contract proposals together based on subject matter. These suggested approaches are designed to make future bargaining more productive and efficient rather than wasting time discussing issues that are not directly relevant to reaching agreement on a first contract.

UAW representatives agreed to consider the Company’s suggestions, although the union did not want to be limited to what it can discuss during bargaining sessions. Union representatives also stated the parties should spend more time than has already been spent discussing individual bargaining provisions.

Despite the Company’s desire to make progress toward a fair and equitable contract, the only contract provision that was discussed during this last bargaining session was the grievance and arbitration article. The union is seeking to add another step to the grievance process for discussing proposed settlements of grievances once they are filed. Rather than dragging the process out with another step, the Company’s position is to streamline the grievance process so that disputes can be quickly resolved. According to Company representatives, a grievance can be settled at any point in the process and the Company believes the parties should not waste time or resources by adding another step to the procedure. No agreement was reached on this issue.

Over the course of the more than 50 good-faith bargaining sessions with the UAW, the Company has consistently come to the table prepared to productively work with the union to work toward a fair contract. Unfortunately, the UAW has not always exhibited the same level of organization. We hope the UAW will work with the Company and agree to a “road map” or agenda of issues to discuss in future bargaining sessions so negotiations can be more productive.

The Company remains committed to bargaining in good faith with the UAW to reach a fair contract for both the dealers and all of our 14,000 Atlantic City team members. The parties scheduled their next bargaining session for the week of August 31.

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In response, UAW representatives acknowledged the importance of the Company’s need to remain competitive. Recent gaming developments in Pennsylvania, Delaware, and New York will only increase the competitive pressure on Caesars and the entire Atlantic City gaming industry. For this reason, Caesars once again raised proposals, including rest breaks and daily tokes, designed to improve productivity and maintain Company flexibility in adjusting to the new competitive realities.

On the bright side, we are pleased that there have been some signs of stabilization to the business. As a result, Caesars is now in a position to recall all laid off dealers. We believe these welcome changes are in part due to the Company’s difficult decisions it had to make last fall and earlier this year. This once again reflects how critical it is to be able to respond to business challenges quickly.

The union gave the Company a revised seniority proposal. Despite the changes, the parties remain apart on the fundamental issue of the role seniority should play in such actions as lay off, recall and filling of job vacancies. Caesars has always recognized the importance of length of service. However, in this environment, our business cannot be hamstrung by elevating seniority over everything else, including job performance and customer service. When economic and competitive forces compel the Company to consider workforce restructuring, it must have the flexibility to consider all of these factors. Ultimately, everyone gains when we can deliver the best gaming experience to our customers. And, employees consistently demonstrating optimal performance should not be penalized simply because their length of service is shorter.

Undoubtedly, the parties will return to their discussion about the importance of operational flexibility to remain competitive when negotiations resume on June 24th and 25th.

In the mean time, the last thing that we can afford is further challenges and disruptions to our business. By attacking Caesars and Harrah’s publicly through ads and billboards, the union risks hurting our business, which in the end could impact negatively all of us.

The Company remains committed to bargaining in good faith for a reasonable and economically feasible contract that preserves jobs for all employee groups and ensures we can remain competitive in an increasingly challenging environment for Atlantic City casino operators.

Please be sure to ask any of our management team any questions that you may have about this update or collective bargaining negotiations in general.

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The two principal issues at the bargaining table were merit pay, and the hiring of seasonal dealers and the recall of the remaining laid-off dealers. CAC would like to recall laid-off dealers, despite the challenging economy. CAC proposed to the union that CAC recall all remaining laid-off employees as part of its seasonal hiring of dealers. This would mean that laid-off dealers could be recalled as early as this month to supplement the annual increase of dealers during the summer months. CAC also proposed that the laid-off dealers would be the first to remain at the end of the summer, assuming business justified keeping additional dealers. However, the parties remain apart on one key issue raised by the union as part of the recall plan.

The union requested that the former full time dealers who were assigned part time dealer positions as part of last year’s lay-off be, in effect, guaranteed a full time work schedule. In response, CAC noted that no dealer is entitled to a guaranteed number of hours per week, including full time dealers, and the small group of former full time dealers should not be given any greater rights. In fact, Casino management is already providing a four day a week preference to this group so that, generally, they are getting more hours than the other part time dealers.

In addition, management has always exercised the right to schedule dealer hours on the basis of a variety of factors, including volume of business, number of call-outs and early-outs, vacation schedules and the toke rate. By guaranteeing hours to this group of dealers, CAC would be stripped of this flexibility. For these reasons, CAC told the union that it could not agree to the union’s proposal, but that it would consider the union’s position further before the next set of negotiations. CAC made clear that it did not want the union’s proposal to delay the recall of laid-off dealers.

On merit pay, CAC rejected the union’s proposal to condition modification of the merit pay plan on two contingencies related to management bonuses and business volume. CAC explained that the merit pay changes have been implemented for all other employees without these contingencies. Also, the contingencies do not provide the Company with enough latitude and protection to deal with the difficult economy. After CAC agreed to permit the union additional time to consider a new position, the union did not change its proposal. CAC then declared impasse and announced that it would put in place the merit pay changes.

Two other issues were discussed briefly: 1) the Company agreed to provide the union with additional information about EDR changes, without waiving its legal position about its right to institute the cafeteria changes unilaterally; and 2) based on recent regulatory changes, CAC may begin taking dealer tokes from the players’ pot for special events such as the World Series of Poker. Both parties agreed that this change should not affect dealer toke rates for these events.
Negotiations will resume during the week of May 18th, 2009.

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The Union put forth counterproposals regarding how the Company might achieve its necessary cost savings on both the 401k and the merit increase program with the requirement that if several contingencies occurred during the year, then the Company would reinstate both programs to their original design.

One other Union proposal stated that all dealers to receive the same increase regardless of performance evaluation. CAC rejected this proposal on the grounds that this approach disregards individual merit and would create a performance management process that was not aligned with the Company program. The Company further said this counterproposal was not appropriate for interim bargaining.

As for the 401k match, the Union proposal agreed to suspend the Company match, providing that CAC would reinstate it if certain arbitrary conditions occurred. CAC rejected this proposal and counter proposed to reinstate the match to the dealers at such a time when all of the other employees at CAC received matching contributions from the Company. The Parties both agreed that there were fundamental differences in their proposals as to when or even if these programs would be reinstated.

The final outcome of the Friday session was that CAC declared that it had satisfied all legal obligations to bargain, but the Parties had not reached agreement, so it would suspend the Company 401k contribution effective Monday, April 6, 2009 for all dealers, dual rates, and keno simulcast employees.

However, CAC said it would continue to interim bargain over the merit pay program despite the Parties’ stalemate, because merit pay increases were only being accrued, not actually paid, so that money was not being expended during the bargaining.

Bargaining is set to resume on April 23rd & 24th.

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The parties met again on February 25th at the Sheraton. The Company honored the Union’s request to present information about the cost savings initiatives at the Company, which outlined the program designed to reduce costs by $20 million and its equitable distribution of the sacrifice among employees of all levels. In fact, the first actions of that program exclusively targeted management compensation, reducing all management salaries by 5 percent and freezing salaried employee compensation without increases for 2009. This plan also eliminates all aspects of management bonuses except for the customer service components, which accounts for a small percentage of the management previous bonus potential and is shared with all employees. It is important to note that customer service rewards will still be offered for all employees. The customer service bonuses for 2008 have already been paid for non-management employees. Hourly employees are also still eligible for merit increases in 2009.

Other issues of interim bargaining included the reduction of merit increase and bonus percentages as well as the suspension of the 401k match, which has already been implemented for management. The 401k suspension and the merit increase changes have also been implemented in all departments and affects all employees who participate in these company programs. The Union owes the Company a counter proposal on these issues.

As we work together to adapt to the increasing decline in economic conditions, it is important for you to know that the Company will take the necessary but difficult steps required to preserve the future for our employees at large. We are not asking any one work-group to shoulder a disproportionate share of the burden, because we all share a vested interest in the future success and competitiveness of our Company. We will continue to exercise our rights, and honor our responsibilities to all of our stakeholders. We appreciate the continued support and shared commitment of our dealers, and all of our employees during this difficult period.

Our next bargaining session will be March 24th and 25th.

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