Red Rock Resorts Sues NLRB, Seeks To Halt Unfair Labor Practice Cases

Casino operator Red Rock Resorts Inc. has filed a lawsuit against the National Labor Relations Board (NLRB), challenging the structure and authority of the agency. Red Rock Resorts seeks both temporary and permanent injunctions to stop two major unfair labor practice cases that are currently pending before the NLRB.

The company, which owns the Station Casinos brand, submitted the lawsuit Tuesday in the U.S. District Court for the District of Nevada.

The lawsuit represents the latest development in an ongoing legal and labor dispute between the casino operator and the NLRB, a federal agency responsible for enforcing U.S. labor laws. At the heart of the case is Red Rock Resorts’ contention that parts of the NLRB’s structure violate the U.S. Constitution, specifically Article II, which establishes the powers and limitations of the executive branch.

The company’s legal team argues that NLRB board members and administrative law judges should be removable by the president, but they are not, as they can only be removed for “good cause.” This, according to the lawsuit, constitutes a violation of executive authority under the Constitution.

The legal challenge also questions the fairness of the NLRB’s process, asserting that the agency serves as “prosecutor, judge, and jury” in the same case, thereby denying Red Rock Resorts the right to a jury trial. The company’s attorneys argue that this arrangement violates fundamental legal principles and undermines the fairness of the proceedings.

Red Rock accused of union-busting

This lawsuit comes in the wake of several ongoing labor disputes between Red Rock Resorts and the Culinary Workers Union, Local 226, a major labor organization representing hospitality and casino workers in Nevada. In particular, the lawsuit coincides with NLRB trial hearings stemming from a complaint filed in April 2021.

In that complaint, the NLRB accused Red Rock Resorts of using COVID-19 pandemic-related layoffs to weaken union representation efforts at its properties, which include several casinos under the Station Casinos brand. Among them are Durango Casino & Resort; Green Valley Ranch Resort, Casino & Spa; Santa Fe Station; and others.

The union has long sought to negotiate collective bargaining agreements at several of Station Casinos’ properties, but despite efforts, the parties have yet to reach a contract. Some properties initially expressed interest in union representation but later reversed course, leading to accusations of union-busting tactics. Several of these actions are now central to the NLRB’s pending unfair labor practice cases.

The ongoing legal battle has placed Red Rock Resorts at odds with the NLRB and the union. In June, the NLRB ruled that Red Rock Resorts must bargain with the Culinary Workers Union at its Red Rock Casino property. The decision came after the agency found that the company engaged in tactics to undermine the union’s organizing efforts before workers could vote on union representation. Red Rock Resorts has since appealed that decision to the U.S. Court of Appeals for the District of Columbia.

Culinary Workers Union strikes out at Red Rock

Ted Pappageorge, secretary-treasurer of the Culinary Workers Union, responded to the latest lawsuit by criticizing Red Rock Resorts’ leadership, including the Fertitta brothers, Frank and Lorenzo, who control the company. He noted that they are expected to testify in the ongoing NLRB proceedings.

Pappageorge emphasized that the union will continue its efforts to represent workers and push back against what it sees as anti-union practices by the casino operator.

This lawsuit is not without precedent. Similar challenges to the NLRB’s structure and authority have been raised in other high-profile cases. In July, the NLRB temporarily paused proceedings in a case involving Elon Musk’s SpaceX while the company’s legal team challenges the agency’s structure in court.