Baldonado v. Wynn Las Vegas

• Decision Date: 09 October 2008
• Docket Number: No. 48831.,No. 49241.,48831.,49241.
• Citation: 194 P.3d 96
• Parties: Daniel BALDONADO and Joseph Cesarz, Individually and on behalf of others similarly situated, Appellants, v. WYNN LAS VEGAS, LLC, Respondent. Wynn Las Vegas, LLC, Appellant, v. Daniel Baldonado and Joseph Cesarz, Individually and on behalf of others similarly situated, Respondents.
• Court: Nevada Supreme Court

194 P.3d 96

Daniel BALDONADO and Joseph Cesarz, Individually and on behalf of others similarly situated, Appellants, v. WYNN LAS VEGAS, LLC, Respondent.

Wynn Las Vegas, LLC, Appellant, v. Daniel Baldonado and Joseph Cesarz, Individually and on behalf of others similarly situated, Respondents.

No. 48831.

No. 49241.

Supreme Court of Nevada.

October 9, 2008.

Leon M. Greenberg, Las Vegas; Kemp & Kemp and James P. Kemp, Las Vegas; Thierman Law Firm and Mark R. Thierman, Reno, for Appellants/Respondents Daniel Baldonado and Joseph Cesarz.

Kamer Zucker Abbott and Gregory J. Kamer, and Bryan J. Cohen, Las Vegas, for Respondent/Appellant Wynn Las Vegas, LLC.

Alda A. Anderson, Las Vegas, for Amici Curiae Donald Mello and Jack Lund Schofield.

Henry M. Willis, Los Angeles, California, for Amicus Curiae Transport Workers Union, AFL-CIO.

BEFORE THE COURT EN BANC.

OPINION

By the Court, DOUGLAS, J.:

This opinion addresses several issues arising in the context of Nevada's employment law. We primarily focus, however, on three important and novel questions: (1) whether NRS 608.160, which prohibits employers from taking employee tips, implies a private cause of action to enforce its terms; (2) whether, in the event that no private cause of action exists, declaratory relief is nonetheless available to employees who allege that the statute's terms were violated by an employment policy; and (3) whether those employees asserted a viable breach of contract claim based on the employer's unilateral modification to the employment policy.

Appellants are table game dealers employed at a Las Vegas, Nevada, casino. In 2006, the casino modified its employment policy to require the dealers to share customer tips with persons in certain lower-level management positions. Appellants, believing that the modified policy violated Nevada labor laws, including NRS 608.160, sought relief in the district court.

The district court determined that no private cause of action existed by which appellants could pursue their claims for statutory violations and concluded that appellants' at-will employee status precluded any challenge to the employment policy on breach-of-contract grounds. Consequently, the court ruled against the dealers, in favor of the casino. Thereafter, the court denied the casino's motion for attorney fees under NRS 18.010(2)(b) (frivolous claims). Appellants have appealed from the district court's written decision ruling in the casino's favor, and the casino has appealed from the order denying it attorney fees.

After considering the parties' arguments, we conclude the following. First, the Nevada Labor Commissioner, who is entrusted with the responsibility of enforcing Nevada's labor laws, generally must administratively hear and decide complaints that arise under those laws. Accordingly, we will imply no private cause of action to enforce NRS 608.160, or the other labor statutes at issue here, in the district courts in the first instance. Second, since declaratory relief is not available when an adequate statutory remedy exists, appellants lacked standing to seek such relief. Third, since appellants are at-will employees, the employment terms of whom are generally subject to unilateral prospective modification by the employer, and because as a matter of law they had no enforceable contract concerning the future distribution of their tips, they failed to demonstrate a genuine dispute with respect to whether the employment policy modifications constituted a breach of contract. Accordingly, after determining that the district court did not abuse its discretion in denying attorney fees, we affirm the district court's decision and order denying attorney fees.

FACTS AND PROCEDURAL HISTORY

Appellants Daniel Baldonado and Joseph Cesarz are employed as table game dealers for respondent Wynn Las Vegas, LLC. According to appellants, they began working in those positions for the Wynn company's casino, the Wynn Las Vegas, when it first opened for business in April 2005.

Shortly before the casino opened for business, on March 28, 2005, the Wynn issued a toke pooling and distribution policy setting forth the manner in which employee tokes, or tips, would be collected, calculated, and distributed.¹ Under the March 28 policy, all table game dealers' tokes were collected over a 24-hour period and counted by a dealer-elected toke committee. The tokes were then distributed amongst the dealers based on hours worked and accrued vacation and sick time. The March 28 policy provided that any modifications to the toke policy "must be approved by a vote process," requiring that all suggested amendments be approved by "Table Games Management," which had authority to veto any suggestion that it felt was not in the Wynn's best interest, and then by a majority of the voting dealers. Another Wynn policy, the April 13, 2005, policy, generally prohibited managers and supervisors from accepting or receiving any tokes. In the Wynn's employee handbook, which appellants acknowledged receiving, however, it reserved the right to change, supplement, or eliminate any of its policies.

The next year, in August 2006, the Wynn notified the table game dealers that it was modifying its toke policies to remedy an anomaly that, it claimed, had resulted under the company's 2005 policies: with tip income, table game dealers earned more compensation than their supervisors. Under the modified policy, which combined the pit manager and floor supervisor positions to create a "casino service team lead" position, each service team lead received a portion of the daily toke pool. "Box persons," or "craps team leads," also received a portion of the daily toke pool. The remaining portion was distributed to the dealers. According to the Wynn, these toke policy modifications decreased table game dealers' daily toke shares by 10 to 15 percent, resulting in an overall salary reduction. The modified policy was effectuated on September 1, 2006.

Shortly thereafter, appellants instituted a class action against the Wynn, asserting that its actions in reducing their compensation under the modified toke policy violated NRS 608.160 (unlawful for employers to take employee tips), NRS 608.100 (unlawful for employers to require employees to rebate compensation earned and paid), and NRS 613.120 (unlawful for managers and shift bosses to receive gratuities from employees as a condition of the employees' employment). According to their amended complaint, appellants sought compensatory and punitive damages and any appropriate injunctive or equitable relief not only for the alleged statutory violations, but also for breach of contract, the contractual and tortious breach of the implied covenant of good faith and fair dealing, and in relation to their request for declaratory relief.

Thereafter, appellants moved for partial summary judgment and a preliminary injunction, requesting that the district court declare the Wynn's modified toke policy void under NRS 608.160 and NRS 613.120, and unenforceable as against public policy. The next day, the Wynn moved to dismiss the complaint or, in the alternative, for summary judgment, maintaining that no private cause of action existed to pursue the statutory violations, since the statutes were enforceable only by the Nevada Labor Commissioner, and that appellants were at-will employees with no contractual relationship on which to base their breach of contract claims. Both motions were opposed.

After hearing the parties' arguments, the district court entered an order denying appellants' motion and granting the Wynn's motion. In its order, the court determined that the particular statutes relied on by appellants provided no private causes of action. The court noted that the Labor Commissioner is charged with enforcing the specified statutes, and thus, it stated, appellants must follow "the administrative process" before seeking relief in the district court. Finally, the court also found that appellants were at-will employees with no written employment contract and, therefore, determined that the Wynn had the right to change its tip-pooling policy.

Appellants have appealed from the district court's order dismissing their complaint. That appeal was assigned Docket No. 48831.²

Meanwhile, the Wynn moved the district court for attorney fees under NRS 18.010(2)(b), contending that appellants had brought and maintained their claims without reasonable grounds. Appellants opposed the motion. The district court, determining that appellants' claims were not brought or maintained without reasonable grounds, denied the Wynn's request for attorney fees. The Wynn has appealed from that order, and its appeal was assigned Docket No. 49241.

After briefing was completed in both appeals, the appeals were consolidated. The Transport Workers Union of America and former State Assembly members Donald Mello and Jack Lund Schofield were allowed to file amicus briefs.

DISCUSSION

In resolving these appeals, we first address the issues raised with respect to the district court's order dismissing appellants' complaint. In so doing, we examine three general issues: whether NRS 608.160 implies a private cause of action, whether appellants appropriately sought declaratory relief, and whether appellants demonstrated a viable claim for breach of employment contracts. After determining that the district court properly refused to allow those claims to proceed to trial, we turn to the Wynn's appeal from the district court's order denying it attorney fees. We conclude that, because appellants' complaint raised reasonably supportable claims, the court did not abuse its discretion when it disallowed attorney fees.

Appeal from the district court's order dismissing appellants' complaint

The parties attached additional materials to the motion to dismiss and related filings in the district court, including affidavits and the employment policies at issue. The district court did not exclude those...