Judge Denies Wynn Injunction Against Fontainebleau in Poaching Suit

Posted on: May 9, 2024, 06:04h. 

Last updated on: May 10, 2024, 09:12h.

Corey Levitan Read More
Expertise: Commercial Gaming, Entertainment, Expert Insight, Las Vegas.

A Clark County district judge has denied Wynn Resorts the temporary injunction it sought against Fontainebleau, the new Strip casino resort it is suing for poaching its executives.

The Fontainebleau, foreground, overshadows the Wynn and Encore in a photo taken from the top of the Strat. (Image: Getty)

On Thursday morning, Judge Mark Denton ruled that Wynn Resorts’ request was overly broad and, therefore, not appropriate for an injunction.

Wynn sought the injunction to stop Fontainebleau from enticing any more of its executives into breaking their employment contracts to work at Fontainebleau, which opened on Dec. 13, 2023.

According to Wynn’s lawsuit, Fontainebleau breached a settlement it struck with Wynn Las Vegas (WLV) earlier in 2023 to refrain from “outrageous attempts … to interfere with WLV’s contracts” by attempting to hire away several Wynn employees, who are bound by contractual noncompete clauses.

In its lawsuit, Wynn cited five violations of the settlement.

Fontainebleau countered that the court doesn’t have the authority to issue a blanket injunction preventing employees from taking a better job at higher pay with a competing company.

The Naughty List

Among the allegedly poached employees named by Wynn Resorts’ suit is David Snyder, its former VP of culinary operations and restaurant development. After breaching his own Wynn noncompete contract to come aboard, the suit alleges, Snyder then attempted soliciting his former co-workers, including Wynn Las Vegas executive chef Chef Sandy Shi.

The suit also names sous chef Brian Kenny, another Wynn staffer who jumped ship to Fontainebleau, and who then allegedly tried wooing chef Corey Francis into joining him. Accused of the same thing is former Wynn executive pastry chef Patrice Caillot, who tried hiring Wynn pastry chef Vivian Lam almost as soon as he crossed the street.

Also named is Michael Waltman, Fontainebleau’s senior VP of nightlife, for allegedly trying to hire Wayne Crane, Wynn’s executive director of talent and nightlife, and Brett Mufson, president of Fontainebleau Development, who, along with David Grutman of Groot Hospitality, are accused of attempting to poach Ryan Jones, Wynn’s VP of nightlife.

Wynn Resorts’ suit also accuses Fontainebleau General Counsel Mike Pappas of being “duplicitously involved in this interference.” He did so by being “instrumental in Fontainebleau’s latest interference” after negotiating the previous lawsuit’s settlement.

When a restraining order against further solicitation was granted to Wynn, according to the lawsuit, Fontainebleau responded by using a recruiting agency to hide its efforts and claiming the employees it hired were slated to work at Fontainebleau’s Miami location.

Weren’t Noncompete Clauses Just Outlawed?

Last month, the Federal Trade Commission (FTC) banned noncompete clauses from employee contracts nationwide. In a press release, the agency said its ruling protects “the fundamental freedom of workers to change jobs.”

Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” FTC Chair Lina M. Khan said in a press release announcing the ruling.

Under the new FTC rule, no new noncompetes are enforceable, and existing noncompetes are no longer enforceable for 99.25% of American workers.

However, existing noncompetes for senior executives, such as those previously obtained by Wynn, are still enforceable.