Red Rock Resorts All-Male, All-White Board Scolded by Las Vegas Casino Union
Posted on: February 1, 2022, 12:03h.
Last updated on: February 1, 2022, 10:12h.
Red Rock Resorts (RRR) is the target of yet another attack from the Culinary Union, the largest casino union in the United States.
In a letter addressed to US Securities and Exchange Commission (SEC) General Attorney Stacie Gorman, the Culinary Union urges the financial markets regulator to investigate why RRR has an all-white, all-male board of directors. Red Rock Resorts is a major stakeholder in Station Casinos, the privately held unit of billionaires Frank III and Lorenzo Fertitta.
In his letter to Gorman, Culinary Research Analyst Zachary Poppel says the union questions whether RRR has violated SEC rules when it comes to corporate governance diversity requirements.
Red Rock’s five-person board has been the same white men since its 2015 IPO and we believe Red Rock’s justification for its board composition relies on deficient claims,” Poppel said.
Red Rock Resorts is the only publicly traded gaming firm licensed in Nevada to have a board without a female. There are currently nine publicly traded casino companies operating in the state.
Union, RRR Long at Odds
The Fertittas and the Culinary Union have deep-rooted opposition towards one another. The billionaire brothers have successfully sought to keep the union out of its Nevada casinos for many years.
The union and RRR are currently amid a legal battle over whether Station Casinos’ management purposely interfered with a December 2019 unionization vote at its Red Rock Resort in Summerlin. Red Rock workers saw their compensation increased ahead of the vote, which resulted in the casino workforce deciding not to unionize.
After fielding numerous complaints, the National Labor Relations Board (NLRB) interjected with a federal injunction filed in the US District Court of Nevada, asking a judge to override the vote. Nearly every casino on the Strip is represented by Culinary, notable exceptions being The Venetian and Palazzo.
Red Rock said its pay and benefits improvements announced in 2019 were in the works long before employees began their effort to organize at the property.
The NLRB case is ongoing. In the meantime, US courts have ordered RRR to turn over internal communications in the lead-up to the new payment structure’s announcement to the NLRB.
“The [court] decision punishes Red Rock team members and the Red Rock property because Station Casinos treated its team members too well,” a company statement last year contended.
The Nasdaq Board Diversity Rule, approved by the SEC last August, requires that companies that are publicly traded on Nasdaq exchanges “have or explain why they do not have at least two diverse directors” by August of 2023. Nasdaq reasons that diverse boards are “positively associated with improved corporate governance and financial performance.”
In the gaming industry, Wynn Resorts currently leads the way in terms of female representation. The casino giant overhauled its board makeup in the wake of the career-ending sexual misconduct allegations levied against its namesake founder Steve Wynn in 2018. Wynn Resorts has four females on its 10-member board.
Casino Company — Board Size — Female Directors
Red Rock Resorts — 5 — 0
Las Vegas Sands — 11 — 3
Caesars Entertainment — 10 — 3
Boyd Gaming — 10 — 3
MGM Resorts — 12 — 4