Laid-Off Workers Hit Jackpot Against Casino
An Alabama casino that repeatedly laid off its employees without notice may end up owing millions to its former workers after losing its appeal of a federal lawsuit.
VictoryLand, a greyhound racing track that grew to include a casino with electronic bingo machines, conducted three rounds of layoffs in 2010. The first round, in January, affected 68 workers and was intended to be temporary. But the second and third rounds terminated the jobs of every casino employee, and were the result of a state task force crackdown on illegal gambling.
Most gambling is illegal in Alabama, but there are limited exceptions for bingo. Casinos like VictoryLand have interpreted the exceptions as allowing electronic bingo machines that closely resemble slot machines, to the chagrin of state officials. In 2008, then-Gov. Bob Riley issued an executive order creating a task force to crack down on illegal gambling in Alabama. VictoryLand, the state’s largest casino, was a prime target.
Shortly after the temporary layoffs, the task force raided VictoryLand. The casino obtained a restraining order to prevent the agents from carting away their gaming machines, but a few days later, the Alabama Supreme Court vacated the order and VictoryLand was forced to immediately close. All casino employees were laid off.
VictoryLand secured another restraining order a few weeks later and reopened, this time for about five months. But again, the state’s high court cleared the way for the task force to come back, and VictoryLand closed in the summer of 2010. For the third time in eight months, casino employees were abruptly terminated.
WARN Act Violations
The former employees sued VictoryLand alleging violations of the Worker Adjustment and Retraining Act of 1988, or WARN Act. The WARN Act was designed to give workers a chance to minimize their unemployment by requiring most employers with 100 or more employees to provide 60-day notice of mass layoffs and plant closings.
A District Court granted summary judgment for all the workers, finding that the first and second rounds of layoffs could be considered a single mass layoff. The final round was defined as a plant closure.
VictoryLand appealed, objecting to the decision to consider the first two layoffs as a consolidated event. If the court found them to be separate layoffs, the first round would fall short of the “mass layoff” definition and would not qualify for the WARN requirement.
VictoryLand also argued that it was exempt from providing notice because of the “unforeseeable business circumstances” exception of the WARN Act. The act excludes layoffs resulting from “some sudden, dramatic, and unexpected action or conditions outside the employer’s control.”
Las Vegas employment law attorney Andrew L. Rempfer called VictoryLand’s argument “intellectually dishonest.”
“The Court is basically saying, ‘we don’t care about your criminal problems, you cannot use that violation of criminal law to justify your violation of civil law,’” Rempfer said.
Some Workers May Be Excluded
The appeals panel upheld part of the ruling, finding VictoryLand liable for WARN violations in the second and third rounds of layoffs. But the judges reversed the lower court’s decision to lump the workers from the first layoff in with the others, sending the case back to the District Court for a closer examination.
“The Court is stating these are still ‘employees’ after the layoff,” Rempfer said. “But the record was unclear at the District Court level how long the January layoff would last so the District Court has to resolve that issue by gathering more evidence of the duration of the layoff. If it would last more than six months, then the January employees are ‘affected employees’ for WARN purposes.”
Affected employees are entitled to 60 days of wages. The Montgomery Advertiser reports the back wages could cost VictoryLand between $3 and $5 million.
VictoryLand’s fight for survival may not yet be over. It reopened again in December 2012 after the anti-gambling task force was disbanded. But Alabama Attorney General Luther Strange ordered another raid in February, seizing VictoryLand’s hundreds of bingo machines and shutting the casino down. VictoryLand’s attorneys are fighting to get the machines back, while the state is seeking forfeiture so they can be sold.
Do you think the casino raids were “unforeseeable” as VictoryLand contends? Have you ever been laid off without warning? Share your thoughts in the comments section below.