Court Rules Against Wynn in Lawsuit Over Employee Recruitment at Fontainebleau
A judge in Clark County has rejected Wynn Resorts' request for a temporary injunction against Fontainebleau, the recently opened Strip resort they're suing for stealing their executives. On Thursday, Judge Mark Denton decided that Wynn's plea was too broad and hence unsuitable for an injunction. Wynn asked for the injunction to prevent Fontainebleau from luring any further executives into breaking their work contracts and joining Fontainebleau.
Wynn filed a lawsuit against Fontainebleau in 2023, accusing them of breaching a settlement agreement they had previously reached with Wynn Las Vegas. According to the lawsuit, Fontainebleau violated the terms of the settlement by trying to recruit multiple Wynn employees, who are bound by contractual non-compete clauses.
Wynn's lawsuit cites five instances where Fontainebleau is said to have interfered with their contracts.
Fontainebleau argued that the court had no authority to issue a broad injunction preventing employees from leaving to work for a rival company with better pay.
The Blacklist
David Snyder, a former VP of culinary operations and restaurant development at Wynn, is among the employees named in the lawsuit. Allegedly, he broke his own non-compete agreement with Wynn to join Fontainebleau and then attempted to entice Wynn executive chef Sandy Shi to follow suit.
The suit also mentions sous chef Brian Kenny, another employee who left Wynn for Fontainebleau, and who then tried to persuade chef Corey Francis to join him. Former Wynn executive pastry chef Patrice Caillot is also named, accused of trying to recruit Wynn pastry chef Vivian Lam practically as soon as he started with Fontainebleau.
Michael Waltman, Fontainebleau's senior VP of nightlife, is accused of trying to lure Wayne Crane, Wynn's executive director of talent and nightlife, and Brett Mufson, president of Fontainebleau Development, who, along with David Grutman from Groot Hospitality, attempted to poach Ryan Jones, Wynn's VP of nightlife.
Wynn Resorts' lawsuit also accuses Fontainebleau's General Counsel, Mike Pappas, of being "twisted involved in this interference." He supposedly did so by being "central in Fontainebleau's recent interference" and, after negotiating the previous lawsuit's settlement, tried to interfere again.
Wynn Resorts was granted a restraining order against further solicitation, but Fontainebleau allegedly responded by using a recruitment agency to hide their plans and claimed the employees they hired were to work at Fontainebleau's Miami location.
Aren't Non-compete Clauses Banned Already?
Just last month, the Federal Trade Commission (FTC) banned noncompete clauses in employee contracts across the US. They claimed it protects "the essential right of workers to switch jobs."
"Noncompete clauses keep wages down, stifle innovation, and deprive the American economy of vitality, including the more than 8,500 potential new enterprises that would be created every year if noncompetes were banned," said FTC Chair Lina M. Khan in a press release announcing the ruling.
Under the new FTC rule, no new noncompetes are binding, and existing ones are no longer enforceable for 99.25% of American workers.
However, existing noncompetes for senior executives, like the ones Wynn had obtained earlier, still remain enforceable.
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Source: www.casino.org
