The battle over Atlantic City’s Trump Taj Mahal bankruptcy had quieted down in the last few weeks, but flared up again when the Taj’s owners asked a judge to penalize the city’s main casino union for sending “misleading” letters to Taj customers.
The casino’s owners say Local 54 of Unite Here is using federal labor law and the First Amendment to wage “economic warfare” against the casino.
A bankruptcy judge will consider Trump Entertainment Resorts request to force the union to acknowledge that letters it has sent to Taj Mahal customers asking them not to patronize the casino were misleading. Trump Entertainment wants the union to send out new communications saying that the previous letters were not accurate.
“If the union were calling people and saying Trump’s in bankruptcy, Trump isn’t paying its bills, we wouldn’t be here. The issue is taking the extra step and saying ‘you should take your business elsewhere,’” Trump Entertainment attorney Patrick Jackson said.
The company says that action violates basic bankruptcy protections that generally bar groups from interfering with a bankrupt company’s assets.
The union, however, says the letters are protected free speech and says labor law precedent under the Norris-LaGuardia Act bars the court from blocking publicity regarding a labor dispute.
The union sent out the letters early in the bankruptcy process and targeted groups that had booked—or were seeking to book—events at the casino. Some groups did cancel their events, according to the Associated Press.
Trump lawyers told the Judge Kevin Gross that business is improving at the casino, but is still being hurt by slumping convention sales, which it ties to the union’s letters.
Trump Entertainment said the union believes federal labor law and the First Amendment “provide it carte blanche to engage in economic warfare” against the casino in retaliation for a court-ordered cancellation of its union contract with the casino. “Federal labor law and the First Amendment provide no shelter for the union,” Trump Entertainment wrote in court filings.
Meanwhile, the union is still appealing the Gross’ previous ruling that cancelled that union contract with the casino as well as the casinos’ employee healthcare and pension plans.
Billionaire investor Carl Icahn is in the process of taking over Trump Entertainment by trading $286 million in debt he holds on the property for ownership-. He has also invested $20 million to keep the casino open, but has threatened to close the property if the previous union contract is reinstated.
