To paraphrase Yogi Berra, it's starting to look like déjà vu all over again. Picket lines are being organized in San Francisco and Los Angeles. Attendees are being asked to boycott union hotels. Can slow-downs and strikes be far away?
The shadows of labor unrest have started to lengthen again as a series of agreements, forged during difficult contract negotiations between hotels and hospitality workers' union Unite Here from 2003 to 2007, expire in major convention cities around the country.
Contracts ended in San Francisco and Chicago last August, in Los Angeles last November and in Toronto in January. The Minneapolis agreement is up at the end of this month; Vancouver, B.C., and Honolulu expire in June; Monterey, Calif., ends in August, and Washington, D.C., in September. While some negotiations have taken place, the two sides are, for the most part, barely communicating, and their positions are disturbingly far apart.
On the table Wages and benefits, of course, are the main negotiating points in each contract go-round. Starwood Hotels & Resorts, for instance, has proposed a lump-sum cash bonus to union members for the first two years of a new contract, followed by a 3 percent wage increase in year three and a
4 percent increase in year four.
But the real sticking point this time -- as evidenced so far in Chicago, Los Angeles and San Francisco -- is the rising cost of health care, creating a contentious stalemate.
"All of the hotel chains want and need to provide health care for our workers," says Doug Patrick, senior vice president of human resources, North America, for Hyatt Corp. "What doesn't get discussed are the specifics. In Chicago, for example, if an employee works one hour per month, that employee is entitled to full health-care coverage for that month. We're trying to continue to provide coverage for those individuals who are full-time, while trying to find ways to reduce unnecessary expenses."
Patrick is frustrated by Unite Here's response throughout the country. "There is no tolerance for change, or what they call takeaways," he says. "What they would like to see is only enhancements to the agreements."
The union, however, maintains it has been reasonable. "We're willing to take smaller wage increases in order to maintain affordable health care," says a spokesperson for Local 11 in Los Angeles. "We get caught up in this idea that workers get free health care, but we negotiate so that they don't have to pay [medical expenses] out-of-pocket."
The spokesperson notes that part of the workers' compensation is allocated to health-care coverage. For example: A housekeeper might make $16 per hour in wages, but $3 from that goes to the health-care plan. The union could negotiate higher wages, the spokesperson adds, without raising the amount going to health care, "but then workers would have to pay more out-of-pocket for care, and they'd be subjected to those costs going up more significantly over the course of the contract [when insurance companies raise rates]."
In most cities, union workers are offered several health plans, with the high number of members in the pool allowing Unite Here to bargain for decent premiums with the insurance companies.
But rates are rising. In San Francisco, for example, Kaiser Permanente is the insurer for the majority of hotel workers. "This year, there is an increased cost of 5 percent from Kaiser," notes Mike Casey, president of Local 2 in San Francisco. "Right now there are no employers who are paying that increase."
Extra monies for such contingencies are coming from a Taft-Hartley fund that is paid into by both the workers and the hotels. But the hotels would like to dip into that fund even further to help offset health-care costs, according to Richard Curiale, managing partner of Curiale, Hirschefeld, Kramer LLP, the chief negotiator for Starwood Hotels in San Francisco. It's an idea that doesn't sit well with Casey, who would prefer the fund be saved for acute emergencies.
Also playing into the health-care debate is the question of overwork, which can lead to more on-the-job injuries. In Chicago, "staffing has dropped dramatically over the years," says a spokesperson for Local 1. "That intensified over the peak years of the recession. Members are doing the work of two people with no end in sight."
As an example, Local 1 points to the Hyatt Regency Chicago, where almost 20 percent of the workers were laid off from November 2008 to March 2009, while 46 percent of its staff worked overtime between January and April 2009. While Hyatt acknowledges the layoffs and the overtime, Patrick notes, "At all times, we are committed to the safety of our employees. During the time in question, we saw a decline in the number of injuries."
"We are seeing proposals in the three cities that are looking for permanent concessions, using the temporary climate, bad as it was, as the rationale," says Courtney Alexander, deputy director for research with a focus on hotels for the national office of Unite Here. She adds that the hotels, while telling stockholders that recovery is just around the corner, are stalling raises and cutting health care, asking workers to pay long-term even though they've been required to work so much harder over the past few years.