Local labor battles rarely make the
national news any more, but this one did. In October, 1,400 hotel
workers in San Francisco staged a two-week strike against four
properties. The action followed weeks of tough negotiations between
Local 2 of the Unite Here union and the San Francisco
Multi-Employer Group, which represents 14 of the city’s largest
downtown meeting hotels, where labor contracts had expired on Aug.
14. Quickly, the SFMEG struck back by locking out 2,600 union
workers at the other 10 properties.
Other hot spots were erupting at about the same time. In Los
Angeles, where contracts expired on June 1 at nine major downtown
properties, a Labor Day protest march by workers and supporters
turned ugly, as confrontations with police resulted in 46 arrests.
Meanwhile, in Washington, D.C., where contracts at 29 hotels
expired on Sept. 15, negotiators for both sides remained
deadlocked, leading to workers voting overwhelmingly to authorize a
strike. And in Atlantic City, thousands of workers at seven casinos
walked off their jobs and onto the picket lines.
While some of the specific issues in each city differ, two
commonalities have emerged: The players at the bargaining tables
have evolved from their historic roles, and the stakes are higher
than before. Today, Unite Here, the New York City-based union
representing a wide cross section of hotel workers, has 440,000
members and an annual budget of $70 million, 40 percent of which is
earmarked for organizing. And for its part, the lodging industry
has matured from groups of individually owned properties into a
rarified strata of global corporations with portfolios of several
chains under one umbrella, in a business that grossed $12.8 billion
in pretax profits in 2003 and employs 1.7 million workers in the
All sides agree that how labor issues are handled this year
will affect how they play out in 2006, when contracts are set to
expire in Boston, Chicago, Honolulu, New York City and Toronto.
“The reality is that 2006 will be a watershed for collective
bargaining in the history of American lodging,” says John Wilhelm,
president, hospitality division, of Unite Here. “We have to find a
way to put this on a positive track. Without customers, the hotels
don’t have profits, and our members the employees don’t have jobs.
It is a recipe for disaster.” Not to mention a horrible bind for
planners trying to book meetings in advance.
New state of the unions
Unite Here was created this June from the merger of two
labor groups the Union of Needletrades, Industrial and Textile
Employees, and an amalgam called Hotel Employees and Restaurant
Employees, the “Unite” and “Here,” respectively, that comprise the
new union’s name. In a time when labor’s strength in general
appeared to be dwindling, due largely to the siphoning of
manufacturing jobs overseas, this marriage signaled a new way of
doing business, that of pooling members and financial resources
into a collective bargaining front.
“This is one of the leading unions today,” says professor Ruth
Milkman, director of the Institute of Industrial Relations at the
University of California at Los Angeles. “Their numbers are
growing, they know the industries they deal with and they have
hired people with a knowledge of business to help them.”
Strong organizing is the backbone of Here’s success; over the
past six years the union enrolled 6,000 to 12,000 new workers
annually, largely through a concerted strategy of reaching out to
the Latinos and Asians who have helped swell the ranks of hotel
workers. Such aggressive efforts will continue to make the expanded
union an increasingly powerful force, says Milkman.
In addition, Unite Here has formed strong strategic alliances.
At a Sept. 15 press conference in Washington, D.C., presidents
Kweisi Mfume of the Baltimore, Md.-based NAACP and Raul Yzaguirre
of the Washington, D.C.-based National Council of La Raza, the
country’s most prominent Hispanic-American advisory group, pledged
their support to the union.
Snagging the endorsements was an especially savvy move, says
Milkman. “It is a contest for public hearts and dollars,” she
notes. “And if the NAACP can steer business away from the hotels,
that helps the union. It is a growing union sophistication that is
playing out for the first time in the hospitality industry on a
Hotels: Help Us Contain Costs
As a percentage of hotel operating expenses,
labor costs come to about 45 percent and comprise “by far the single largest cost category in the hotel industry,” says Mark Woodworth, executive vice president for the lodging consulting firm PKF Consulting based in Atlanta. “It has a significant impact on profitability. We are projecting payroll costs to go up 5 percent in 2004. This is not a problem that is going to go away any time soon.”In San Francisco,
where strikes, pickets and lockouts were roiling the hospitality industry this autumn, the rising cost of health benefits was among the hot-button topics. The San Francisco Multi-Employer Group noted that member hotels were currently paying $650 per employee, per month, for health and welfare benefits, and that if current trends continued, the cost would rise to $1,200 per employee in five years. “We are not an unlimited resource,” said Matthew Adams (above), SFMEG vice president, in a New York Times
interview last month. “We’re simply looking for some level of employee participation.” - C.A.S.
Both sides dig in
While there are many issues at stake, the sticking point
has been Unite Here’s unilateral demand for two-year contracts,
rather than the longer terms of three to five years offered by the
hotels in the different cities. For their part, the hotels argue
the union’s larger agenda of setting itself up as a power
negotiator in 2006 is sabotaging the bargaining and is not in the
best interests of the workers.
On Sept. 24, hotels in Washington, D.C., which are offering a
three-year contract, along with the Washington, D.C.-based American
Hotel & Lodging Association, filed a complaint with the
National Labor Relations Board accusing the union of not bargaining
in good faith. “They are trying to negotiate on a national basis,”
says Joe McInerney, president and CEO of the AH&LA. “The union
wants this 2006 contract because their thinking is, if they struck
all of the hotels at one time, they will drive you to your knees.
Is that in the employees’ best interest? They may be union members,
but they also are hotel employees.”
John Wilhelm begs to differ. “We have never proposed a national
contract,” he maintains. “We do not believe that makes any sense.
But there definitely are issues that can be solved on a national
level.” Further, he says, Unite Here’s demand for a two-year
contract is a necessary strategic move designed to level the
playing field between the lodging industry and the union and give
the workers fair representation.
“These large hotel corporations that now dominate our industry
do not want a constructive partnership with their employees,”
Wilhelm charges. “After 9/11, they all began to complain they don’t
get recognition from the government for what they bring to the
economy. But take a look at their profits. This is going to play
out publicly, and it will only make the situation worse for
However, according to McInerney of the AH&LA, it is not so
much the hotel corporations the Starwoods, Hiltons, etc. that get
hurt by union action; it is the hotel owners the real-estate
investment trusts, banks and hospitality holding companies whose
bottom lines are affected most severely. “Most hotel companies
don’t own the hotels. They get a management fee and a percentage of
profits,” says McInerney. “It is the owners, and some are publicly
traded companies, who get hurt. They are the ones the union is
putting at risk.”
John Boardman, secretary treasurer for Local 25 of Unite Here
in Washington, D.C., disagrees. “Management companies are not in
business for altruistic reasons,” he says. “They have a vested
stake in the business. They make money from their management, and
if customers are disgruntled and the product is degraded, that
company’s brand is affected.” And, he adds, the union in
Washington, D.C., reached out to individual hotel owners, many of
whom were receptive to the union’s position and indicated they
would speak with their hotel management companies.
Workers: Eliminate Unpaid Work
As a service express associate
at the Westin Embassy Row in Washington, D.C., Serkalem Nessibu’s voice is what guests hear when they phone in a request. If they need a car, she calls the valet. If they need towels, she contacts housekeeping. “If guests need anything, we take care of them,” says Nessibu (right).While she’s been at the property
since 1988, Nessibu -- who moved to the United States from Ethiopia in 1979 -- feels the past few years have been very difficult. In order to cut costs, she says, management downsized the hotel staff and combined positions. The result? “There is a shortage in every department,” she says.“If a guest complains, I tell them I’ll try my best to take care of it right away.”Every eight-hour workday,
Nessibu is allotted a single 30-minute lunch break -- without pay. But when the hotel is busy, she says, managers often ask her to return to work, for which she says she is not paid. That’s why Nessibu’s union in October negotiated for pay when employees are summoned during lunch. The amount in Nessibu’s case would be $6.50, or half of her $13 hourly wage an issue that was unresolved as of press time. “We want to take care of guests,” says Nessibu, “but if we do that, we think the hotel should pay us.” - BRUCE MYINT
Issues that divide
Lower health-care costs, improved working conditions, better hourly
wages, secure pensions, dignity and respect all remain the core
demands of Unite Here at the bargaining tables. Taken at a glance,
such a wish list seems hardly different from what any worker, in
any industry, would present to an employer. Yet, in the
particularly labor-intensive hospitality business, where the rank
and file are overwhelmingly minorities and quality service is an
occupational necessity, some of the issues become more difficult to
" Affordable health care. In San Francisco,
the hotels initially proposed raising their employees’ monthly
out-of-pocket health-care expense from $10 to $273 over five years
(see “Hotels: Help Us Contain Costs” on page 65). “Do you know what
a housekeeper or a bellman makes?” asks Unite Here’s John Wilhelm.
“They can’t possibly afford that.” At press time, the hotels came
back with a plan that would cost single employees a maximum of just
$40 per month, with larger hikes for workers with dependents; the
union had yet to respond.
Meanwhile, Wilhelm has proposed a plan that would aggregate all
the hotel workers nationally and approach the health-care industry
with a demand for quality care at a reasonable price. “We would
have the market share to enforce such a request, but the hotels
have been opposed to considering it,” says Wilhelm.
Hotel representatives have been reluctant to talk to the press
about such matters. For example, “Hilton has a longstanding policy
of not commenting on labor issues, especially now, with pending
strikes and lockouts,” says Kathy Shephard, spokesperson for the
Beverly Hills, Calif.-based Hilton Hotels Corp.
" Fair representation. While the numbers of
workers for whom English is a second language has increased
significantly in the past decade, the number of those in a
management role has not, says John Boardman. And that, he adds,
creates an unfair situation, because some workers are unable to
fully comprehend what management is trying to tell them.
“We have asked that people’s language be acknowledged, and that
when an employee is being disciplined, a translator be made
available,” says Boardman. “We do not think that is an unreasonable
request, but the hotels say no.”
" Working conditions. The industry has bounced
back, occupancy levels are up, but hotels have not ramped up
staffing levels to meet demand, charges Unite Here. “The hotels
have made profits on the backs of their workers,” says Wilhelm.
“They have not hired commensurate with the rebound in business.
Instead, they have forced workers to increase their workload.”
In Washington, D.C., the half-hour unpaid lunch break has
become another flash point. The union is insisting that, especially
in the absence of payment, workers have the right to an
“When you have a few minutes at lunch, maybe to think about
or a problem at home, you don’t want somebody coming up to you to
tell you that as soon as you are finished eating, you need to help
set up three more tables in the banquet room,” says Boardman.
And if employees must work during their half-hour break, the
union says they should be paid for it. (See “Workers: Eliminate
On the other hand, says McInerney in response to this and other
complaints, “Look, in D.C. at the Marriott Wardman Park, 55 percent
of the employees have been there 10 years or longer. At the
Mayflower, 85 percent have been there 10 years or longer. If work
conditions are so bad, would they still be there?”
At least one labor dispute seemed to be resolved at press time,
as striking workers at 12 Atlantic City casinos reached a tentative
agreement with management. While union leaders had hoped for a
three-year contract, they accepted a five-year deal that grants a
combined 28.3 percent increase in salary, medical benefits and
pension contributions over five years and limits how many new
nonunion restaurants can open at the gaming properties, among other
Planners in the middle
This year, along with more aggressive negotiating tactics, Unite
Here tried a new strategy by taking its fight directly to meeting
planners. In September, after purchasing the mailing list of
Dallas-based Meeting Professionals International, the union sent
all of the association’s planner members a copy of its newly
created Hotel Labor Advisor Newsletter for Meeting Planners.
The twice-weekly newsletter provides details on upcoming
employee contract expirations at cities around the country, a list
of the hotels involved and the status of negotiations. In addition,
the publication offers planners a sample of force majeure language
to include in contracts with hotels and directs them to an online
version of the newsletter at www.hotellaboradvisor.info/meetings.asp.
While it remains to be seen whether Unite Here can effectively
get planners to take labor issues into consideration when placing
their business, at least one major piece of business already has
been lost due to the troubles in San Francisco. The American
Anthropological Society decided to move its annual conference from
that city to Atlanta, a move that will cost San Francisco an
estimated $3.2 million.
Indeed, tourism and convention-industry business is no trifling
matter, totaling an estimated $6 billion in San Francisco in 2003
alone, including about $138 million generated by hotel taxes. (“We
understand that the situation is leading some planners to
reconsider bringing their business here,” says Matthew Adams, vice
president of the hotels’ SFMEG. “This is why we need a contract
agreement that provides a long-term solution.”)
For John Stephens, executive director of the Washington, D.C.-based
American Studies Association, labor issues have set off alarms. The
board of the 6,000-member association consults the NAACP’s lodging
industry report card, which rates hotels based on several criteria,
including supplier and employee diversity. Now, says Stephens, the
board also will select hotels based on the information supplied by
Unite Here, a move that will help place an annual convention that
brings $800,000 to a host city.
“My organization is deeply concerned,” Stephens notes. “Our
members will not cross the picket line. Many of them are the
children of union members and were able to go to college because of
the benefits their parents attained from union membership.
“How negotiations are handled will have a definite effect on
where our members choose to do business,” adds Stephens. “They will
take into account what kinds of contracts workers get and use that
in determining where to go when they plan their own meetings.”
Amy Stark, director of meetings and events for the Bloomington,
Ind.-based Organization of American Historians, says she too is
concerned. Her board has mandated the group select only unionized
hotels for meetings. The OAH is slated to hold its annual meeting,
which typically draws 3,000, at the Hilton San Francisco next
March. “Our members will support the union, and we have been very
honest with the hotel about this,” says Stark, who added that at
press time the association was drafting a letter to Hilton
executives advising them of OAH’s support for the union cause.
“We haven’t come to the point of having to pull a meeting and
deal with the issue of possible attrition liability,” Stark notes.
“But for the next four years we are giving them our business, which
is valued at $300,000 a year.”
Other planners, like Karen Fricke, conference coordinator for
the Ann Arbor, Mich.-based Association for Asian Studies, say that
while the idea of meeting at a hotel under picket is worrisome, her
group will proceed rather than incur attrition costs. “We do not
have any formal policy on handling a strike,” says Fricke, whose
2006 annual meeting is slated for San Francisco that April. “And we
already have signed a contract, so we are going to be forced to
Planners who assume they can apply a force majeure clause to
protect themselves if they pull a meeting due to labor issues are
misguided and headed for trouble, warns David Scypinski, senior
vice president of industry relations for White Plains, N.Y.-based
Starwood Hotels & Resorts Worldwide Inc.
“You can’t just sit there and say people won’t cross the picket
lines, so we can’t come,” says Scypinski. “Unless it is impossible
to get to the hotel or for the hotel to perform, both parties must
abide by the contract.”