Hotels Move to Impose Latest Offer
The escalating power struggle between nine major Los Angeles-area hotels and their unionized workers took an aggressive turn Friday when the hotels announced they would start charging workers $10 a week for health insurance unless the union dropped demands for a two-year contract.
Attorneys for the Hotel Employees and Restaurant Employees International Union, which is seeking a two-year pact as part of a strategy to line up hotel contract expiration dates across the country for 2006, contended that the unilateral move was illegal because the parties were still bargaining.
The hotels, however, said that bargaining had hit a dead end and that they were now free to impose parts of their last contract offer, including the insurance payment.
Under federal labor law, employers can begin implementing parts of their final contract offer if the parties are clearly at an impasse. But that’s a subjective determination, which can long be tied up in appeals at the National Labor Relations Board.
As a practical matter, the NLRB cannot stop an employer from implementing part of the contract, even when the union complains, NLRB regional attorney William Pate said. But the hotels risk having to pay back all the added costs to workers, with interest, if the hotels lose the ruling later, Pate noted.
The insurance payments are due to start July 2, one day after union members gather for an advisory vote on the hotels’ last contract offer, which would extend the pact for five years. Union members are expected to reject the proposal.
“We hope [the insurance payments] will be manageable for all employees,” hotel attorney Lisa van Krieken said. “We also hope it will cause the union to think twice about its demands for a two-year agreement.”
Maria Elena Durazo, president of Local 11 of the hotel workers union, known as HERE, said the companies’ tactic was “a very dirty and inhumane way to try to leverage a settlement.”
“They are doing this deliberately to try to scare the workers into accepting what’s on the table,” she said, adding that the payments would be especially hard for banquet servers, housekeepers and other union employees whose work hours fluctuate with seasonal demands.
“That’s a lot of money for some people, and they might have to go out and get a second job,” said Penny Moore, a bartender at the Sheraton Universal and a union activist. She predicted that the move would backfire.
“It’s not going to scare anyone,” she said. “It’s just going to make us more angry.”
The union and hotels were in negotiations for three months but made little progress, deadlocking on the expiration date. The hotels, all part of national chains, want a lengthier contract, partly to ensure stability and also because they oppose the union’s long-range strategy, Van Krieken said.
HERE leaders want contracts in 10 U.S. cities, including Los Angeles, to expire in 2006, opening the possibility of a national strike and giving union negotiators in each city far more clout. Boston, Chicago and New York already have 2006 expiration dates.
Tensions have been rising for several weeks. On June 1, hotels stopped deducting union dues from paychecks and began distributing forms for workers to quit the union. In turn, the union staged dues-gathering protests inside the hotels, collecting hundreds of dollars in front of managers and the public.
The union also presented petitions supporting the 2006 expiration date and other union contract proposals with signatures from 75% of hotel workers, Durazo said. However, Van Krieken questioned the signatures and said at least one appeared twice.
The hotels employ close to 3,000 workers.
Union attorney Richard McKracken said he would file charges protesting the insurance fee with the National Labor Relations Board on Monday.
Because of its significance and size, the case would be a high priority, NLRB attorney Pate said. An investigation could wrap up in a few weeks, with the office clearing the hotels or filing a complaint. After that, however, appeals could tie up the process for several years.
The final ruling will hinge on whether the parties truly reached an impasse, Pate said.
If the hotels lose, McKracken said, they not only would have to return all the collected money with interest but also could be liable for medical costs incurred by workers who lost insurance as a result of the change.
“This is a huge gamble for them,” he said. “In the short run they can impose a lot of pain on the workers, but in the long run it may be their own pain.”
Van Krieken said there was no question about the issue. “As long as the union is stuck on two years, then we are at impasse,” she said.
The nine hotels -- Sheraton Universal, Westin Bonaventure, Westin Century Plaza, Hyatt Regency Los Angeles, Hyatt West Los Angeles, Millennium Biltmore, Regent Beverly Wilshire, St. Regis and Wilshire Grand -- are partners in an agreement that requires all of them to lock out union workers if the union strikes just one. The agreement also requires all nine to abide by an “offensive lockout” -- essentially a work stoppage imposed by employers -- if six are in favor.
The hotels’ pact does not contain a provision for sharing revenue during a disruption, unlike the mutual-aid pact used by supermarket chains to weather a strike and lockout in Southern and Central California that ended in February.