Massachusetts governor threatens Hyatt boycott
(Crain's) — The governor of Massachusetts has threatened a state government boycott of Hyatt Hotels Corp. unless the Chicago-based hotel chain rehires about 100 Boston-area housekeepers who were fired in a cost-saving move and replaced by an outside cleaning firm.
In a letter Tuesday to Hyatt President and CEO Mark Hoplamazian, Gov. Deval Patrick said the fired workers at three Boston-area hotels should get their jobs back, adding to the political pressure on the company to reverse its decision.
Aiming to capitalize on the controversy as they negotiate a new labor contract in Chicago, union activists here plan to stage a "civil disobedience action" Thursday in front of the Michigan Avenue Park Hyatt that is to include some of the fired workers.
What Hyatt intended as a simple cost-saving move has turned into a major public relations problem, with a hotel workers' union holding a rally against Hyatt last week in Boston and several politicians calling for a boycott of the chain. Critics have lambasted Hyatt for terminating 98 housekeepers at the Boston-area hotels at the end of August and replacing them with lower-cost employees of Georgia-based Hospitality Staffing Solutions.
"In this economy, no business (or government, for that matter) is immune to these kinds of choices," Mr. Patrick wrote in his letter to the Hyatt CEO. "But surely there is some way to retain the jobs for your housekeeping staff, as the other hotels in the area have done, and to work with them to help the company meet its current challenges, rather than tossing them out unceremoniously to fend for themselves while the people they trained take their jobs at barely livable wages."
The governor asked Mr. Hoplamazian to reconsider the decision.
"Barring that, I will direct all state employees not to use Hyatt when traveling or for other purposes for the foreseeable future," he wrote.
In a statement, a Hyatt executive said the company "is disappointed" by the governor's decision, saying it "directly threatens" the 600 Hyatt employees in Massachusetts.
"We do not understand why the Governor is putting more Massachusetts jobs at risk instead of working with us to find jobs for employees affected by the realities of these unprecedented economic challenges," Phil Stamm, general manager of the Hyatt Regency Boston, said in the statement.
Hyatt, which is controlled by the billionaire Pritzker family, also said it has created a task force to support the workers who lost their jobs and provided them with extended medical coverage and retraining assistance.
Though the dispute is confined to the Boston area, it has provided more ammunition to union activists in Chicago, who plan a major protest Thursday afternoon outside the Park Hyatt at Chicago and Michigan avenues. Unite Here Local 1 is negotiating with downtown hotels over a new labor contract and has turned up its rhetoric in recent weeks, charging that the hotels are using the recession as an excuse to squeeze their workers.
Hotels here and nationwide have slashed expenses and cut jobs amid a recession that has pulled occupancies and room rates lower, sending many hotels into the red. Hyatt has become Local 1's top target because the chain is based here, has racked up big profits in recent years and has been especially tough on its employees, a union spokeswoman said. The Boston firings illustrate Hyatt's callous attitude toward its workers, she said.
"We feel like this company's really become an emblem of what companies are doing to take advantage of the moment and hurt working people," she said.
The 2,019-room Hyatt Regency Chicago, the city's biggest hotel, laid off 199 people, or 20% of its workforce, between November and March, the spokeswoman said, but had 46% of its remaining employees working overtime over roughly the same period. She said she didn't know if overtime hours had increased at the hotel since the job cuts.
In contract talks, Hyatt has also pressed for less generous health benefits and tougher eligibility requirements, she said. The union "is far from" a labor agreement with the major hotel companies. The prior three-year union contract, covering about 6,000 downtown workers, expired Aug. 31.
Talks are "moving along but moving with a rather slow pace," said Arnold Karr, a negotiator for the hotels and chief operating officer of the Hotel Employers Labor Relations Assn. "But nonetheless, we're still in productive talks and that's what counts."
He defended the job cuts at the Hyatt Regency, saying that "all the hotels have done some layoffs" in response to the recession. Overtime is not mandatory under the current labor contract, he said.
If union members "don't want to work, they don't have to work," he said.
Mr. Karr acknowledged that the hotel chains are seeking "adjustments" in the union health plan, which he said currently pays for 100% of workers' insurance premiums and doesn't require co-payments. The hotels want a less generous medical package for new hires, but aren't seeking changes for existing employees, he said.
"They're all looking for some way of heading off the horrendous cost of health care, and that's not different from any company in America today," he said.
A Hyatt spokeswoman declined to comment on the contract talks or the Thursday union demonstration.
Two of laid-off Boston housekeepers will speak at the Chicago rally, where the union expects about 200 protesters to be arrested. The spokeswoman declined to say what the protesters will do to prompt the arrests other than saying it would be non-violent.
