Labor Woes in San Francisco and Chicago

A march downtown by 1,400 hospitality workers in July signaled possible further labor unrest at hotels in San Francisco unless the sides reached an agreement in talks that were scheduled through mid-August.

The July 27 march came amid resumed contract talks between the union and the San Francisco Multi-Employer Group (SFMEG), which represents 13 major hotels. Other hotels are certain to follow SFMEG's lead.

The conflict, punctuated by a strike, a lockout, and picketing at hotels, has cost the city's hospitality industry millions of dollars in lost meetings. Signs of worker discontent had abated in recent months, so the prospect of workers once again picketing outside hotels pose a renewed threat.

"Anything that impacts our guests and employees is a concern," says SFMEG spokesman Noah Griffin. "But all we can do is negotiate in good faith."

Local 2 originally sought a 2006 contract expiration to coincide with contract expirations in seven of the largest convention cities in North America, thereby giving UNITE HERE greater negotiating leverage with the big hotel companies. Local 2 now seeks a 2009 contract expiration to coincide with expirations in other cities. SFMEG has proposed a five-year deal.

Mike Casey, president of UNITE HERE Local 2, which represents some 9,000 employees at more than 60 area hotels who have been working without a contract since August 2004, says a variety of issues separate the two sides, not just length of contract. "It's still a cheap contract," he says. "We feel they can afford a lot better than what they're offering."

But Griffin says that hoteliers offered a generous wage-and-benefits package and that the real sticking point centers on the union's organizing efforts.

UNITE HERE favors card-check neutrality, in which the union tries to get workers at individual hotels to sign cards expressing their interest in joining the union, and hotel management agrees not to be involved in the process. If a majority of workers approve, then the hotel must accept unionization. By contrast, hoteliers generally support a secret ballot.

Possible labor conflict also looms in Chicago. UNITE HERE Local 1, representing 7,000 workers whose contracts expired August 31, announced in July a decision to negotiate separate deals with both Hilton Hotels Corp. and Global Hyatt Corp. The union also is negotiating separately with the Sheraton Chicago, representing the area's Starwood hotels, and with yet another group of seven hotels. In all, 26 Chicago-area hotels hold labor contracts that expire this month.

Local 1 charges that Hilton and Hyatt, as a way to pay lower-than-union wages, outsourced work that its members should perform. The union won an arbitration proceeding against Hilton, but the company has not rectified the situation, claims Local 1 spokesman Lars Negstad. "Other hotels have more cooperative relations with us."

John Mazzoni, Hilton's VP of national labor relations, says he believed the arbitration is being settled properly. "We have good relations with our workers," Mazzoni says. "Team-member surveys bear that out."

Hyatt was not available by presstime to comment. —Marshall Krantz

Unite Here has previously singled out Hilton in what appears a national strategy. In New York City, for example, the local hotel workers' council and Hilton properties agreed to a contract on July 29, nearly a month after the council and 126 other hotels inked a deal. This is the first time the union has singled out Hyatt.

Local 1's targeting of Hilton seems at odds with a five-year cooperative agreement between national Unite Here and Hilton, announced in conjunction with the New York deal. The parties agreed to "work together toward labor peace," according to a joint statement, and the union agreed to confer upon Hilton "preferred status as a hotel management company of choice."