Union Organizing Trends In The Hospitality Industry | by Michael S. Mitchell
by Michael S. Mitchell, Fisher & Phillips LLP
There are major trends in union organizing across the nation, nowhere more evident than in the hotel industry. In this article we’ll look at some of these trends, provide practical guidance if you are expanding or buying new properties, and include some tips on keeping your property union-free. Trends In The Labor Movement... Generally For decades now, unions have faced declining memberships. Contrary to popular belief, union membership, even at its peak in the 1950’s, never reached even 50% of the workforce. Today the unionized percentage rate in the private sector is around 8%.
Trends In The Labor Movement Generally
For decades now, unions have faced declining memberships. Contrary to popular belief, union membership, even at its peak in the 1950’s, never reached even 50% of the workforce. Today the unionized percentage rate in the private sector is around 8%.
This has had an obvious negative impact on the power and financial clout of Big Labor, which derives income solely from the dues of members. Particularly hard hit have been unions in industries which are in decline such as steel and automakers. One of the few growth areas for unions is in government employment.
This trend in turn has led to mergers as unions struggle to survive. One of the most important mergers in this industry is between the Needle Trades Union (UNITE) and the Hotel and Restaurant Employees Union (HERE).
The overall decline in union membership, power and prestige, has not been at all uniform either geographically or in industries. While there have been a relatively small number of union elections in some states (the Dakotas, the Carolina’s, and several of the Mountain and Southern states), there have been a very large number of elections in states such as Washington, California and New York. In addition, the percentage of elections which unions win has been steadily increasing since 1998.
The hotel industry makes a particularly attractive target in today’s atmosphere, as it is a growth industry, it contains some jobs that are relatively low paying, and it is an industry which cannot be exported or handled offshore.
New Union Approaches
For many years, the major consortium of unions, the AFL-CIO, has attempted to counter these trends by putting more and more resources into political campaigns and other political activities. These have not always been successful in getting pro-union politicians elected, and even when that does occur, it does not always result in pro-union legislation.
Consequently, a major dispute developed among member unions of the AFL-CIO as to whether or not this was the right approach. Eventually, seven major unions, including UNITE HERE chose to defect from the AFL-CIO and form their own organization called “Change to Win.” The main goal of Change to Win is not political, but traditional – and not so traditional – union organizing efforts.
Labor Peace Agreements
The most successful tactics used in the Change to Win arsenals are the so-called Labor Peace Agreements, which come in a variety of permutations. In order to put these agreements in proper context, let’s compare them to traditional union organizing.
Unions traditionally organized employee workforces from the ground up. A several weeks long period of persuading employees to sign authorization cards, usually low key and sometimes secretive, would result in filing an election petition with the National Labor Relations Board (NLRB), the government agency in charge of labor management relations.
After a sometimes intense campaign in which both sides – the employer and the union – attempt to persuade employees to vote either for or against the union, an election is held via secret ballot. If the union persuades a majority of those voting to vote “yes,” the union then represents all of the employees in an appropriate bargaining unit, whether they had voted for or against the union.
This can be contrasted to the new effort by unions to try to organize companies from the top down. Unions pressure company ownership and management to agree to union demands before ever approaching employees. There are several variations on these so-called Labor Peace Agreements.
One type is called a Neutrality Agreement. In a Neutrality Agreement, the company agrees not to oppose future unionization efforts, either at a particular property, or perhaps nationwide. These Neutrality Agreements can be “strict,” requiring that the company: 1) do nothing at all during a union organizing campaign; 2) affirmatively allow union organizers access to the property; or 3) give union spokespeople a forum from which to persuade employees to support the union.
More limited Neutrality Agreements allow the company to: 1) express its opinion (if done in temperate terms); 2) correct any misstatements the union may make; 3) respond to union “provocations”; or 4) give union representatives equal time, i.e. if the company holds meetings with employees to present it views, a union spokesman will be present.
Some labor peace agreements go so far as to require the company to recognize the union on the basis of authorization cards alone. These are referred to as Card Check Agreements. There is no campaign and no secret ballot election.
Why Do Hotels Agree To Labor Peace Agreements?
In most situations, labor peace agreements grow out of collective bargaining at one location where the company is at an economic disadvantage. The union may have a credible threat of a strike, or may be seriously affecting the company’s business. In order to obtain a better relationship at the target location, the company agrees to some form of labor peace agreement at its other properties.
Many locations in the country (e.g. San Francisco, Chicago, New York) are much more pro-union than other parts of the country. There may be politicians at either the local or national level who are able to put pressure on employers to deal favorably with unions.
City councils often become useful tools for unions, and may pass local ordinances requiring employers who do business with the city, or who do business in a certain area of the city to recognize unions or deal favorably with them.
Some employers may actually seek out union assistance because of various business reasons. For example, unions are often able to steer major conventions toward or away from certain hotels based on their labor policies. Employers in the gaming industry may find certain localities overtly hostile to the opening of a new casino. Unions can often be helpful in overcoming this opposition by touting the number ofnew jobs that the casino will create.
Unions may offer direct financial assistance to certain properties, including in the area of financing new constructions. Loew’s New Orleans Hotel is a good example of this. American properties of foreign-owned corporations may sometimes receive pressure from the parent, in order for the parent to maintain good relations with its own union. Sodexho is a target of this tactic.
Or the company may fear a corporate campaign.
Corporate Campaigns
Corporate campaigns are another example of top down organizing when ground up organizing no longer is effective. Rather than persuading employees to sign authorization cards, unions persuade Boards of Directors and shareholders of major companies to adopt favorable policies towards unions in order to avoid negative publicity, boycotts, etc.
Unions may also put pressure on banks or lending institutions and other third parties who are friendly to it to either cease doing business with a particular hotel target or to persuade the hotel target to adopt union-friendly policies.
2006: The “Summer of Discontent”
Last year, UNITE HERE’s “Hotel Workers Rising” campaign was successful. Targeted hotels in Chicago, New York and San Francisco all ended up signing collective bargaining agreements, many of which contained labor peace requirements. The Chicago campaign was particularly successful and resulted in a Hilton-UNITE HERE “Partnership for Future Growth” agreement.
This agreement included:
- Card Check Agreements at other locations;
- Advancing labor peace in other cities with collective bargaining agreements;
- The Hilton receiving “preferred status” as a hotel management company of choice for the union and
- A commitment to mutually explore enhancing Hilton hotels productivity and competitiveness, especially in food service and restaurant sectors.
Other properties targeted during the “Summer Of Discontent” included the following:
Atlanta
Hotel Indigo Atlanta Midtown
InterContinental Buckhead
Boston
Hyatt Regency Boston Financial District
Hyatt Regency, Cambridge
Chicago
Four Seasons, Chicago
Intercontinental Hotel
Hartford
Downtown Hartford Marriott at Adriaens Landing
Honolulu
Turtle Bay Resort
Los Angeles
Glendale Hilton
Hyatt Regency Long Beach
Miami
Hotel Inter-Continental Miami
Hyatt Regency Miami
Monterey
Monterey Bay Travelodge (Fairgrounds)
San Francisco
Argent Hotel
Comfort Suites San Francisco Airport
Crowne Plaza Union Square
Fairmont San Francisco
Four Seasons San Francisco
Grand Hyatt
Hilton San Francisco
Holiday Inn Civic Center
Holiday Inn Express (FW)
Holiday Inn Fisherman’s Wharf
Hyatt Regency San Francisco
Mark Hopkins InterContinental
Omni San Francisco Hotel
Palace Hotel
Park Hyatt at Embarcadero Ctr
Location, Location, Location
When you consider expanding into new territory, remember that some states are more conducive to remaining union free. Know the difference between “right-to-work” and “employment at will.”
Don’t acquire new properties in the dark – get all the information you need. If the property is unionized, make sure you have copies not only of the collective bargaining agreements but side letters, white paper agreements to master contracts and past arbitration decisions. If the property is currently nonunion, what is the atmosphere at the property? Ask these kinds of questions:
- Have employees been transferred from a union facility to a nonunion facility recently?
- Is the prospect hotel operated on a union-free basis?
- Has the prospect opened new facilities in the last ten years that have remained union-free?
- Has there been union activity in the last five years?
- Does the property have sophisticated employer relations program?
- Does the prospect utilize external resources to remain union-free?
Remaining Union Free
It is possible to “union proof” your property to a great degree. By following a few simple pro-employee rules, carefully monitoring wages and benefits, aggressively dealing with safety issues, discrimination, favoritism and employee complaints, you will be able to demonstrate that a union is not needed at your property. Remember: it is far easier to prevent union organizing from getting started in the first place than it is to campaign against a union once organizing has started.
Mike Mitchell
+1 504.529.3830
HospitalityLawyer.com
