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In the wake of economic challenges facing hotel owners, operators and lenders (low occupancy and room rates, high carrying costs, defaults of loans financed or refinanced during the peak of the 2005-2007 market peak), the collective bargaining agreement with Local 2, UNITE HERE, covering the majority of hotel workers in San Francisco, expired in August 2009 and negotiations have commenced for a new contract. The key issue in the negotiations is healthcare costs and benefits, due to the dramatic increases in healthcare costs over the past few years as well as anticipated increases in the future – and disputes over who will bear these increased costs.
There are many stakeholders in the negotiations: last year approximately 16.4 million visitors to San Francisco spent an estimated $8.5 billion, contributing over $527 million annually in hotel taxes and fees to San Francisco's local government. Recent developments that have occurred away from the bargaining table could well affect what transpires between Local 2 and the hotels.
At issue are the heated disputes between labor groups. The first development concerns the internecine warfare between UNITE HERE and the Service Employees International Union (SEIU). By way of background, in 2004, UNITE HERE was formed when the Union of Needletrades, Industrial and Textile Employees (UNITE), a union consisting of mainly textile, clothing, apparel and commercial laundry workers, merged with HERE, the long-standing Hotel Employees and Restaurant Employees union. At the time, UNITE HERE affiliated with the AFL-CIO. However, in 2005, in a much publicized dispute, UNITE HERE severed ties with the AFL-CIO and joined with several other unions – namely, the SEIU, Teamsters, Laborers, Carpenters, Food and Commercial Workers, and United Farmworkers – to form a new labor organization, the Change to Win coalition.
The Change to Win coalition did not last. By March 2009, UNITE had bolted from UNITE HERE to form a rival union, Workers United, and under that mantle affiliated with the SEIU. The split between the two unions broke wide open when UNITE HERE announced its decision to seek re-affiliation with the AFL-CIO. In its public statement, UNITE HERE declared that it "will disaffiliate from Change to Win given SEIU's brazen interference in UNITE HERE's affairs and its intrusion on UNITE HERE's industry jurisdiction." UNITE disputed this accusation by claiming it had the support of the rank-and-file membership. On Sept. 17, 2009, John Wilhelm, President of the Hospitality Division of UNITE HERE, stated upon rejoining the AFL-CIO, "Our 265,000 members belong in the House of Labor."
Wilhelm's enthusiasm over the remarriage of UNITE HERE and the AFL-CIO did little to mask the ongoing dispute between his union and the SEIU. Since the March 2009 announcement, the dispute has captured the attention of labor leaders and union members alike with many concerned that it is a threat to the stability and membership of both unions. The two unions have traded acerbic charges, with UNITE HERE accusing the SEIU of raiding its members and treasury, and the SEIU accusing UNITE HERE of undemocratic tactics in preventing the SEIU from organizing. Meanwhile, numerous unfair labor practices and union representation petitions, including competing claims over the right to represent the constituent workers along with employer decertification or jurisdiction petitions, are pending with the regional office of the National Labor Relations Board (NLRB). In an unusual public release, on June 18, 2009, the Office of the General Counsel of the NLRB issued guidelines in order to promote consistency in the way that the General Counsel's office will handle these proceedings.
Commentators and other union leaders have uniformly noted that this dispute has caused a major schism in the labor movement, which could not have occurred at a more critical time with a variety of national union goals at stake, including the passage of some form of the Employee Free Choice Act, which would allow workers to organize strictly on the basis of a card check and not secret ballot election and would enhance the use of neutrality agreements. Some supporters of the labor movement have urged the two unions to resolve their differences. In an open letter dated July 17, 2009, Janet Murguia, President and CEO of the National Council of La Raza, urged the two leaders to set aside their differences. Others have taken sides. In a resolution dated April 6, 2009, the San Francisco Labor Council condemned the "intervention in the internal concerns of UNITE HERE by [SEIU] President Andy Stern and top SEIU leadership, and their actions designed to attack and weaken UNITE HERE." The resolution demanded that the SEIU "cease all actions and/or support in raids in gaming, hotel and food service bargaining units and publicly acknowledge UNITE HERE's organizing jurisdiction in these areas across North America." On June 22, 2009, the State Building and Construction Trades Council of California, AFL-CIO, passed a similar resolution.
The hospitality industry is not immune from these labor disputes.
On July 16, 2009, in a publicized letter, John Wilhelm accused the SEIU of engaging in various acts affecting its progress in organizing the hospitality industry, including filing of competing representation election petitions at the El San Juan Hotel and Casino, totaling 400 workers in Puerto Rico; contesting the results of a card check at the new San Antonio Hyatt Hotel; interfering with a card check neutrality agreement for a casino at Presque Isle Downs in Erie, Pennsylvania; and engaging in a raid of sister bargaining units in Detroit, including the newly organized Westin Book Cadillac Hotel. Meanwhile, UNITE HERE has scored recent victories against SEIU membership bids in Philadelphia and St. Louis. Local 2's support of the National Union of Health Care Workers (NUHW), a rival union of the SEIU, which sought to organize hospital service workers on SEIU's turf, has stirred the hostility between the two unions.
Despite its strength in numbers, almost 9,000 workers, this ongoing dispute between UNITE HERE and Local 2 could well influence Local 2's bargaining goals and the tactics it uses to achieve them.
The other development affecting this round of negotiations is the fact that Local 2 and the hotels are engaged in single-employer, as contrasted with multi-employer, collective bargaining. It is settled under the National Labor Relations Act that different employers can voluntarily band together and bargain collectively through a joint representative, and be bound by the contract that is negotiated by their multi-employer unit. Exacting rules under the Act, which are aimed at preventing the destabilization of the bargaining process, require that for single-employer bargaining to occur after multi-employer bargaining has been the tradition, either party to the contract, union or employer, must give unequivocal notice of its intention not to bargain in a multi-employer group before the commencement of negotiations. After the commencement of negotiations, withdrawal from multi-employer bargaining can only occur with the "mutual consent" of all parties.
Single-employer bargaining with Local 2 is a departure from the multi-employer bargaining that started in 1989 and continued with renewed vigor in 1994 when 11 major hotels formed the San Francisco Hotels Multiemployer Group (SFMEG). Contracts were negotiated through multi-employer bargaining in 1994, 1999 and 2004. However, the last contract was forged in 2006 after almost two years of labor strife, a lengthy strike and a 53-day lockout by management of the hotels that were not hit directly by strike activity. Then, the Regional Office of the National Labor Relations Board rejected unfair labor practice charges filed by SFMEG (and its counterpart, the Los Angeles Hotel Employers Council) to challenge UNITE HERE's bargaining strategy to establish a two-year contract term. At the same time, unfair labor practices against SFMEG challenging the lockout were dismissed. The legality of the lockout itself was not challenged, as it has long been held that a lockout is a legitimate response to a "whipsaw" strike where the union tries to gain an advantage by targeting only some of the members of a multi-employer bargaining group. Significantly, the continuing lockout after Local 2 ostensibly made an unconditional offer to return to work was determined to be lawful, where it was found that Local 2 had not provided blanket assurances it would not randomly strike again and SFMEG had a legitimate interest in protecting its business and ability to operate.
For this current round of collective bargaining, negotiations are occurring separately between Local 2 and each hotel group. This was highlighted recently when Local 2, which obtained strike authorization on Oct. 22, 2009, in a lopsided vote (though it is reported that only about a third of the workers participated in the strike vote), called a three-day strike starting November 5 against the Grand Hyatt Hotel in support of the union's demands related to healthcare costs. When the strike ended at the Grand Hyatt, Local 2 launched a strike on November 10 at another single hotel group.
The advent of single-employer bargaining is a development that creates its own set of dynamics for the parties in negotiations, in terms of the decision by the union to engage in strike action, the decision to lockout by a single employer and the extent to which employer interests can be coordinated. Further guidance on this issue may be provided in the future by the 9th Circuit Court of Appeals, which recently heard oral argument in a case challenging certain coordinated action by grocery stores in response to the strike they faced in 2004 in Southern California.
The current issues posed to all of the interests in the hospitality industry are demanding. Clearly, given the economic climate, the competing demands on Local 2 regarding its dispute with the SEIU and the different negotiating process for the hotels, the collective bargaining negotiations are taking place in a challenging environment for both Local 2 and the hotel employers.
This article is part two of three that was published in the San Francisco Daily Journal and the Los Angeles Daily Journal on November 13, 2009. Reprinted and posted with the permission of Daily Journal Corp. (2009).
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