Background

Unionized workers represent the majority of employees in union hotels and convention centers across the United States. Most hotel employees are represented by UNITE/HERE though each city/local is different and many additional unions represent other hotel employees, such as engineers, plumbers & pipe fitters, painters, electricians, teamsters, etc. Some cities have a large number of unionized hotels and convention centers, such as San Francisco, Chicago, New York, Washington, D.C., Atlantic City, Las Vegas, Los Angeles, Pittsburgh and Philadelphia amongst others. On a few occasions in past years, unionized workers have struck hotels in cities like San Francisco with minimal inconvenience to individual guests and group business.

At issue today is the "potential" for unionized workers striking multiple hotels in multiple cities at the same time, and possibly as early as 2006.

The "issues" at Convention Centers are more work rule and cost related as opposed to contract issues, but also in some cases the large number of unions with jurisdictions in Convention Centers.

Scope of the Issue

• UNITE/HERE is currently without a contract in San Francisco and Los Angeles.
• Hotels want a long term agreement (5-6 years), while the union wants a two year contract (expiring in 2006).
• The union demand for a two year contract is meant to line up expiring contracts at the same time in multiple cities.
• Contracts in Chicago and New York expire in the summer of 2006.
• The unions say they want to be able to negotiate with national hotel chains on a national level.
• Hotels say that is not possible due to the large degree of differences from one city to another, like wages, work rules, cost of living, etc.
• Hotels believe the unions' objective is to put them in a position of power by the threat of a national strike if they don't get what they want.
• Potential ramifications to the convention market is if a multi-city strike were to occur. It would lessen the ability by national chains to shift workers to affected cities.
• At issue in all cities is health care. Currently, all union employees in Los Angeles get free health care with no deductible or co-pays.
• Associations with a large amount of membership that are sympathetic to union issues/causes can be dramatically affected financially if they are scheduled to meet in a city or hotel that is currently in contract negotiations with the union.
• Tactics used by the Union can be very damaging to groups. Unions have contacted speakers scheduled to be at conventions, sympathy strikes have been staged at hotels in cities that aren't even affected by current expired contracts.
• Convention Center work rules and costs associated with using centers that are unionized tend to be much more costly for groups than centers not unionized.
• Group contracts with hotels and convention centers just got a page longer as associations try to protect themselves from cancellations and/or loss of attendance due to potential union worker strikes.
• These issues have serious financial affects on Associations, hotels, employees, and local economies.

Attached is a copy of a press release issued by the Organization of American Historians regarding their decision to move their Annual Convention from San Francisco to San Jose.

Scenarios: Hotel's Point of View

The hotels currently involved in Los Angeles & San Francisco feel strongly that the National Union Headquarters of UNITE/HERE have an agenda that is detrimental to the industry, the economy and the members of their union. Their long-term goal is to bring all (or as many as possible) major union cities together on expiring contracts so they can potentially attempt to call a national strike/boycott to get what they want. (The position of the Los Angeles Hotel Council issued 4/14/05 as well as statements and articles relative to San Francisco are attached).

Major issues:

1. Length of contract
2. Healthcare Costs
3. Wage Increases

Both cities feel they have a very good and fair offer on the table right now that provides free healthcare and wage increases over a long term contract. The Union is rejecting this in favor of holding off until next year when more union contracts expire in other cities. Currently, there are NO negotiation dates set in either San Francisco or Los Angeles. The hotel community feels national contracts can not be accomplished due to the many different wage scales, costs of living that vary greatly from city to city. The bottom line from the hotel side is that there will be no winners when it's all said and done unless the union really cared about its members and sits down at the bargaining table now and works out a fair deal for both sides. Until that time, the union employees, their families and all involved and associated with the industry in LA and SFO and potential other cities in the near future will suffer greatly.

Scenerios: Association Meeting Planner Viewpoints

Associations vary in their concerns about having meetings in strike and boycott situations. For those with upcoming meetings, issues may include:

• Concern about service provision by hotel/facility
• Impact on attendance and membership
• Fear of attendee contact with strikers/picketers (from noise disruption to personal confrontation) Likelihood of sympathy strikes or walkouts by other unions
• How to balance member support for workers with organization's contractual commitments to hotel/facility
• How to balance contractual decisions and the organization's fiduciary obligations

Attendee responses range from (a) members who don't care about strikes or labor disputes and thus will attend a scheduled meeting to (z) those who care fiercely, will not attend the meeting, and will subsequently consider dropping membership if their association does not respond or act "appropriately."

Short Term Implications

The initial short-term step for an association is to identify the likely reactions of its membership/attendees regarding a strike/labor dispute situation. If attendees will still come to the meeting and stay in the contracted hotels, the planner should work with those facilities to outline back-up plans and communicate appropriate assurances about service provision, lack of noise disruption, etc., to the attendees.

If attendees will not come to the meeting site, or will not stay in hotels where strikes, labor disputes, or boycotts are occurring, the association must begin discussions of a different nature with the host facility. Depending on the facility and the group's history, it may be possible to develop a partnership approach to "reschedule" the meeting at a future date/time when the labor situation is resolved. This type of solution does require flexibility on both sides and an interest in the longer-term status of the relationship between the meeting sponsor and the facility.

A more standard outcome could be invocation of the cancellation clause and payment of the contractual penalty. An important accompanying decision would be whether relocating the meeting is an option or outright cancellation is required. Even if relocation is accomplished, the association must consider the likelihood that attendance will decrease, in part because people will be unwilling to change travel and vacation plans and in part because members may decide it is just too much fuss to deal with the situation and will opt to attend next year instead. Also, if the meeting is relocated into a right-to-work state and/or a non-union facility, members may dislike the relocation decision and choose not to attend in protest.

One disturbing challenge faced by leaders of associations whose members have pro-worker or pro-union attitudes is that the unions themselves are perfectly willing to use those groups as pawns in their negotiation struggles. Unions are identifying organizations with sympathetic members and targeting the meetings of those groups for boycotts. These organizations end up facing pressure from within AND without, and leaders are having a very difficult time finding any appropriate resolution to the dilemma.

Strategies for the Future

Organizations will have to take a look at their current practices and contracting processes and consider what changes are feasible. Options might include:

• Including union contract expiration dates as a factor in site selection. This would be particularly relevant for those organizations whose memberships are pro-union and/or pro-worker. Meeting planners would need to be aware that union presence within meeting facilities extends beyond hotel workers, however. On average there are 4-6 different unions involved in the production and servicing of a convention/meeting.
• Reducing the advance booking window. Organizations whose memberships are pro-worker may consider narrowing the booking window for their conventions/meetings. This could enable the group to ensure more adequately that no union contracts are up for renewal during their meeting dates, but it reduces site selection options to whatever cities/sites may still have open dates. This strategy is not feasible for some associations due to the size of their meetings/conventions.
• Developing a contract clause that addresses labor situations from the association's perspective. According to those giving advice in recent PCMA sessions on contracts, the standard force majeure clause in most contracts has been used primarily to address concerns of service provision for those groups that will meet during strike/labor dispute situations. Associations with members who will refuse to cross picket lines or stay in the host hotel need some other contract clause/provision to address this type of situation.
• Surveying the membership to find out how many will and will not attend meetings in strike situations. This information can be crucial to support an organization's decision-making process. However, issues like this can polarize the membership and potentially result in membership loss no matter what decision is taken by the association.
• Limiting the announcement of future sites and dates for conventions. Regardless of where their sympathies lie, organizations need to protect themselves a little better. Publishing the dates/locations of conventions for the next 4-5 years increases the likelihood of being targeted for boycotts or other labor situations.

PCMA members come from all segments of the industry. PCMA has to be careful to maintain an informed and balanced approach or risk losing members itself.

Attempts were made to get a statement from the Union, but were unsuccessful.

Next Steps

It would be problematic for PCMA to take a side in these labor disputes. However, PCMA, in coalition with other industry partners can provide to their members the honest and correct FACTS of the issues through numerous channels including an Industry Issues Forum.

PCMA should develop one central website/homepage that collects or identifies sources of statements from the various entities that intersect with labor disputes and their effect on meetings - a clearinghouse of information and background material on this topic. This resource could include links to statements from hotels, union websites, association press releases, as well as links to newspaper articles, etc. The initial compilation and subsequent maintenance of the page could be a research project for an intern (under appropriate supervision).

Hotel and Convention Center Union Influence Subgroup members:

Chair: Mike Ouimet, Director of Sales and Marketing, Wilshire Grand Los Angeles
Janet Astner: Meeting Services Director, American Sociological Association
Kristin Hankins: Global Accounts Director, Starwood Hotels & Resorts Worldwide
Florence Schrank: Senior Sales Manager, Crowne Plaza Hotel
Dennis Sullivan: Assistant General Manager, Freeman
Ellen Toups: President, Outsources, LLC

OAH Will Meet in San Jose for 2005 Annual Meeting

For Immediate Release
Tuesday, February 15, 2005

OAH's plans for its 2005 annual meeting in San Francisco have been complicated by the failure of the San Francisco Multi-Employer Group, an association of fourteen San Francisco hotels that includes the Hilton San Francisco, and UNITE HERE Local 2, the San Francisco hotel workers' union, to settle on the terms of a new contract. Local 2 led a brief strike last fall, followed by a longer lockout by the employers' association. A subsequent sixty-day cooling off period ended on January 23. No significant progress in talks between the union and employers' association have been reported. In the meantime, the Hilton San Francisco and thirteen other San Francisco hotels remain under boycott by UNITE HERE.

With no end to the impasse in sight, OAH faces the distinct possibility of a strike, lockout, or continued boycott at the Hilton San Francisco at the time of the 98th annual meeting.

Last week, the OAH executive office conducted an informal email survey of more than 900 convention participants and preregistrants. About three-quarters of the nearly five hundred respondents stated they would not cross a picket line of a hotel under strike or boycott.

Given this situation, including concerns about asking our members to cross a union picket line, the OAH executive board gave careful consideration to three alternatives: remaining at the Hilton San Francisco, moving to another location, and canceling the meeting entirely.

Should the OAH proceed with the convention at the Hilton San Francisco, the poll indicates that significant numbers of members would not cross a picket line. The organization could face losses of up to $412,000 in attrition charges (for sleeping rooms not rented) and $99,000 in revenue from registration fees.

Should the OAH cancel the convention entirely, it could lose in excess of $700,000 in revenue and penalties.

Moving to another location also would entail likely financial risks. After careful investigation over the last several months of possible alternative locations in the Bay Area, the only site that meets our needs is San Jose. Holding the meeting in San Jose could cost the OAH an unbudgeted expense of $60,000. In addition the organization would owe liquidated damages to the Hilton San Francisco of up to $390,000, which OAH is working to reduce or eliminate.

Given these alternatives, there is no clear choice based on finances. The board has reluctantly decided that its only viable alternative is to move the annual convention to San Jose. Registration, exhibits, and many of the sessions will be in the San Jose McEnery Convention Center. Additional meeting rooms as well as sleeping rooms are available in adjacent and nearby hotels. The hotel rooms are in union facilities that are not under boycott.

OAH will regularly update its web site with information on the meeting in San Jose. Information on San Jose hotel rooms will be available February 21. In the meantime, if you have already made plane reservations for San Francisco International Airport (SFO) you can still fly into that facility and take the shuttle to San Jose. If you have not made your plane reservations, you may wish to compare San Jose International Airport (SJC) and SFO rates before deciding which airport to use.

Meeting News Article

Don't Cross That Line: Tensions Rising As Hotel Labor Union Implores Planners To Boycott
by Rayna Katz

MARCH 07, 2005 -- Los Angeles -Tensions are escalating here and in San Francisco as hospitality workers union UNITE HERE - which has been involved in labor disputes with hotels in both cities since the fall - has met with some success in asking meeting planners to boycott the 24 hotels at issue.

Hoteliers as well as national and local meeting industry organizations are firing back, calling for an end to this tactic and resolution of the dispute, though they also are making contingency plans.

At least two large groups moved their meetings to other cities as a direct result of the union's boycott request.

The most recent departure, announced last month for a conference that would have put almost $2 million into San Francisco's coffers, appears to be the last straw for some local tourism officials.

"Now that we're losing bigger and more significant groups, and this has gone on for more than six months, I'm hoping we might be able to have the mayor mediate a discussion during which the doors are kept locked until a settlement is reached," said Mark Theis, vice president of conventions at the San Francisco Convention and Visitors Bureau. "No one should be allowed to leave until there's a handshake."

Still, girding itself for the worst, the bureau has contacted 50 large groups scheduled for meetings in the next five months to provide updates on the contract negotiations.

Hotel officials are trying to negotiate with groups that have canceled or those now on the fence as their meetings approach. I

n a show of support for the hotels, the three largest associations representing meeting planners - Meeting Professionals International, the Professional Convention Management Association and the American Society of Association Executives - released a joint statement that lashed out at UNITE HERE for its efforts to incite event cancellations.

Pulling Up Stakes

The Organization of American Historians last month decided to move its 2005 meeting, which starts on March 31, away from the Hilton San Francisco and head 40 miles south to San Jose. The hotel also lost the American Anthropological Association last fall when the group moved its meeting to Atlanta. The conventions, respectively, are estimated to have been worth $1.8 million and $3.5 million to the city.

Both groups moved after polling members that were registered for the meeting. For OAH, nearly three-fourths said they would not cross a picket line; at AAA, 56 percent wanted to move the meeting.

OAH is currently trying to negotiate with Hilton in lieu of paying cancellation damages, and both sides are trying to be flexible, according to Amy Stark, director of meetings.

"We're working with the hotel, and the people there and those at national sales have been understanding," she said. "We don't want to damage the relationship, as we do have future contracts with other Hiltons and, generally speaking, the company's hotels are a good fit for us."

In fact, one reason Stark settled on San Jose as the new site, she said, is that the city offers both a Hilton and a corporate-owned Doubletree, which is a Hilton brand. She signed on with both in the hopes it might bolster her stance in negotiations with the San Francisco property, but so far Hilton hasn't taken the bait.

Stark also is talking to Hilton personnel about possibly placing future meetings at the San Francisco property.

The anthropologists group, which was contracted to meet at the Atlanta Hilton next year, simply flipped its agreements, locking in San Francisco for 2006 "barring the occurrence of another labor dispute," said executive director Liz Brumfiel.

Hilton officials declined to comment, as did Hyatt Hotels, which has some properties involved in the labor disputes.

David Scypinski, senior vice president of industry relations at Starwood Hotels, which has two Westins in Los Angeles embroiled in the labor tussle, said the company has been "looking through and identifying groups that are most and least concerning and then putting a plan together." He said he too is interested in finding amicable solutions with groups. "Otherwise, you have to go to court or arbitration, and then it's a fistfight."

Starwood likely would consider resolutions such as the one reached by the anthropologists and Hilton, Scypinski said. "A flip-flop may not be the perfect solution, but it's better than losing the business altogether."

On the Soapbox

The statement from MPI, PCMA and ASAE said, "We do not condone UNITE HERE contacting meeting planners directly and asking them to boycott particular hotels either involved in ongoing labor negotiations or not at all involved but affiliated with certain major chains. As associations for the meetings industry, we condemn any effort to cause widespread disruption of the meetings business."

Responded UNITE HERE research analyst Jason Ortiz, "What we're trying to do is be an information clearinghouse for meeting planners because it's difficult for people to get information."

In a written statement the union responded, "We are surprised that after almost one full year of cooperation [by the union] with meeting planners, MPI, PCMA and ASAE have now decided to speak out against our outreach to meeting planners and group customers. Over the last few months, we have been inundated with hundreds of requests for information from planners and concerned conventioneers."

The statement also said, "MPI, PCMA and ASAE should be concerned over the aggressive tactics hotel operators in Los Angeles and San Francisco have engaged in with their customers over the past year. Threats of litigation against customers for hundreds of thousands if not millions of dollars over alleged breaches in attrition clauses and cancellation clauses are not a good way to foster healthy, long-term relationships with group customers and meeting planners."

Fred Muir, a spokesman for the Los Angeles Hotel Employer's Council, which represents the nine area hotels affected by the labor strife, said, "We urge the union to call off the boycott and focus its efforts on the negotiating table. The union representatives are spending a lot of time and effort on enforcing the boycott but are stalling and dragging their feet in the negotiations."

Union officials declined to respond to those statements.

News from the Los Angeles Hotel Employer's Council

CONTACT : Fred Muir (310) 278-9321

One Year Later, Hotel Employees Suffer From Union Tactics

Local 11 is harming employees by not reaching a contract and calling for a boycott that costs the city potentially millions in tax revenues

LOS ANGELES - April 14, 2005 - Union tactics have made thousands of Los Angeles hotel workers work without a contract for a full year, causing them to miss three pay raises, paid time off and other benefits.

UNITE HERE Local 11's boycott of area hotels is compounding the loss of pay raises by driving business away from Los Angeles hotels, costing employees untold thousands of dollars in lost work hours and tips.

"Our employees are suffering because of Local 11 leadership's scheme," said Brian Fitzgerald, president of the Los Angeles Hotel Employer's Council, a group of eight prominent areas hotels that are trying to sign union contracts.

"The national ambitions of union leadership are being paid for out of the pockets of our employees. This has got to stop." The Los Angeles Hotel Employer's Council has been negotiating with Local 11 since March of 2004. The contract ran out a month later on April 15, 2004. The union leadership's strategy to link its contract talks with those in cities such as New York and Chicago has unnecessarily prolonged negotiations in Los Angeles. Unfortunately, it appears that Local 11 wants hotel employees here in Los Angeles to sacrifice solely for issues that are important in cities elsewhere.

Respected community leaders including Cardinal Roger M. Mahony, Archbishop of the Archidiocese of Los Angles, have called for settlement talks to begin again in earnest, and a resolution to be achieved within weeks.

The Hotel Council agrees with Cardinal Mahony, and has pledged to do all it can to bring about a contract. But Local 11 has so far refused to change its adversarial and confrontational tactics. The hotels in the Council already offer the highest wages and best benefits of hotels in Los Angeles, and exceed those at hotels in many American cities. In these negotiations the Council has consistently proposed adding substantially to wages and benefits.

The Hotel Council has made a series of offers to the union that have included pay raises in excess of 20% over the term of a five-year contract. Under the original Hotel Council proposal made nearly a year ago, employees such as room attendants, cooks, dishwashing stewards, and other non-tipped employees would have received a retroactive increase for April 15, 2004, another pay hike in October 2004 and another raise this Friday, April 15 - the one-year anniversary of the contract expiration. The increases for these employees would have totaled 70¢ an hour.

The Hotel Council proposals have also consistently offered free healthcare over a long-term contract of five or six years - with no co-pays, deductibles or employee contributions of any kind, an extremely rare employee benefit in America.

The Hotel Council's original proposal also included:

• Paid vacation, paid holidays, paid bereavement leave and a new paid time off program. Employees also enjoy free meals in hotel cafeterias.
• Increases in the pension fund and continued hotel contributions to educational and other employee benefit funds.
• Retroactive pay increase.

Unfortunately, Local 11 rejected this offer and instead proposed a two-year agreement which would expire 12 months from now. Because of the union's response, as well as settlements the union has made for lesser amounts with other Los Angeles area hotels, the Hotel Council was forced to take retroactive pay increases off the table in its latest offer.

Local 11's bargaining stance is way out of the mainstream of its sister locals around the country. In the year since Local 11's contract expired, UNITE HERE locals across the country have settled multi-year contracts, often with terms that are not as good as those offered here in Los Angeles. During the past 12 months, UNITE HERE has settled three-year contracts in Washington, Atlantic City, and Philadelphia and Local 11 itself has even settled a five-year contract with the Pasadena Hilton.

The Wilshire Grand Hotel and Centre and the Millennium Biltmore Hotel in Downtown Los Angeles recently signed new six-year contracts with UNITE HERE Local 52 that guarantee union jobs in their hotel laundry operations for years to come. Last year the Service Employees International Union settled five-year contracts with Los Angles area hotels in just five bargaining sessions and with terms similar to those that the Hotel Council has offered to Local 11.

But Local 11 continues to insist on a short-term contract that would require the parties to start this process all over again in early 2006. The union also continues to push its boycott - a strategy not used by responsible union locals in other cities. The boycott is an irresponsible tactic that reduces work, wages and tips for employees, and saps the life out of the general economy. The ripple effect of tourist dollars in the Los Angeles economy is significant.

The loss of business due to the boycott is costing the City of Los Angeles potentially millions of dollars in lost hotel bed taxes, and that's the same as taking cops and fire fighters off our streets.

"Now we need Local 11 leadership to return to the bargaining table in a serious manner, in good faith and with the intent of settling this contract now in the best interests of our employees here in Los Angeles," said Fitzgerald.

"There are steps that could be taken right now," he added. "Local 11 could end its reckless boycott campaign. The boycott is taking a toll on employees, damaging the regional economy and having a severe impact on local tax revenues. If Local 11 is serious about reaching a contract in a timely manner it should end this practice as an acknowledgment that it is working hard to reach a contract settlement."

Local 11 is instead passing out information on its strike plans and calling for a contract that would expire in April 2006, just 12 months away, when this entire process would have to begin again.