Hotels Withdraw From Contract Negotiations With Union

Staff Reporter

A consortium of L.A.'s largest hotels, claiming that union negotiators are intentionally stalling contract talks, has moved to terminate the extension of an existing contract, effective June 2.

The action by the Los Angeles Hotel Employers Council came after it presented the Hotel Employees and Restaurant Employees Union with a revised economic proposal. The union has yet to submit its proposal.

Negotiations began more than two months ago for a new contract to replace the six-year agreement that expired April 15. Although the 4,000 workers will continue to receive the same pay and benefits under the old contract, the hotels' action potentially sets the stage for a lockout.

The length of the next contract is a major stumbling block, with the union demanding a two-year deal and the hotels insisting on five years.

While both sides maintain that the hotels' action would not result in a strike, there are signs that negotiations could drag on for months.

"They have no intention of reaching an agreement until later this summer or early fall, coinciding with the expiration of the San Francisco and Washington, D.C. (HERE) contracts," said Ken Ballard, a partner with Ballard Rosenberg Golper & Savitt LLP, which is one of the council's lead negotiators. "I've never seen a negotiation go like this."

HERE officials acknowledge that the union's strategy is to position Local 11's new contract with those in nine other cities so they all expire in 2006. Since the hotel industry consists of national and international chains, the union wants to enhance its power by bargaining as a national unit.

But it denies waiting for the San Francisco and Washington D.C. contracts to expire (in mid-August and early September, respectively).

"If they were to give us a good contract tomorrow with decent improvements for the workers and a 2006 expiration, then we would be ready to sign," said Maria Elena Durazo, president of HERE Local 11. "Our goal is not to strike. We are trying very seriously to negotiate a settlement, not to end up on the streets."

She gave no indication when the union will make its wage proposal.

The council's latest proposal calls for non-tipped employees to get hourly increases of 45 cents this year, 40 cents in the second, third and fourth years and 50 cents in the final year. Tipped employees would get an increase of 10 cents per year, unless the minimum wage rate increases by a higher amount during a given year.

"This proposal that we just made is very similar in economic terms to what just ended in the six-year agreement," said Ballard.

A sticking point is management's demand that workers begin paying for a portion of their health care premiums. The council wants employees to pay weekly sums of $5 for singles, $10 for a single plus one family member and $15 for full family coverage.

HERE also wants more hours for its members housekeepers in particular so that staff won't have to carry such a heavy workload.

The hotels have significantly cut employees' hours since the Sept. 11, 2001 terrorist attacks took a huge bite out of the industry, which only recently has shown signs of a recovery.

"The proposal for the pay hikes if that were the only issue would be fine," said Durazo. "The problem is that on the other hand they proposed that the workers pay for health insurance and that the plan be redesigned with lesser benefits."

The council includes the Century Plaza, Hyatt Regency Los Angeles, Millennium Biltmore, Park Hyatt Los Angeles at Century City, Regent Beverly Wilshire, Sheraton Universal, St. Regis, Westin Bonaventure and Wilshire Grand hotels.

Eight other hotels have signed "me-too" agreements with the union, which means they will abide by the terms of the ratified contract.

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