Negotiating Trust in the San Francisco Hotel Industry

The ANA, Four Seasons Clift, Fairmont, Grand Hyatt, Hyatt Regency, Holiday Inn Union Square, Holiday Inn Financial District, Holiday Inn Civic Center, Holiday Inn Fisherman's Wharf, Handlery, Westin St. Francis, and Sheraton Palace.

There was an explosion of hotel building in San Francisco and the United States in the 1970s and 1980s; and while San Francisco's Local 2 did organize the Parc 55, there were too many new hotels too fast during these years for the Culinary in San Francisco or other unionized cities to catch up. No major union hotel had decertified (i.e., rejected the union) in San Francisco because of the strength of Local 2 and the other unions, but many new ones had been built there and had not yet been organized. By 1994, San Francisco had about 20 luxury union hotels and about 7 new luxury non-union hotels.

This is a national trend. See “Union Soldiers,” Restaurant Business, November 20, 1994.

The Parc 55's contract contained the first successorship agreement in San Francisco in which the owners agreed that if they sold the hotel, they would retain the existing unionized workforce—which, as a practical matter, ensures that the hotel stays union. Most owners feel that this creates an impediment to sale, particularly if the other hotels in town do not have similar restrictions. The new Parc 55 contract also contained richer vacation, holiday, meals, and work-load provisions than in the other contracts in the city.

The Culinary leader in San Francisco was Sherri Chiesa. She had been the union president for ten years, was a strong and intelligent leader, knew the labor contract and the hotel industry well, and was well-respected by many of General Managers in town. A few months later, she decided not to run for re-election at the local and moved on to working for the International Union. She was succeeded by Casey Mike , a charismatic young leader who also had worked for the Farmworkers Union (as had much of the Local 2 staff at some point in their careers). A strong new leader, Casey also was willing to work constructively with the hotels for change, as long as the union played its proper role as the workers' representative and spokesman so that it could assure that the process served the workers' needs. He viewed the change as a way to redirect the union's resources towards organizing. The SEIU leader was Hipps Gerry , another constructive leader who would also soon retire. He was succeeded by Lim Greg , and intelligent young leader who was interested in change and creative ways of accomplishing it. The Engineers were headed by their long-time leader Art Viat, who had built one of the strongest unions in the country by focusing on training and education of his membership.

Our workforce is predominately immigrant, with English being a second language for most. To further complicate communications, our employees speak some 26 different languages, including Spanish, Cantonese, Vietnamese, Laotian, Cambodian, Tagalog, and Russian. The language and cultural differences make concepts such as teamwork, employee participation, advanced skills training, and promotion to higher-paying jobs extremely challenging, and massive amounts of training are needed to begin to address these issues.

Bluestone Barry Bluestone Irving , Negotiating the Future (New York, NY: Basic Books, 1992).

Schuster Jay R. Zingheim Patricia K. , The New Pay (New York, NY: Lexington Books, 1992).

Magma Copper implemented a cooperative program with its unions in its Arizona facility in 1989 following a history of recurrent and militant strikes. From 1989 on, Magma and its unions co-determined every aspect of its operations, including budgets, financing, and market strategy. Management and the unions stressed productivity by implementing gain-sharing programs in which approximately 16 percent, or one to two dollars per hour of each employee's pay, was at risk based on their performance, and then began more than 40 joint labor-management projects plant-wide to focus on work redesign, improved processes, and problem solving. By 1992, Magma had reduced its operating costs by $40 million and paid $19 million of it to the employees in gain-sharing pay. Production was up 56 percent from 1988, and the Arizona facility's underground mine operations had progressed from being the highest cost producer in Magma's operations worldwide in 1988 to its lowest cost producer, surpassing even its underground mine operations in Chile. The company's net debt went from $400 million in 1988 to $66 million in 1994, and investors' initial investments appreciated 400 percent in the period 1988 to 1994.

The ANA, Four Seasons Clift, Fairmont, Holiday Inn Union Square, Holiday Inn Fisherman's Wharf, Holiday Inn Financial District, Holiday Inn Civic Center, Grand Hyatt, Hyatt Regency, Westin St. Francis, Sheraton Palace, and the Handlery.

The low wage increases five years earlier were because most of the money the hotels paid under that previous contract in 1989 was dedicated to anticipated large health insurance increases. However, those increases had not materialized because of a responsible approach by the union trustees who refrained from trying to increase benefits in light of the hotel industry's deteriorating plight, and because the insurance carriers had held costs down in anticipation of national health insurance. These two factors had produced a very large surplus in the trust funds by 1994 of over twenty million dollars, which was to prove significant in the upcoming negotiations.

See the Los Angeles Times 's five-part series on the Caterpillar strike, beginning May 14, 1995.

One pilot project will reduce the number of job classifications in the kitchen and train employees there to perform several job functions. Such training would reduce monotony and make the employees less vulnerable to layoff in the event a dishwasher, for instance, who performs heavy physical labor, is injured and can no longer do heavy work. If he has also been trained to carve ice, or make sauces, he may be able to continue to work in this other capacity. In the Spring of 1995, a national restaurant chain, Elephant and Castle, joined the multi-employer group. This chain, HERE Local 2 and the Holiday Inn Union Square are presently working to make the restaurant pilot project a reality and shows that unionized restaurants in unionized hotels can compete against the non-union restaurant chains.

See “Hotel Workers Striking Mark Hopkins While Cooperation Marks Other Talks,” BNA Daily Labor Report No. 201, October 20, 1994.

The mission statement we created reads as follows:

It shall be the mission of the SF Hotels Multi-employer Group and the unions to create a new partnership in labor relations.

We are committed to jointly creating world class models in the hotel industry demonstrating that union-employer partnerships can achieve a truly successful competitive edge.

We share a commitment to superior guest satisfaction, economic prosperity, and real job security. We will achieve a competitive advantage and assure employment security by having a better trained workforce with lower turnover and higher morale. The hotels and the unions both recognize the inherent value of a unionized, highly productive, and truly participatory workforce.

Acknowledging that joint ownership of the process is necessary to ensure success of the parties, we will share all relevant information to foster better communication.

To accomplish this mission, we commit ourselves to openness, human dignity, courtesy, mutual respect, and an ever increasing level of trust.

Hilton, Stanford Court, Mark, Sheraton Wharf, Huntington, Miyako, Parc 55, Cathedral Hill, and (after it changed management companies) the Clift.

Carlton Ritz Nikko Pan Pacific Marriott Mandarin Hyatt Park Wharf Hyatt Fisherman's .

Our hotels employed approximately 3500 hotel workers. The Hilton Hotel is outside our group for personality reasons but follows our programs with its 1000 employees, so 4500 of the Culinary and SEIU's combined membership of about 9000 workers follow our programs exactly, i.e., about 50% of the unions' membership. Our group set the pattern for the major labor contracts, i.e., the Culinary, SEIU, and Engineers negotiated deals with us and then made the other hotels adopt them. The other eight unionized hotels outside our group may have approximately 3000 additional workers. The five major luxury non-union hotels may have approximately another 2000 workers. As discussed above, these new hotels had opened in a spurt of hotel growth in the 1970s and 1980s after years of non-growth and the unions had not yet been able to organize most of the new players, except the Parc 55.

See “Labor Management Committees Contained in HERE Contract with San Francisco Hotels,” BNA Daily Labor Report No. 178, September 16, 1994; “Hotel Workers Striking Mark Hopkins While Cooperation Marks Other Talks,” BNA Daily Labor Report No. 201, October 20, 1994; “San Francisco Hotel, Union Accord Cutting Grievance Costs, Forum Told,” BNA Daily Labor Report, March 17, 1994; “San Francisco Hotels, Unions Reach Agreement,” Hotel Business, 3/22 (November 21-December 6, 1994); “Union Soldiers,” Restaurant Business, November 20, 1994.