Boston’s Hyatt Hotels: Not Much Hospitality Toward Their Own Workers

On ongoing labor story here in Boston underscores why jobs and employment must remain one of our highest political, economic, and policy priorities.  It involves three Hyatt hotels whose management abruptly terminated some 100 housekeeping workers after having them train replacement workers from a Georgia-based contracting company.  The workers claim they were deceived into thinking they were training vacation fill-ins.

As reported last week in the Boston Globe:

When the housekeepers at the three Hyatt hotels in the Boston area were asked to train some new workers, they said they were told the trainees would be filling in during vacations.

On Aug. 31, staffers learned the full story: None of them would be making the beds and cleaning the showers any longer. All of them were losing their jobs. The trainees, it turns out, were employees of a Georgia company, Hospitality Staffing Solutions, who were replacing them that day.

Labor advocates and elected officials have responded with dismay and outrage, and with good reason.  Hyatt employees with 20 years service were making a modest wage of a little over $13/hour plus benefits, which based on a full-time work week adds up to annual earnings of around $26,000.  Their replacements will earn about $8/hour, which leads to annual earnings of around $17,000.  Hyatt, in effect, has eliminated 100 jobs that pay barely a living wage and replaced them with jobs that pay less than subsistence wages in an expensive metro area like Boston.

In response to the growing firestorm, the Hyatt Corporation said that it is setting up a task force to help the terminated workers find employment and extending their health benefits to the end of the year.  This strikes me as being too little, too late, and a shallow attempt to look better in the public eye.

Contracting has become a common form of replacing full-time employees, and at times, economic necessity may require changes in staffing arrangements.  But one has to wonder about the social responsibility and ethics of a major corporation that deems loyal 20-year employees earning $26,000 “too expensive.”  And if the allegations about deceiving their workers into training their replacements are true, then we can only wonder if they have any decency.

On a broader scale, this disturbing situation raises at least three questions that are front and center when we consider jobs and employment:

1.  How can we create an economy that delivers a living wage for all who work to support themselves and their families?

2.  The Hyatt workers were not unionized.  How can we encourage unionization as one path toward safeguarding America’s workers from this type of sudden, devastating job loss?

3.  How can we ensure a viable safety net of health care benefits, transitional income replacement, and placement assistance for those who have lost their jobs?

[Friday a.m., Sept. 25 update — I am out of town right now and can provide only a brief update, but this situation is becoming a symbol for workers and the labor movement.  Boston’s taxi drivers union has announced a boycott of the city’s Hyatt hotels unless they rehire the terminated housekeepers.  As the comment from my brother Jeff indicates, this has led to labor protests in Chicago as well.  The Hyatt Corporation has reiterated its commitment to treating workers fairly and has denied deceiving the housekeepers who lost their jobs.  Here’s a link to the Boston Globe’s coverage of the story:  http://www.boston.com/business/ticker/2009/09/hyatt_protests.html.]

[Friday p.m., Sept. 25 update — This story keeps developing.  According to the Boston Globe:

Hyatt Hotels Inc. responded today to public outcry and calls for a boycott of the hotel chain, saying it would offer housekeepers it fired new jobs through an outside staffing agency or retraining programs.

Company officials said the 98 housekeepers — who were fired last month and replaced by employees of a staffing agency — would be offered jobs in the Boston area through United Service Companies — an outsourcing firm — at other hotels in the city. Hyatt does not plan to rehire them to work at its own hotels, it said.

It’s still not a good situation for the workers who lost their jobs.  Although the details are unsettled, it appears they will have no guarantees of continued employment at their current pay rates — which weren’t very high to begin with — beyond 2010.  This is costing Hyatt money and a ton of bad press, but the workers themselves are still facing uncertainty and disruption in their lives.]

[New Dec. 15 post updating the controversy: https://newworkplace.wordpress.com/2009/12/15/hyatt-hotels-sometimes-cruelty-comes-at-a-cost/]