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Hotel Employers Conspire to Deny Permanent Jobs

Jenny Brown Jul 15, 2012

After four months as a temporary banquet server at the Sheraton in Indianapolis, Fernando Gomez asked his manager about working directly for the hotel. The manager told Gomez he couldn’t apply because “there’s a contract.”

The contract was not something Gomez had signed or even seen because it is an agreement between his temp agency employer, Hospitality Staffing Solutions, and the hotel, promising not to hire HSS workers.

The workers discovered that no Indianapolis hotel will hire them directly. “HSS has contracts with all the major hotels downtown, kind of like monopoly,” Gomez said. “We feel like we’re trapped.”

Denouncing the practice as a blacklist, a group of HSS workers and the hotel union UNITE HERE are pushing their city council to outlaw such “no-hire” agreements, and in January, 14 hotel workers sued the privately held Atlanta-based company, which operates in 70 cities.

They hope to make a class action suit on behalf of 3,000 affected Indiana workers. They also claim that HSS regularly stole their wages and estimate liability at $10 million.

Workers allege that HSS and hotel managers forced them to work through unpaid breaks, clocked them out before they stopped working, and forced them to come in early without clocking in. Sometimes workers discovered hours or days of work missing from their paychecks.

When confronted, managers claimed it would be corrected in the next check, but then it wasn’t. Workers compared notes and found widespread abuse.


The struggle over HSS comes as UNITE HERE attempts to get a foot in the door in Indianapolis, the largest U.S. city with no union hotels. Hyatt workers there requested representation in 2008 and have urged a boycott of their own workplace since 2010.

Their drive is part of the union’s national effort to get Hyatt to negotiate new agreements with its union hotels and to recognize unions in others if a majority say they want one. There are also union drives at two neighboring hotels.

The lawsuit has already had an impact, said Mike Biskar of UNITE HERE. Just two weeks after the workers sued, Hyatt dropped its contracts with HSS nationwide. The hotel chain didn’t hire workers directly, though. In Indianapolis managers brought in another staffing agency, Chicago-based United Services, which pays a bit more and doesn’t seem to have a no-hire agreement with the hotel.

It’s unclear how common it is for employers to collude to deny permanent work. Biskar said companies could well have similar arrangements in cities with no union presence, where it’s hard to monitor conditions. The union and several experts on employment law said no data exist.


Economists tell us that in a recession, employers favor temps because they’re unsure they’ll need permanent staff. But increasingly employers favor “permatemps,” said Cathy Ruckelshaus of the National Employment Law Project.

“It used to be they’d tell workers it’s ‘temp to permanent,’” Ruckelshaus said. “They don’t really say that anymore.”

Hotels have been particularly eager to shed staff and hire temps. In 2009, a Hyatt in Boston fired nearly 100 workers and replaced them with temps at half the pay and no benefits. Outrage at the firings led to a campaign for the “Hyatt 100” that still reverberates.

Hotel workers in Providence fought rampant temping at city-subsidized hotels by getting an ordinance passed that requires the hotels to pay current workers a severance package of six months’ pay and benefits if their jobs are outsourced. One hotel fought back by simply cutting current workers’ pay.

In cities with few or no union hotels, contract workers likely outnumber permanent staff, according to UNITE HERE. If you work for a hotel in downtown Indianapolis, there’s a roughly 3 in 4 chance you work through a temp agency, Biskar said.

“At Marriot, every housekeeper, every houseman, every cook, everyone in the back of the hotel, even supervisors were from HSS,” Gomez said. At Hyatt the workforce has been about half and half, say union organizers.

However, “temporary” is the wrong word, workers say. Those who sued had worked for HSS as long as eight years.

HSS doesn’t say “temporary,” either. Instead it promotes what it calls continuity (“The same trained associates show up to work at their assigned hotels each day,” says the company website). And it promises to save hotel owners 12 percent on average in labor costs, a nasty boast to hotel workers who said the agency didn’t pay them at all for up to 20 hours of work a week.

Housekeeper Olivia Estevez, who asked that her real name not be used, spent 11 years working at the Indianapolis Marriott through HSS.

Marriot gave her workloads of 38 to 40 rooms a day, she said. In contrast, union hotel contracts stipulate closer to 13-16 rooms. When she was unable to complete her work within her regular hours, she was told to keep working but wasn’t paid for the extra hours.

When she asked for a raise after a decade of work, she was granted $8.88 per hour, but she was then quickly transferred to another hotel and dumped back down to the federal minimum of $7.25.

Tired of the enormous workloads and low pay, she tried to apply directly at a new JW Marriot. “The lady asked if I worked in another place,” Estevez said. “She told me that I had to get out of HSS and wait one year so I could apply at the hotel.”

If a worker complains, Gomez said, “they intimidate you by saying there’s a stack of applications at their desk. They say if you don’t like it you can always quit and go somewhere else.” But you can’t.

The bad conditions endured by temps drive everyone’s working conditions down, organizers say, because permanent workers worry their positions may be made temporary in an instant. That makes it doubly hard to organize permanent staff, while agency workers who speak up can be easily canned. After HSS saw Gomez’s name on the lawsuit, the agency cut his hours and eventually stopped calling him for work, he said.


While the lawsuit grinds through the courts, HSS workers and UNITE HERE have asked the city council to ban the blacklisting.

According to the union, $60 million in public funds subsidized construction of the 1,000-room hotel where Estevez applied. Public officials justified the handout by saying it would create jobs.

Under the union’s proposal, hotels would not get a license from the city if they enter no-hire agreements with staffing companies, Biskar said. Activists are optimistic that the measure will pass, but the mayor may veto it.

This article was originally published by Labor Notes.


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