There was a story out last month about Hyatt Hotels’ mistreatment of its housekeeping staff in three Boston hotels that I let pass due to the more engrossing health care reform debate. There was yet another editorial in todays paper, however, and so I thought it was time to take this issue on. For those who may have missed it (I don’t know how much play it got outside the northeast) this is how the story has been reported: on August 31 management at three Boston area Hyatt’s summarily fired 98 housekeepers and replaced them with employees from an outsourcing firm located in Georgia. The Hyatt housekeepers had been training “vacation and sick leave” replacements who turned out to be from the outplacement company HSS and those people were immediately installed in the new positions. That is to say, Hyatt had duped their employees into training their own replacements. The Hyatt housekeepers were non-union, earned between $14 and $16 per hour plus generous benefits, and some had worked at Hyatt for over 20 years. The HSS replacements would be paid roughly $8 per hour and receive no benefits thereby providing Hyatt substantial savings in an extremely difficult economic environment.

The response has been loud, active, and quite harmful to Hyatt. There have been mass demonstrations in front of the hotels (including out-of-state Hyatts), several major conferences have relocated meetings to other area hotels, the Boston taxi drivers have put Hyatt on notice that they will not provide service to or from hotels if they don’t address the housekeepers grievances, and the governor of Massachusetts threatened that state agencies would stop doing business with Hyatt. For a company in the hospitality business it’s hard to understand how Hyatt so badly misjudged the possible consequences of its actions. And it didn’t help one bit when Hyatt issued a statement including the following:

“We do not understand why the Governor is putting more Massachusetts jobs at risk instead of working with us to find jobs for employees affected by the realities of these unprecedented economic challenges,” the company said.

This is a hollow threat and it’s hard to believe the company’s public relations people would allow such stupidity to follow upon the stupidity of Hyatt’s actions. Whatever befalls Hyatt is well deserved for compounding a problem with irrational defenses. Like the many politicians and professional athletes who have been caught in some compromising situation, the best tactic if you know you’re guilty, is simply to fess up, fall on your sword, express deep regrets, offer appropriate restitution, and manage the consequences. Hyatt failed each step of the way until they finally realized the consequences of their error; but by then it was too late.

So that, as I said, was basically how the story had been reported and the editorial I read today tells much the same story. My problem with all of this is that, for some reason, I am meant to feel more sorry for the Hyatt housekeepers than I am for the millions of other Americans who have lost their jobs in the past two years. Hyatt disputed the media account of the incident (they claimed there was no Saturday night massacre, that HSS employees had been replacing Hyatt employees over the course of two years, that the HSS employees would receive benefits but not from Hyatt, and that the Hyatt employees would receive generous severance, counseling retraining, and health coverage through year end). I can’t find anything to substantiate Hyatt’s claim that there wasn’t a wholesale unannounced firing of 98 employees on August 31 effective immediately so that seemed to be a major corporate blunder. Clearly Hyatt acted in bad faith but I can’t dispute the economic logic of their actions. Why pay housekeepers $15/hour plus benefits when you can pay an outsourcing company $8/hr for the same work that has already proven effective over two years of testing? If that sounds callous, well it is. It’s also capitalism and sometimes the consequences suck.

There’s another problem with the media account and especially the one I read today: it’s wrong. On September 25th, a week after the story started hitting the national newspapers, Hyatt released the following statement:

“All housekeepers affected by August staff reductions at the three Hyatt hotels in Boston will be offered new full-time positions in the Boston market. The jobs, which will be provided by an affiliate of United Service Companies, will match the employees previous Hyatt rate of pay through the end of 2010. The Boston Hyatt hotles will extend health care coverage through March 31, 2010 for the employees who choose to accept positions with the United Service Companies, after which they will have the option to obtain health care benefits through their new employer.”

There’s more to the release but I think that section says it all. In one weeks time Hyatt recovered from its missteps and pro actively addressed the demands of the governor, the taxi drivers, etc. They canceled the outsourcing contract with HSS and established a new relationship with United Service that would include hiring the housekeepers at their previous pay though not necessarily at their previous jobs (United Service works with hotels, hospitals, and shopping centers). That’s a pretty good response if you ask me. What was the answer from the housekeepers? 77 of the 98 who were fired rejected the offer saying employment with an agency was unacceptable, demanded their old jobs back, and will accept nothing less. I don’t know the current state of demonstrations in Boston or elsewhere but it’s difficult for me to see what else Hyatt could have done. Assuming they’ve lived up to the promises of this press release the incident should be over. The housekeepers, like everyone else, have little job security and, much as I dislike unions, there are real advantages to union employees even as they can be a detriment to the economy (see UAW). It seems to me they have likely mistaken the strength of their position if they are persisting in their resistance. The offer is beyond generous and only due to Hyatt’s inexcusable handling of the situation. If they had handled it properly the women would be out of work even if they were feeling better about themselves and Hyatt. They are letting pride and arrogance interfere with good sense (probably helped along by union organizers who have supported the strikes). If there are any Bostonians out there I’d be interested to hear the latest intel.

Tags: Boston, Hyatt Hotel, Hyatt Housekeepers

This entry was posted on Monday, November 2nd, 2009 at 4:14 pm and is filed under News/Politics. You can follow any responses to this entry through the RSS 2.0 feed.