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Unions Draw Ire of Hotel Owners

Will the proposed Employee Free Choice Act destroy the hotel industry's profitability by driving up workers' wages, as some owners argue? Or will it level the playing field between labor and management, as unions claim? Those are just two questions on the table as the opposing camps clash over the legislation.

The most contentious provision in the legislation — called “card check” — allows union certification at a workplace if more than 50% of workers sign union cards. That could replace the current method of secret ballot elections.

“That's where I have real concerns,” says Tony Mangano, owner of the 150-room Ramada Syracuse in Syracuse, N.Y. An adjunct professor at Syracuse University, Mangano also is a union member. “The union process at Syracuse University was done by secret ballot. Card check would take away that privacy.”

Fast track to unionization?

Under current law, an employer can demand a secret-ballot union election. The Employee Free Choice Act would allow unions to be certified, if a majority of workers have signed union cards and there's no evidence of employee coercion. Lodging industry advocates say that would result in fewer secret-ballot elections.

“This legislation would have a devastating impact on the industry,” says Marlene Colucci, executive vice president for public policy at the American Hotel and Lodging Association, a trade group in Washington, D.C. “You'd have an automatic increase in unionization because you're rewriting the rule book and making it so easy to unionize.” That, she says, could damage profitability of hotels because of higher employee wages.

Union advocates admit the law would result in higher pay for the industry's 1.8 million workers who aren't already unionized. “The pay and benefits of hotel workers covered by union contract is much better than for non-union workers,” says Stewart Acuff, assistant to the president at the AFL-CIO, a national federation of unions in Washington, D.C.

Unions deny, however, that would destroy hotel profitability. “Look at cities — Chicago, Las Vegas, New York, San Francisco — where hotel workers generally work under union contract,” says Acuff. “All have very healthy hotels that make a lot of money.”

Hotels remain profitable, according to PKF Consulting in Atlanta, but their rate of growth has declined. The historical industry average for hotel profit growth has been 4.7%, but was 13.3% in 2006 and 7.2% in 2007. PKF forecasts a drop to 2.9% in 2008.

Colucci also says allowing workers to simply sign a union card to gauge whether they want to unionize impedes employers' ability to make their case to employees. “The law currently has a set of election procedures that allow the union and the employer to present their case. Then employees go into a voting booth in private and say ‘yes’ or ‘no,’ ” Colucci says. “After you educate employees on both sides of the issue, in about 50 percent of the cases they don't vote for a union.”

Union advocates counter that the concept of a private ballot as sacrosanct in union elections is a myth. “Union elections have no similarity to our civic and political elections in American public life,” says Acuff of the AFL-CIO. “There's intimidation, retaliation, and firings, so the current election system meets no standard for free and fair elections. Opponents are imposing a standard that doesn't exist with a secret ballot.”

Acuff also dismisses the argument that employers won't have a chance to make their case to employees. “That's the most condescending and contemptuous argument I've heard,” he says. “Employers have a lot more time to communicate with employees than unions. When workers sign cards, they know full well what they're doing.”

Elections matter

In March, the Employee Free Choice Act passed largely by a party-line vote of 241-185 in the Democratically controlled House. In June, however, Republicans filibustered the Senate version. “Basically, the legislation is dead for this Congress,” says Colucci. “But it's the first thing at the top of the labor agenda.”

“There are no likely scenarios under which this bill will pass if Republican Sen. John McCain is elected president. He's said he would veto it,” says Acuff. “We're working very hard to elect Democratic Sen. Barack Obama, who supports this bill, and as close to a filibuster-proof majority in the Senate. If there's a filibuster-proof majority, we think it will pass.”

G.M. Filisko is a reporter and attorney based in Chicago who writes regularly on legal and real estate issues. You can contact her at [email protected].


In the U.S., there were 354,000 leisure and hospitality workers represented by unions in 2007, accounting for just 3.2% of all unionized workers. That's down slightly from 370,000 in 2006.

Unionized All Unionized U.S. Workers U.S. Lodging Workers
2006 10.5 million 370, 000
2007 11 million 354,000
Source: U.S. Bureau of Labor Statistics
TAGS: News Hotel
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