Hotel Labor Pains Continue

The contentious dispute between hotel management and union labor has become more controversial over what some industry groups, including the Convention Industry Council, say are the union's “unfair and illegal tactics” to influence meeting planners to boycott hotels.

Since the dispute began last fall, the union has been reaching out to meeting planners to inform them of the situation through phone calls and a Web site ( [3]). “We've tried as hard as we can to speak to issues that are important to meeting planners and get that information out to folks quickly,” says Jason Ortiz, research analyst at Unite Here, the union that represents hotel employees. This includes letting them know about cancellation clauses, giving updates on the issues and tips on how to handle labor disputes, and providing information about the potential for labor activity in the form of picketing, boycotts, or strikes.

But Mary Power, president of the CIC, says there is a fine line between informing planners about the situation and the potential of picketing and threatening them that picketing will occur if they don't move or cancel their meeting. “They can picket the hotel, that's not a problem, but if they do anything that would threaten [to create] problems, then it becomes a secondary boycott,” says Power. Because CIC had received calls that the latter had occurred, the organization decided to issue a statement condemning the practice.

The Professional Convention Management Association, Meeting Professionals International, and the American Society of Association Executives have also spoken out against any efforts to cause disruption of meetings. “We were not pleased to see the direction that some of the approaches were going,” says Deborah Sexton, president and CEO of PCMA. “A lot of stories were coming out of the San Francisco marketplace about threats to disrupt the meetings, and we do not feel that that is an appropriate approach.”

Are You Covered?

Despite the uncertainties surrounding the hotel labor situation, there are precautions and steps that planners can take.

First, there is the matter of hotel contracts. Strikes, threats of strikes, even picketing are covered in force majeure clauses, but there has to be a reason to exercise the clause to cancel the meeting, say legal experts. If performance is not an impossibility, the clause may be challenged by the hotel if it states that the defense to performance is limited to “impossibility” and does not provide for the defense of commercial “impracticability.”

With regard to hotel cancellation clauses, planners should review contracts carefully with legal counsel to ensure maximum protection in the event of cancellation. Also, contracts should require hoteliers to provide a reasonable estimate of the actual damages the hotel will suffer if the group cancels.

Strikes and threats of strikes are also covered in cancellation insurance. However, coverage is not available if the buyer knows that the strike is coming.

In the request-for-proposal process, planners should ask pointed questions about labor unions at hotels, says Tim Brown, partner, Meeting Sites Resource, Irvine, Calif. His company has a Web-based RFP system where customers can enquire whether the hotel is unionized and when the contracts expire. Knowing when contracts are up for renewal may allay fears.

Planners are also advised to be proactive in communicating with the hotel and the union to get specific information on how the meeting might be affected. Also, planners should work with the hotel to find out how it can accommodate the group if there is a disruption. “Even if there is a labor action, we'll be able to provide them with the service they're accustomed to receiving,” says Joe McInerney, president of the American Hotel & Lodging Association.

Convention and visitors bureaus are quite knowledgeable about the labor environment in a given city, so they may be able to provide valuable advice and resources. If circumstances should dictate that you cannot hold a meeting at a particular hotel, ask the hotel about moving the meeting to another property within the chain. Meeting professionals can also exert pressure by making their concerns known to CVBs, local government officials, hotel owners and management companies, unions, and industry associations. Labor is a hot topic among industry organizations, so stay tuned for informational forums and white papers.

If unwanted solicitations come from union representatives, CIC recommends that planners take notes and get the contact information from the caller and forward the information to management or counsel.

Finally, don't avoid cities that have new contracts due in 2006, advises Sexton. “Planners have to continue to make decisions that are good for their organizations, understanding that they may have to make last-minute adjustments.”