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Hotel Union Targets Trump Tower in Chicago

January 29, 2008
Related Topics: Labor Relations, Workforce Planning, Latest News
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When the first guests check into Donald Trump’s downtown Chicago hotel over the next few weeks, they could encounter an unexpected welcoming committee: pickets.

The celebrity New York developer is catching flak from a hotel workers union irked that he hasn’t signed an agreement allowing it to try to organize hourly employees at the 339-room inn. The hotel at 401 N. Wabash Avenue is set to open Wednesday, January 30, after a two-month delay.

“Right now, it’s just an open question whether they’re going to be a responsible corporate citizen,” said Annemarie Strassel, a spokeswoman for UNITE HERE Local 1, which represents about 6,500 Chicago-area hotel workers.

Whether the dispute erupts into a major showdown or ends quickly, it could be a sign of things to come as developers add thousands of hotel rooms to the downtown market during the next few years, attracting UNITE HERE organizers determined to sign up housekeepers, waiters and other employees at the new hotels. The union already has raised issues with other hotels in the works, including the 222-room Shangri-La on Wacker Drive, and one in the former IBM Building.

“Clearly, the growth in the number of hotel rooms in Chicago represents an opportunity for the union to grow their membership base as well,” said Robert Habeeb, president of First Hospitality Group Inc., a Rosemont, Illinois-based hotel manager and developer.

The Trump International Hotel & Tower offers both a high-profile target and an opportunity to bring 300 or more employees into the union fold. UNITE HERE wants Trump to approve a so-called neutrality agreement, which would permit organizers to try to persuade workers to sign cards supporting union representation.

An agreement would allow UNITE HERE to avoid a union election supervised by the National Labor Relations Board, an adversarial process with lower odds of union success.

Though the union and Trump executives began talks almost four years ago, negotiations stalled last fall, Strassel said. Trump executives wouldn’t agree to include food and beverage workers in the bargaining unit, a key union requirement, she said.

“That was not a place where we’d be willing to compromise,” she said. She doesn’t know how many food and beverage workers the hotel will employ.

Colm O’Callaghan, who was hired in November as the hotel’s vice president and managing director, said he “has heard nothing” about UNITE HERE’s interest in organizing workers there. Yet he’s not a fan of the idea.

“I don’t feel it’s necessary,” he said. “We put together a great benefit package” for the hotel’s employees.

Lars Negstad, Local 1’s research director, said O’Callaghan may be unaware of talks with the union because they were conducted with executives in New York before he joined the company. Calls to executives at the Trump Organization, including Donald Trump, were not returned. A spokeswoman for the Chicago project also did not return phone calls.

About 18,000, or 60 percent, of Chicago’s 30,000 hotel rooms are covered by a labor contract with UNITE HERE, which is low compared with a city like New York, where almost all the hotels are unionized. At the high end, where Trump will compete, the Ritz-Carlton and Park Hyatt are unionized, while the Four Seasons and Peninsula are not.

Given the high number of nonunion hotels, it makes sense for Trump to hold off on signing a neutrality agreement until the hotel is open, said David Sherwyn, a professor of law at Cornell University’s School of Hotel Administration.

“My guess is that he’d prefer not to have [a union], but he’ll work with it if he does,” he said.

Indeed, UNITE HERE’s Strassel said the union has “a history of cooperative relationships at Trump properties.” The union represents workers at Trump hotels in New York and Atlantic City, New Jersey.

That’s not stopping the union from cranking up the rhetoric against Trump in Chicago. Absent an agreement, the union plans to picket the hotel in the next few weeks, though Strassel wasn’t specific on the timing.

“We’re looking at this and wondering if this is going to be another Congress Hotel situation,” she said, referring to the nearly six-year strike at the hotel at 520 S. Michigan Avenue.

Local 1 is pressuring other hotel developers to sign neutrality agreements too. It already has an agreement covering workers at a 620-room JW Marriott hotel planned at 208 S. LaSalle Street. But the union has taken a confrontational approach against the developer of the Shangri-La Hotel, who so far has refused to sign an agreement.

In 2006, the union filed a complaint with the Illinois Securities Department alleging that the developer, Chicago-based Teng & Associates Inc., had violated state securities laws. A Teng executive did not return a call.

Union officials also have disrupted plans for a hotel in the former IBM Building by persuading the head of the City Council’s Landmarks Committee to block a landmark designation for the tower at 330 N. Wabash Avenue. The measure would qualify the project for a big tax break.

But Landmarks Chairman Anthony Beale says he won’t allow the proposal to pass out of committee until the hotel’s developer sits down with the union to negotiate an agreement. He is trying to schedule a meeting for later this week.

Filed by Alby Gallun of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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