THE ABRUPT termination of 98 housekeepers at three Boston-area Hyatt hotels five years ago was a crude attempt to cut costs, but the decision also ended up sullying the hotels’ image. Hyatt Hotels Corp. finally moved to clean up that mess last week by agreeing to pay $1 million to the fired housekeepers and offering them hiring preference at future Hyatt-operated hotels. This peace offering, no doubt, can be seen in light of the company’s desire to operate a 1,000-room hotel at the Boston Convention & Exhibition Center in South Boston. Yet the agreement also contains a moral for bean counters: Gaining a reputation for mistreating workers carries its own cost.
Like other business sectors coping with the economic tailspin of 2009, the hospitality industry sought to reduce expenses by outsourcing jobs normally performed by staff employees. But Hyatt’s decision to bring in replacement housekeepers at roughly half the hourly wage appalled many outside observers — especially after the fired housekeepers reported that they had been duped by the hotel into training their replacements. (The company denied deceiving employees.)
It wouldn’t take long before local clergy, led by Rabbi Barbara Penzner of Temple Hillel B’nai Torah in West Roxbury, mobilized congregants and parishioners to support a boycott of the Hyatt Regency Boston, Hyatt Boston Harbor, and Hyatt Regency Cambridge. The fired housekeepers didn’t belong to a union. But they knew enough to seek help from Unite Here Local 26, which represents the area’s unionized hospitality workers. The savvy union kept the issue of the “Hyatt 100” in front of members of the public who felt increasingly worried about their own job security. Governor Patrick even threatened that state workers on official business would shun the Hyatt properties.
Local 26 estimates that the subsequent boycott cost the hotel chain about $6 million. But the greatest effect of the five-year-long campaign may have been in deterring other hotel companies from emulating Hyatt. If not for the courage of the Hyatt housekeepers to stand up for themselves, Boston might have seen a “wave” of similar firings, according to Local 26 president Brian Lang. Instead, executives at other nonunion hotels couldn’t help but take notice that they, too, would pay a steep price for treating employees unfairly.
Strictly speaking, the new agreement was voluntary; Hyatt was under no legal obligation to pay out anything, never mind $1 million to be split among the fired workers. Yet beyond any plans they may have for a convention center hotel, Hyatt executives also know that the agreement is sure to improve relationships with the labor-friendly administration of Boston Mayor Martin Walsh. There are lessons here for all sides: The episode is a cautionary tale for employers who treat employees as an easily replaceable commodity. And it’s a reminder to workers and consumers that they can affect a company’s conduct by speaking up.