Trouble in Beantown

by John B. Judis | September 29, 2009

A month-old labor dispute in Boston has taken a curious twist. It began when on August 31, a hundred housekeepers at three Hyatt hotels in Boston were fired and replaced by workers from a Georgia company, Hospitality Staffing Solutions. The housekeepers, some of whom had worked for Hyatt for over twenty years, were making between $14 and $16 an hour plus health, dental, and 401(k) benefits. Their replacements were to make $8 an hour with no health benefits. To make matters worse, Hyatt had earlier gotten the fired workers to train their replacements. Hyatt told them the workers would filling in for them during vacations. 

Hyatt’s move has drawn demonstrators and a threat by Massachusetts governor Deval Patrick to bar state employees from using the Hyatt for state business. In Chicago, the home of the Hyatt Corporation, hotel workers were arrested at a demonstration in front of the Park Hyatt; and one of the fired hotel workers flew to Chicago to appeal to Penny Pritzker, whose family owns the Hyatt Corporation and who was Barack Obama’s national finance chairman. Appealing to Penny Pritzker may seem like overkill, but wait.

Last week, the Hyatt Company announced that it had arranged with the Chicago-based United Services Cos. to offer temporary jobs to the fired housekeepers at their old pay. They wouldn’t get benefits, but Hyatt promised to pay their benefits until March. There was also no guarantee that they could keep their jobs with United Services. Who is United Services? If you are a very loyal reader of The New Republic, you will have heard of them before. I wrote about Richard Simon, the CEO of United Services, in an article seven year ago about the Teamsters in Las Vegas entitled “Dirty Deal.” I also referred to Simon in a short item I published last summer about a deal that Obama had reportedly made with the Teamsters to obtain their endorsement.

Simon was involved with Chicago Teamster officials in attempting to replace unionized Teamster workers at Las Vegas convention with low-wage employees. Here is what I wrote about Simon and United Services:

The Chicago-based United Service Companies provides nonunion workers at low hourly rates to trade shows and conventions. Known as a "labor broker" or "labor leaser," United makes money by paying its workers even less--sometimes near-minimum wage with no benefits--than it receives for their services. The company's founder, Ben Stein, described by one former acquaintance as a "colorful hood," was convicted of bribing union officials and, according to the IRB [the government-appointed Independent Review Board that monitors Teamster activities], "was reported to have ties to organized crime figures," including notorious Chicago Teamster Dominic Senese. After Stein's death in 1996, Richard Simon--who according to the IRB "also knew Senese well"--became United's president and ran the company along with Stein's daughter.

In 2000, Teamster president James Hoffa had hired former federal prosecutor Ed Stier to investigate corruption within the union. Stier objected to the connection of Teamster officials with Simon. Hoffa’s executive assistant Harlow Scalf told the IRB that Stier had warned him that his investigators “had reason to believe [Simon] was involved with some crime figures in Chicago, that he was a bad guy.”  When I asked Simon about Stier's charges, he said they were "false, misleading, and defaming." There is also no evidence that Simon did anything illegal in Las Vegas. But Simon's company was, to say the least, not acting in the interests of the workers who had made a decent living setting up and closing down Las Vegas conventions. So when the Hyatt Corporation offered their fired workers temporary jobs with Simon’s firm, Hyatt may not have been doing them much of a favor. But why get Penny Pritzker involved?

It’s likely that Pritzker knows Simon. She served with him on the Board of Directors of the Chicago Chamber of Commerce. She was also probably aware that on March 3, 2007, Simon gave $2300 to the Obama campaign. Large early donations like these rarely escape notice. So it is probably fair to say that in figuring out what to do about the hundred fired employees, the Hyatt Corporation didn’t pick United Services’s name out of a hat. 

Source URL: http://www.newrepublic.com//blog/the-plank/trouble-beantown