Hospitality Industry Insurance Issues: Santa Cruz Hotel Owners Negotiate Successful Contract With Union Employees Saving Substantial Benefits And Expenses

 In negotiating the new contract the owners and operator initially hoped to slash more than $500,000 from their operating costs; the union, meanwhile, sought to guard employees’ insurance, eight-hour workday and paid vacation.

“It was very, very challenging because the owners were spending more than a million dollars a year in benefits,” says Jane Howard, Chief People Officer for Joie de Vivre Hospitality. “We needed to work together to get the cost of that down some, and we were able to do that.” The hotel ultimately accepted an insurance plan proposed by the labor union that is expected to save it $130,000 annually.

The owners and operators of Santa Cruz’s Dream Inn can rest easy now that the unionized employees at the hotel have finally ratified a contract following nearly a year of negotiations and union demonstrations. The employees, represented by UNITE HERE Local 483, voted to accept a new four-year contract last Tuesday, Nov. 30. 

The Dream Inn is jointly owned by the Southern California real estate developer Ensemble Investments and AEW Capital Management and operated by Joie de Vivre Hospitality, which manages a number of other properties around the state.

The final agreement, which will allow employees to keep their insurance and eight-hour work day but not their paid vacation time, was reached in arbitration with an outside mediator that took place at the hotel on Nov. 23. A week later, the employees voted with a 91 percent majority to accept the contract; had they failed to ratify, the union would have moved to strike.

“I think we made some progress,” Michael Roberts, a bartender at the Dream Inn’s Aquarius restaurant, said. “We definitely got a reasonable contract, but for me, a lot of it came down to the fact that I didn’t feel like the membership would have supported a strike if it came down to that. They were willing to do certain actions, but I don’t think a strike would have been supported.”

The new contract covers 85 workers at the hotel, who, under its terms, will keep a generous benefits package that includes health, dental, vision and life insurance—all free—for the employee’s entire family. “It was very, very challenging because the owners were spending more than a million dollars a year in benefits,” says Jane Howard, Chief People Officer for Joie de Vivre Hospitality. “We needed to work together to get the cost of that down some, and we were able to do that.” The hotel ultimately accepted an insurance plan proposed by the labor union that is expected to save it $130,000 annually.

The insurance policy was ultimately the most important factor for Roberts, although he sympathized with longtime employees who, under the new contract, will lose paid vacation time accrued over many years of service. “I’ve only worked there for three and a half years, but we have employees who have worked there for almost 20 years who are taking hits for vacation—like losing a week or more days—so it was a very big deal for them.”

“That was painful for us, we really didn’t want to have to move on vacation,” says Lizzie Keegan, a representative for UNITE HERE who was present throughout negotiations. “There were some things that obviously stung a little bit, but overall we ratified with over that 90 percent because everybody feels that, in this economic recession, we will have to [make some concessions] and it will be hard, but we’re really proud that we have really good insurance and it covers us and covers our families.”

For more:  http://news.santacruz.com/2010/12/07/dream_inn_hotel_workers_keep_bennies