By Dana Wise, Director of Corporate Engagement at UNITE HERE

During the worst surge of COVID-19, workers at Baltimore’s Marriott Waterfront Hotel ratified a first union contract with the largest hotel operator in the world. What drove the victory was a two-year effort by an alliance of workers, the hotel workers’ union, and investors persuading the hotel owner, UBS, to engage on what Marriott, the hotel operator, was doing inside the hotel.

This is the story of how the Baltimore hotel workers and their allies changed the behavior of the Swiss banking giant UBS, overcame Marriott’s anti-union bias, and won basic job protections, a voice at work, and a chance to share in the success of the hotel when business returns to normal.

The Baltimore Waterfront Marriott is operated day-to-day by Marriott, but the hotel is owned by a group with the largest stake held by UBS through its Trumbull Property Fund.

UBS has a management agreement with Marriott to operate the hotel. We haven’t seen that management agreement, but a typical hotel agreement involves the owner paying an operator such as Marriott to run the hotel and employ the workforce, with management and the owners splitting the profits. Management agreements often require the operator to consult with the owner on policy concerning management, general overall operating procedures, economics and other matters affecting the operation of the hotel.

In the summer of 2018, the Baltimore hotel employees asked Marriott and UBS to agree to a fair process to let them organize and bargain collectively. Marriott refused the request. UBS washed its hands, saying Marriott was wholly responsible. The labour dispute escalated.

UBS’s response was surprising given the institution’s marketing as a responsible investor, its glowing ESG reports, and its extensive business ties to pension plans. UBS had adopted a Responsible Contractor Policy (RCP), at the urging of building trades unions, but bizarrely argued that the responsible contractor policy did not apply to the Baltimore hotel since the employees were hired by a contractor. UBS officials wrote, “Since none of the employees impacted are employees of UBS Realty, but, instead are employees of property managers or other third parties, UBS Realty is not in a position to impose neutrality on those parties.”

Meanwhile, the labour dispute escalated. Marriott fired a union leader who was a ten-year hotel employee. UBS responded to investors’ inquiries stating, “Marriott confirmed that this case was handled consistently with similar cases that have occurred over the years.” In a January 1, 2019 response to a union survey of labour policies and practices governing its real estate investments, UBS reported that neither it nor its operators had any labour disputes. It was as if UBS was pretending the Baltimore labour dispute didn’t exist.

In 2019, in the face of an anti-union campaign, a majority of the hotel’s food and beverage employees voted in favor of forming a union in a federally mandated election. Yet they still faced an uphill battle to get a first contract.

Investors stepped up their engagement, challenging UBS to live up to its policies by pointing out the gap between UBS’s policy and what was happening in the hotel. The Global Unions Committee on Workers’ Capital, the international network of worker-nominated pension trustees, set up a meeting between UBS pension fund clients from around the globe and the asset manager’s ESG team at the 2019 PRI conference and asked why the Baltimore labor dispute wasn’t in the UBS reports. As part of the Asset Manager Accountability Initiative on Workers’ Rights in Investment Stewardship, the CWC works with its global network to drive positive impacts to workers’ rights on the ground, in line with the ILO Fundamental Rights and Principles at Work.

The North American Building Trades gave UBS a failing grade on their RCP scorecard. A month later, Connecticut Treasurer Shawn Wooden, Maryland Treasurer Nancy Kopp, Maryland trustee, high school English teacher and union leader Doug Prouty, and NEBF’s Monte Tarbox and other investors met with UBS’s new President of Asset Management, Suni Harford, and Trumbull Fund officers in Hartford. During these face-to-face meetings, UBS’s new leadership and new Trumbull Fund leaders promised to be more responsive to investors. But Marriott was dug in.

After several more months of painfully slow progress, as UBS was revising its assessment, Marriott added a final straw. With the hotel largely shut down during the pandemic and most of the workforce furloughed, Marriott proposed extending employer-paid health insurance benefits for hotel employees who were not bargaining collectively while ending it for employees who were. Marriott’s anti-union overreach coupled with the investor scrutiny appeared to be a final straw for UBS.

UBS assured investors that Marriott’s latest ploy was unacceptable. It is not known what else was said between UBS and Marriott, but within a matter of days, Marriott had backed down from its proposal and the hotel workers had a contract.

Credit goes to UBS officials for finally engaging and helping to bring the dispute to an end. Teamsters, Operating Engineers, county and state labour leaders and officials, Australian dock workers and health care workers, Dutch public sector labour leaders, and Finnish hotel labour leaders, largely convened by the Committee on Workers Capital, contributed to this effort.

Maryland teacher trustee Doug Prouty said, “This outcome shows that being an activist trustee can make a difference. I am very pleased about the resolution for the hotel and its employees, for the members and beneficiaries of our state retirement system, and for the people of Maryland.”

If you want to hear the inside scoop, ask one of these investors.

Photos courtesy of Unite Here Local 7/Dana Wise