Los Angeles Hotel Labor Dispute

The labor agreement, which expired on April 15, 2004, had been in effect for six (6) years. The parties commenced negotiations on March 19 but have been unable to conclude an agreement.

Duration
The Employers Council representing nine (9) hotels has proposed a five (5) year agreement while the union, which represents 2,800 hotel employees, is insisting that it expire in two (2) years. The two (2) previous agreements had been in effect for six (6) year periods. However, if the agreement does expire in two (2) years, the termination of the new agreement would coincide with the expiration of most of the union's national labor agreements.

Wages
The Council is proposing 10 increases totaling $2.05 for non-tipped employees every six (6) months and four (4) increases totaling .40 cents for tipped employees. The percentage increase over the five (5) years for a non-tipped employee is roughly 20%. The union wants an increase of 13% in the first year and then another 10% in the second and final year. Certain hotel employees in New York City and San Francisco earn about $7.00 and $4.00 more per hour.

Health And Welfare
The Council will withdraw its proposal for a weekly contribution if the union agrees to a five (5) year term. The Council will increase its contributions to the Health Fund but first wants to use a substantial part of the reserves before paying the increase in hourly contributions. The net increase amounts to .49 cents per hour after the contributions begin.

The union will permit the Council to use five (5) months of the reserve in the second year but is demanding a .48-cent per hour increase in the first year.

Pension
The current contribution is .43 cents per hour. The Council is offering .05 cents in the third year and another .05 cents in the fifth year. The union is seeking an increase of .65 cents in the first year and .80 cents in the second year.

Meetings
The parties are scheduled to meet for the first time with Peter Hurtgen, Director of the Federal Mediation & Conciliation Services (FMCS) on Monday, August 16. Mr. Hurtgen was involved in the settlement of the grocery strike. A strike vote has not been taken. Consequently, at this time there is no threat of either a lockout or a strike. A wildcat strike took place on August 12 over the possible termination of medical benefits at one hotel. A proposed lockout was averted by an agreement between the parties. The employees have returned to work.