Hotel Online Special Report

You Don't Have to Give It All Up! 
(With a Union Neutrality Agreement)
JMBM / April 1999 - Many employers want to avoid any sign of compromise with a union, but neutrality agreements can be important strategic took for developers and owners in at least two situations: 
  1. where governmental approvals require accommodation of the union, and 
  2. where it is justified to establish peaceful coexistence with the union. 
A "neutrality agreement" typically involves an agreement between an employer and a labor organization in which the employer pledges not to oppose union organizing efforts, and may also extract certain promises from that union.

Owners and developers of hotels today will often find that they cannot get critical entitlements or permits they need for new development and other activities unless they give the bureaucrats a major concession for their union constituencies. These representatives or administrators want to acknowledge their union supporters - assisting in the unionization process, and one of the most common "suggestions is a neutrality agreement.

The "standard" union version of a neutrality agreement amounts to complete surrender -    you give up everything when you have serious options available. We have been successful in negotiating some substantial improvements from this standard, including the union's agreement not to strike, leaflet, pamphlet or engage in any negative publicity during a negotiated period. In our negotiations, we strive to obtain union agreement not to join with other trade unions in their disputes with the company. In addition, the neutrality agreement may obligate the union to refrain from activities to thwart the efforts of the developer or operator with a particular project. 

One of labor's favorite tactics is to maneuver behind the scenes with local elected officials in an attempt to delay or prevent planning commission members, city councilmen, or other local politicians from issuing building permits, approving zoning plans or otherwise making it easy for commercial developers to proceed with a project. 

Labor has also been known to file questionable complaints with state regulatory agencies to burden the company with administrative proceedings. This negative publicity and misuse of process can really hit a company's bottom line and delay or even stop a project before it gets off the ground. Negotiating the right neutrality agreement can avoid these costly scenarios.

Louise Ann Fernandez, Chairman (right) and Marta F. Fernandez, Seniro Parnter (left) Labor & Employment Group
JMBM's Global Hospitality Group lawyers are leaders in the area of negotiating neutrality agreements. We were at the forefront of experience with neutrality agreements when they were relatively rare, and we have extended our leadership in this area as neutrality agreement situations have proliferated in the past year or so.

Patrick W. Jordan, who heads our San Francisco labor practice, recently successfully negotiated a neutrality agreement with a local union on behalf of a major hospitality client. 

To  date, the project is underway without incident. Mr. Jordan's advice to clients is, "Don't give it all up! If you sign the standard union neutrality agreement, you have gotten nothing. You have to know your strengths and how to increase your bargaining leverage." Knowing how to structure these agreements and carrying out the necessary elements to make them work for the employer are the key ingredients.

Marta Fernandez, a labor partner in the firm's Los Angeles office, who also represents several developers and hospitality clients, shares Mr. Jordan's views. "We like to be involved at the very outset  - in the early planning and strategy phases and way before any negotiations begin. That is when the tone and direction are set and where we can bring great value and maximum benefit to the team."

For more information, please contact Marta Fernandez at 310-2Ol-3534 or [email protected]; Pat Jordan at 415-984-9655 or [email protected].

Jeffer, Mangels, Butler & Marmaro LLP
Jim Butler
2121 Avenue of the Stars
Los Angeles, CA 90067-5010
Phone: 310-201-3526
[email protected]
Also See: Venetian Files Federal Lawsuit Against Culinary Union for Harassment / March 1999 
Janice Loux Reelected as President-Business Manager at Boston's Local 26 Hotel & Restaurant Workers Union / March 1999 
National Labor Relations Board Throws Out Union Charges Against Miramar Sheraton; Judge
Admonishes Union for `Hollow and Hypocritical' Arguments / Jan 1999 

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