Yale’s Advisory Committee on Investor Responsibility may reevaluate its stance on the University’s investment in HEI Hotels & Resorts in the wake of Brown University president Ruth Simmons’s letter to HEI, in which Simmons expressed concern over allegations that the company violated labor laws.
Almost a year and a half after students at campuses across the country — including Yale’s — began protesting their universities’ investments in the hotel management company, Simmons wrote to HEI CEO Gary Mendell in February, saying Brown may rethink investments in HEI in light of reports that the company intimidated and harassed workers involved in union organizing activities. Simmons’s letter has prompted Yale’s ACIR chair Jonathan Macey to take another look at HEI’s activities, although the ACIR declined to criticize the company this past fall, Macey said. But while student members of the Undergraduate Organizing Committee have urged Yale administrators and the ACIR to reprimand the Connecticut-based company, Macey said the committee is waiting to find concrete evidence that the HEI employees’ claims were true.
Brown’s letter is not the only reason the issue merits more research, Macey said: The National Labor Relations Board’s general counsel decided in October and November 2009 to advance a formal complaint filed by workers against the HEI-operated Sheraton Crystal City hotel in Arlington, Va., with a hearing set for June. Earlier complaints HEI workers had filed with the NLRB were withdrawn or dismissed.
“The fact that a complaint has been filed is interesting, but we need a little bit further information,” Macey said. “The way I see it, [Simmons’s] letter gives this allegation real credibility.”
Macey said he plans to contact the NLRB, HEI and Brown this week, and that the ACIR will discuss any new information at its meeting in early April. If the committee decides to take action, he said, it may engage HEI in a discussion of its labor practices.
At Yale, unlike at Brown, it is the ACIR’s responsibility to send such letters, not the university president’s. If appropriate, the ACIR will bring the issue to the Yale Corporation, the University’s highest governing body, which includes a committee on investor responsibility, Yale spokesman Tom Conroy said.
Yale has previously invested at least $121 million in HEI, according to HEI Securities and Exchange Commission tax forms provided to the News by the UOC in 2008.
Acting on a recommendation from Brown’s Advisory Committee on Corporate Responsibility in Investment Policies — which, like Yale’s ACIR, monitors the university endowment for ethical investment practices — Simmons informed HEI CEO Mendell that the university would consider divesting from HEI if reports of labor violations were substantiated.
“If there were to be any truth to the claims of the union and others that workers at some of your properties have been subjected to intimidation by managers due to their pro-union activities,” Simmons wrote, “this would be a matter of deep concern and contrary to our standards for investing.”
HEI responded to Simmons in a letter saying the allegations against the company are unjustified, HEI spokesman Jess Petitt said, adding that a third-party survey conducted last year showed that 89 percent of the company’s associates were satisfied with working for HEI. Petitt also pointed to the many complaints against HEI he said the NLRB has thrown out.
Brown’s letter is the first public statement of concern from a university administrator since the protests began, according to a Brown Student Labor Alliance press release. Brown sophomore Julian Park, a Brown SLA leader, said that though Simmons was initially reluctant to send the letter, maintaining that she generally only speaks out on education issues, she agreed to sign and send it on ACCRIP’s behalf.
Sarah Kidwell, Brown’s director of news and communications, did not respond to a request for comment.
Louis Putterman, an economics professor and ACCRIP chair at Brown, said ACCRIP based its recommendation on the mounting reports of worker intimidation at HEI, as well as testimonials from employees who said they had been laid off or transferred to other positions after agitating for unionization. The complaints HEI workers filed with the NLRB also factored into the decision, he said.
But both Macey and Putterman cautioned that the current complaints against HEI that are pending before the NLRB, though they have advanced further than previous complaints, may not serve as proof of the allegations against the company. Still, ACCRIP will only consider recommending divestment if more evidence against HEI comes to light — if the NLRB finds HEI at fault at the June hearing, for example, Putterman said.
“The fact that the [NLRB] complaint had been filed was something that we knew about,” Putterman said. “But we don’t really know how to interpret that.”
A CONTROVERSIAL PAST
Before Simmons sent her letter from Brown, the HEI controversy had unfolded along similar lines at Yale. Students on both campuses protested their universities’ investments in the company, the seventh-largest hotel management company in the country.
UOC member Mac Herring ’12 said the UOC plans to approach the Yale administration soon about the University’s investments in HEI. In the past, the UOC has urged the University to take more responsibility for the way it invests its endowment, staging a sit-in at Chief Investment Officer David Swensen’s office in November 2008.
Both the UOC and Brown SLA took their concerns to their respective universities’ investor responsibility committees, with each student group requesting committee members to ask HEI to adopt a unionization policy known as “card check neutrality,” in which the company would recognize the bargaining authority of a union as long as the union provided authorization cards signed by a majority of workers.
Yale’s ACIR declined the UOC’s requests in a letter dated June 25, 2009. But while Brown’s ACCRIP decided not to endorse the card check neutrality policy, the committee eventually agreed to recommend that Simmons write to HEI this past fall, Putterman said.
Brown SLA’s Park praised Simmons’s action, saying he hopes her letter will persuade other universities to criticize HEI as well.
The UOC’s Herring said it is “shameful” that Yale has not acted similarly to Brown, adding that the letter she and other UOC members asked ACIR to send HEI in October was not as strongly worded as the one Simmons wrote.
“We’d like for Yale to send an even stronger statement than Brown by refusing to give HEI more money,” she said. “A letter similar to the one sent by Brown’s president would be a huge step in the right direction.”
Herring said the UOC hopes to renew discussions with ACIR but is also considering contacting Swensen or University President Richard Levin directly.