Brown University moved a step closer to cutting ties with HEI Hotels & Resorts — a company accused of mistreating its workers, in which both Brown and Yale hold controversial investments — in December, but Yale remains undecided on whether it will follow Brown’s lead.
The Brown University Advisory Committee on Corporate Responsibility in Investment Policy unanimously recommended at its Dec. 7 meeting that Brown refrain from further investments in HEI Hotels and Resorts until the company “proves it meets Brown’s ethical standards for investment,” according to a Jan. 9 press release. Yale will consider Brown’s decision in the coming weeks, but does not regard its actions as a “binding precedent,” said Jonathan Macey, the chair of Yale’s Advisory Committee on Investor Responsibility.
“We’re always interested in what other advisory boards do and decide,” Macey said. “It’s certainly something we will discuss.”
Nigel Hurst, senior vice president of human resources for HEI, said none of its investors have indicated they will change the status of their investments as a result of the Brown committee’s recommendation. He would not disclose whether Brown and Yale are among the investors.
HEI, the seventh-largest hotel management company in America as of last March, has faced accusations of mistreating employees and violating labor laws for the past two years, causing students at campuses nationwide — including Yale — to protest their universities’ investments in the company. Activists applauded Brown University President Ruth Simmons in March 2010 when she sent a letter to HEI expressing concerns about allegations that the company harassed and intimidated workers trying to unionize.
Brown’s committee cited “a persistent pattern of allegations involving the company’s treatment of workers and interference with their efforts to unionize” as one reason for its decision.
But Yale law professor Macey said he personally feels that “persistent allegations” bear no more credibility than a single allegation when all claims are posed by the same party. Brown’s Jan. 9 press release did not contain any information beyond what Yale’s own investigations of the past two years have yielded, he added.
“If these people are curbing people’s legal rights to organize or engaged in unfair labor practices in violation of the law, that’s of great interest to us,” he said. “But in my personal view, it does not reflect a particularly disciplined approach to this issue to base recommendations about a fiduciary … on allegations that don’t provide any information about culpability.”
In HEI’s defense, Hurst said the hotel management company has never violated the National Labor Relations Act, a fact Brown’s report backs. Filings like the ones that accuse the company of mistreating workers are often intended to create publicity for a campaign, Hurst said, and are later withdrawn by the filers or dismissed by the National Labor Relations Board. Hurst added that the union in question, which affects four of the company’s 35 hotels, is seeking recognition from HEI without holding an independent election. HEI is “fully prepared” to recognize a union if employees show support for it through an independent election, Hurst said.
For now, Brown’s decision is just a recommendation and will require approval from Simmons and the Brown Corporation to be implemented, said Haley Kossek, a member of the Brown Student Labor Alliance. Still, Kossek said the decision is a powerful one. Recommendations made by the committee in the past — against investments in tobacco companies and companies profiting from genocide in Sudan — have been enforced, she said.
Mac Herring ’12, a member of the Yale Undergraduate Organizing Committee, praised the decision. Herring said she hopes Yale will follow in Brown’s footsteps. While the UOC has not discussed the HEI investments issue with University officials since the Brown decision, Herring said UOC will use Brown’s recommendation to push Yale for a similar resolution.
“The strongest message that Yale can send … is to not invest further, if asked,” Herring said. “That is the step that Brown is taking and it is the strongest possible message that can be sent to HEI without losing money.”
Yale’s investor responsibility committee will hold its next public meeting on Jan. 20.