Brown University will not invest new funds in the controversial HEI Hotels & Resorts chain — an ethical shift in its investment policy that could make the university a leader among its peers.
Brown and Yale have come under fire for their investments in HEI, which has been accused of mistreating its workers and interfering with their efforts to unionize. In a Thursday night e-mail to members of the Brown Student Labor Alliance, Brown University President Ruth Simmons wrote that the university will not invest further in HEI on the recommendation of Brown’s Advisory Committee on Corporate Responsiblity in Investment Policy. But an official on Yale’s version of the investment committee said the University will not necessarily follow suit.
Informed of Brown’s decision by the News on Tuesday, Jonathan Macey, the chair of Yale’s Advisory Committee on Investor Responsibility, said Yale is unlikely to make a similar policy change without “additional meaningful facts.”
“Either Brown has information that we don’t have, or I find this to be an extremely perplexing development about what it takes to influence Brown’s decisions,” Macey said.
While Brown will not invest further in HEI, the university’s current holdings in the company are not affected, HEI Senior Vice President for Human Resources Nigel Hurst said.
Yale will keep its stake in HEI for now, Macey said, as the University considers the reasons behind Brown’s decision. Yale will not automatically adopt Brown’s plan or divest from HEI, he said, adding that the University should evaluate the companies in which it invests equally and avoid singling out HEI.
Brown has led other universities in reevaluating the hotel company in response to public outcry. Activists praised Simmons last March after she wrote HEI a letter outlining concerns about the company’s alleged harassment and intimidation of workers trying to unionize.
The National Board of Labor Relations and HEI signed a settlement in June that reinstated a fired union leader to the company’s Sheraton Crystal City hotel in Arlington, Va. Macey said that Brown lists the settlement as one of its motivations for ceasing future investment in HEI and described the judgment as worrisome.
“It reflects kind of a lack of understanding for the ramifications of the decision or the implications of what they’re doing,” Macey said of Brown’s decision. “The message they’re sending appears to be you shouldn’t settle these cases because bad inferences will be drawn about you if you do … and obviously that’s going to be a big motivation for companies like HEI not to settle if that’s seen as an admission of guilt.”
The Brown Student Labor Alliance is among several student groups on campuses nationwide to organize against HEI for its alleged mistreatment of workers. Lenora Knowles, a member of Brown’s student alliance, said the organization has worked since summer 2008 to raise awareness about HEI’s controversial treatment of workers.
In accepting the committee’s recommendation, Knowles said Brown has taken a first step toward addressing the problem. Though Brown is perceived as a liberal institution, Knowles said the group struggled to garner support from students and administrators for its protests against HEI.
Mac Herring ’12, a member of Yale’s Undergraduate Organizing Committee, said Brown’s choice is a move in the “morally and ethically right direction,” adding that she hopes Yale will follow.
“We wish that Yale could have been a leader on this issue and made the decision that Brown made when we asked them to many months ago,” Herring said. “Now that Brown has stuck its neck out for workers’ rights, we hope that Yale will find it easier to follow Brown and make the decision to not invest further.”
As of last March, HEI was the seventh-largest hotel management company in the country.