HTC Wins Important Arbitration Extending Healthcare to Laid-off Workers

March 19, 2020 8:00 PM

The Union won an important victory in arbitration yesterday, guaranteeing workers continued health care if they are laid off as a result of the Coronavirus crisis.

Image: HTC President and Executive VP and Union General Counsel preparing for arbitration

Currently, almost 90% of the union’s members are on layoff, and it is likely that number will rise. With the loss of employment comes a loss of health insurance.

Union President Peter Ward, remarked after the decision was promulgated: “It goes without saying that health care is critical for hotel workers and their families during this crisis, and this arbitrator’s decision will ensure tens of thousands of HTC-represented workers and their families keep their health insurance even when they are put on layoff or their employer closes.”

This decision applies to IWA- and GRIWA-covered workers

The Union brought a claim under both the Industry Wide Agreement (“IWA”), the union’s master contract covering most Manhattan hotels, and the Greater Regional Industry Wide Agreement (“GRIWA”), the union’s master contract covering many hotels in NJ, suburban NYC, and upstate, as well as several upstate casinos.

The Union’s argument

The Union made the claim under those contracts’ severance pay provisions, which entitle employees to severance pay and continued benefits in the case of a “permanent” closure.

HTC Recording Secretary and General Counsel, Rich Maroko, executed the Union’s legal strategy.

Maroko explains, “We argued that, because the impact to the hotel and gaming industries caused by the Coronavirus crisis could last for an extended period (essentially causing a permanent layoff), employees were entitled to severance benefits right away. We also emphasized that, the continued health care portion of severance was especially important in the context of a global pandemic.”

The employers’ argument

The Hotel industry opposed our claim, arguing that severance pay and benefits should only be paid when the length of the job loss was unclear after an employee was laid off for such a long time it was effectively a “permanent” job loss. The Hotel industry asked the arbitrator to deny severance pay and benefits unless and until an employee’s job loss was so long that it was “de facto” permanent.

The arbitrator’s ruling

The arbitrator found in the Union’s favor with regard to the continued health care that is part of severance. He noted that the contract required employers to continue health care for employees and that to deny them health care when they are facing an unprecedented threat to their health was unconscionable.

The arbitrator’s decision requires IWA employers to continue health care payments for an additional four months. This means that, if you are laid off today, your health insurance will continue through the end of August.

For GRIWA covered shops, employees will receive six month of health insurance paid for by the employer.

With regard to severance pay, the Arbitrator ruled that it was premature to pay severance pay when it is still unclear how long the impact of the Coronavirus crisis will last. Instead, the arbitrator said the union can come back at any time and argue that a layoff is long enough that severance pay will be triggered.

The Union is working on the shops not covered by the arbitrator’s decision

The arbitrator’s decision is binding on the IWA and GRIWA hotels and casinos, which account for a large majority of our members (about 88%), but it does not cover the Local 6 represented clubs, HTC’s Division A shops, the Resorts World Casino and the Empire City Casino in Yonkers, and a handful of other stand-alone shops.

The Union is working on getting those shops covered, through negotiation preferably, but arbitration if necessary. We will keep you informed on that effort.

Why the industry opposed this

There is no doubt about the economic damage this pandemic is causing. So, under these circumstances, it should not surprise anybody that management opposed the Union’s demands. The healthcare plans HTC-represented workers enjoy (that management has to pay for under our union contracts) are very expensive.

The cost to the industry for the four month period is almost a quarter of a billion dollars.

As Union President Peter Ward remarked: “No matter how good an employer is, or how much it values its employees, management’s ultimate mission is to look after the interests of the owner and shareholders, above all other things. That’s why workers have unions. It’s our job, not management’s, to fight for the interests of the employees first and foremost.”