Buyer Alert: Protected Labor Dispute at Mr. C Beverly Hills Hotel Continues Amid UNITE HERE Local 11’s Bad Faith Bargaining Allegations Against Property

Ghassemieh Family Received $20.4 million “Return of Equity” from hotel’s loan in 2017 but has not settled a fair contract for housekeeping workers

LOS ANGELES--(BUSINESS WIRE)--A labor dispute at the Mr. C Beverly Hills Hotel has entered its 14^th month as UNITE HERE Local 11 alleges that the company has wasted months through bad faith bargaining over a first collective bargaining agreement for the hotel’s housekeeping employees.

Housekeeping workers voted to unionize with Local 11 in an NLRB-sponsored election held in November 2019. The union was formally certified workers’ bargaining representative in July 2020 following a protected legal process in which hotel management challenged certain workers’ eligibility to vote. The union promptly sought to initiate collective bargaining, but has alleged that Mr. C management has failed to come to the table to negotiate in good faith on a first union contract. Workers are seeking fair wages, affordable health insurance, health and safety protections, and other benefits.

Through an unfair labor practice charge filed with the National Labor Relations Board (NLRB), the union has alleged that the Mr. C management has engaged in such bad faith tactics as refusing to meet at reasonable times or intervals, failing to send persons authorized to bargain on behalf of the company, engaging in “surface bargaining,” thereby wasting months of time during which the parties could have resolved the dispute. The charge is currently pending investigation by a regional office of the NLRB.

This charge follows the October 2020 settlement of previous charges lodged against Mr. C., which centered on a mass layoff of employees in March in which the union alleged the company singled out union supporters. While the company claimed that the COVID-19 crisis required it to conduct layoffs, Local 11 alleged that Mr. C discriminated against union supporters in carrying out the firings and denying workers recall rights. Of the 21 workers fired at one time, the names and photographs of 19 had appeared on a pro-union flyer distributed at the hotel. After conducting its own investigation, a regional office of the NLRB agreed with the Union’s allegations and authorized a complaint against the Company. Under a settlement agreement resolving the charges, Mr. C was required to guarantee each of the 19 discharged workers that it will recall them when positions become available. The company also agreed to reinstate and provide thousands in back pay to one employee whom the union alleged had been the subject of a separate act of discrimination.

Bob and Alex Ghassemieh are the majority owners of the Mr. C Beverly Hills, and Alex Ghassemieh raised preferred equity for the hotel from family and friends according to a report in the LA Business Journal. The Ghassemieh family are also majority owners of First Credit Bank, headquartered in Los Angeles with $500 million in assets as of 2019. The Ghassemiehs received a $20.4 million “return of equity” from the Mr. C hotel’s loan in 2017 according to its prospectus, but have failed to settle a contract with the housekeeping workers.

The property was also approved for a $1.5 million Paycheck Protection Program loan from taxpayers, and has failed to disclose in response to Local 11 inquiries whether it used the money for payroll costs as intended by Congress.

UNITE HERE Local 11 is a labor union representing over 32,000 hospitality workers in Southern California and Arizona who work in hotels, restaurants, universities, convention centers and airports.