Marriott Sued Over Alleged Conspiracy With Workers’ Union

Marriott International Inc. (MAR) was sued for $500 million and accused of conspiring with a hotel workers’ union to keep two of its New York City properties union-free while helping the union organize at others.

Madison 92nd Street Associates LLC, which owned the Upper East Side Courtyard by Marriott, sued the hotel operator today in Manhattan federal court, claiming Marriott and the union secretly agreed to keep the Marriott Marquis and the Marriott Financial Center from unionizing.

“In the fall of 2002, defendants abandoned the traditional arms-length labor-management relationship and joined forces in a secret agreement in which Marriott agreed to grease the skids for the union’s organizing campaign at certain Marriott-branded hotels,” Madison said in its complaint.

Madison claims it was forced into bankruptcy by the increased costs of doing business under what it called “the forced unionization of its workers” by Marriott and the union. It is seeking $50 million in damages, which may be tripled under U.S. antitrust and racketeering laws, plus disgorgement of $350 million in alleged unjust proceeds to Marriott.

Jeff Flaherty, a spokesman for Bethesda, Maryland-based Marriott, declined to comment on the suit. The New York Hotel & Motel Trades Council couldn’t immediately be reached for comment.

Madison has separately sued Courtyard Management Corp. in a related suit in New York State court.

‘Backdoor Agreement’

“Marriott and Courtyard have fraudulently enriched themselves at the expense of hotel owners and workers throughout New York City for over a decade now,” Nicholas Gravante Jr. of Boies, Schiller & Flexner LLP said in a statement today. “Through a secret, backdoor agreement with the New York Hotel Workers union negotiated in 2002, Marriott agreed to unionize the workers at certain hotels managed by Marriott -- including Madison -- in exchange for keeping Marriott’s most prestigious properties union-free.”

The case is Madison 92nd Street Associates LLC v. Marriott International Inc., 1:13-cv-00291, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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