
A former hotel owner, Madison 92nd Street Associates LLC, sued Marriott International Inc accusing the hotel group of conspiring with a labor organization to control which Marriott-branded hotels unionized. The plaintiff is seeking $400 million in damages.
Madison 92nd Street Associates LLC alleged that as a result of a conspiracy, workers at its hotel on 92nd Street in Manhattan unionized, which led to poor financial performance and ultimately forced the hotel into bankruptcy in 2011, five years after it opened.Madison chose Marriott as the hotel operator for its property because of the assurance it received from Marriott that it was a non-union company and that Courtyard would employ a non-union workforce at the hotel, according to the lawsuit.Madison alleged that at the time it had entered into the management agreement, Marriott was secretly negotiating with the New York Hotel and Motel Trades Council, AFL-CIO. Those talks, according to the lawsuit, led to a deal in which Marriott agreed to help the union organize at certain Marriott branded hotels, including the Courtyard hotel at 92nd Street, in exchange for not doing so at Marriott's flagship properties in New York.After Marriott and the union concluded the secret agreement, they negotiated another deal that increased the number of permanent employees at the 92nd Street hotel by more than 47 percent, Madison alleged. As a result of the agreement, the hotel's operating costs increased by $2 million annually while its net operating income dropped by approximately fifty percent to $4 million per year, according to the lawsuit.Marriott and the unions did not comment on the case, describing it as "without merit".Last june 2012, RLJ Lodging Trust has purchased the bankrupted Courtyard Marriott on East 92nd Street. It paid $82 million or about $363,000 for each of the property’s 226 hotel rooms.