The Real Deal New York

WeWork mops up messy dispute with union

Shared-office unicorn to hire 32BJ contractors, offer severance pay

October 13, 2015 01:10PM
By Konrad Putzier

From left: 32BJ's Hector Figueroa, WeWork's Miguel McKelvey and Adam Neumann

From left: 32BJ’s Hector Figueroa, WeWork’s Miguel McKelvey and Adam Neumann

WeWork and service workers’ union 32BJ SEIU today ended a four-month labor dispute that had turned into a publicity nightmare for the shared-office company.

According to a new agreement, WeWork will, “whenever possible,” start using union contractors for certain maintenance jobs in New York and Boston and arrange for the re-hiring of cleaners that lost their jobs during the dispute. The company also agreed to set aside $250,000 for severance payments for workers let go by its former cleaning contractor, Commercial Building Maintenance (CBM).“We appreciate that WeWork engaged in a constructive dialogue with us to ensure good cleaning jobs in New York and Boston,” 32BJ President Hector Figueroa said in a statement.

Cleaners at WeWork locations in New York began protesting in June, decrying wages as low as $10 an hour and demanding that their employer CBM let them join a union. Instead of heeding to their demands, CBM ended its contract with WeWork and 120 cleaners lost their jobs. Although WeWork hadn’t employed any of the workers directly, union protests and media coverage nonetheless focused on the company, echoing a wider debate over the responsibility of corporations for working conditions at their contractors.

After cutting ties with CBM, WeWork announced it would hire service workers directly at improved wages and benefits. But it only re-hired about 15 of its former cleaners, meaning more than 100 remained out of work, ushering in a new chapter in the dispute. 32BJ held a candlelight vigil outside of WeWork’s headquarters at 222 Broadway, and in September, the New York Times published a lengthy feature on the dispute that depicted WeWork’s leadership as out of touch with its former cleaners.

Today’s agreement highlights how keen WeWork is on damage control. The startup, valued at $10 billion, tries to foster a do-gooder, community-focused image, and being depicted as a heartless union buster hurts that effort. Although it didn’t abandon its decision to hire service workers directly, these workers will focus on tasks that involve interacting with WeWork tenants directly. For pure cleaning work, it will turn to union contractors and push for preferential hiring of former CBM workers, heeding to 32BJ’s demands.

“This is a great day for these workers. We are very proud to be welcoming them soon to 32BJ,” Figueroa said in a conference call with reporters.

“We pride ourselves on being great partners and we are pleased that we were able to develop a win-win partnership with 32BJ SEIU,” WeWork’s President and COO Artie Minson said in a statement. “This arrangement provides a sensible path forward that allows us to focus on our top priority: providing the best possible experience for our members in a way that allows their passion and innovative spirit to flourish.”