OAKLAND, Calif. — The release of private equity documents to a union involved in a year-long employee boycott of two luxury California resorts has the private equity community in anything but a relaxed mood.
The Hotel Employees & Restaurant Employees Union Local 2850, AFL-CIO, Oakland, Calif., has been boycotting Claremont Resort and Spa in Berkeley, Calif., and The La Costa Resort and Spa in San Diego since contract negotiations at each site broke down a year ago. The resorts are owned by KSL Recreation Group, LaQuinta, Calif., a subsidiary of Kohlberg Kravis Roberts & Co., New York. Union employees at Claremont have been working without a contract since 2001; the La Costa contract expired last year. KSL officials wanted to cuts health care costs for hotel employees.
Along with the current debate in the industry concerning public fund disclosure of private equity performance, the KSL-union issue raises another concern for private equity firms: the use of documents by unions to prove that a portfolio company, in this case KSL, could afford to pay for benefits such as health care for union workers it employs.