HEI Loses Princeton Dollars

UPDATED: March 1, 2012, at 4:26 a.m.

Princeton University will not reinvest in HEI Hospitality, according to a Tuesday press release from UNITE HERE!, a union that represents hotel and restaurant workers including Harvard University food service workers.

The decision makes Princeton the latest high-profile university to choose not to make further investments in HEI, a hotel chain which has come under fire for repeated allegations of failure to comply with labor regulations. Yale, Brown, the University of Pennsylvania, Cornell, Vanderbilt, and Swarthmore have all stated within the last year that they will not reinvest in the company.

Harvard, which has drawn criticism from labor rights activists for investing in HEI as well, announced last December that the University will review HEI’s practices and is “aware of public statements on HEI made by peer institutions,” according to a statement from Executive Vice President Katie N. Lapp.

Harvard has yet to announce whether it plans to reinvest in HEI, and University officials declined to comment on Princeton’s announcement on Tuesday.

According to the UNITE HERE! press release, Andrew Golden, president of the Princeton University Investment Company, said at a meeting that the decision came in response to the labor concerns surrounding HEI.

But Martin A. Mbugua, a Princeton spokesperson, said that Golden “was very explicit that this decision was made solely for business reasons.”

“The position was not in any way responsive to the allegations,” Mbugua said.

Official complaints were filed against HEI for mistreatment of employees in 2008, according to UNITE HERE! researcher Riddhi N. Mehta-Neugebauer. HEI-owned Embassy Suites in Irvine, Calif., was found guilty in 2011 of refusing breaks for several workers and has also settled or been found liable for a total of $99,999 on 32 wage and hour complaints.

Over 98 percent of HEI’s funding comes from investments by universities, according to the press release. Princeton’s investments in HEI total at least $94 million, while Harvard’s investments total at least $70 million, the release said.

“If they lose their financial backing, their entire future as a private equity fund is in jeopardy,” Mehta-Neugebauer said. “I think it really gives leverage to hotel workers to come to the table and really puts a lot of pressure on HEI to negotiate in good faith and to respect the workers as well.”

Although Mehta-Neugebauer said that HEI hotel employees are not part of UNITE HERE!, she said that the union stands in solidarity with fellow workers in the hospitality industry. UNITE HERE! has sent emails to administrators at various universities to encourage them not to reinvest in the chain, and representatives of the union met with Lapp in early January.

“What’s alarmed a number of students on college campuses has been these labor violations occurring in the name of these institutions who count themselves as being bastions of moral values and ethics,” Mehta-Neugebauer said.

Brian Lang, president of the UNITE HERE! Local 26, the union’s branch serving the greater Boston area, said that he was not surprised by Princeton’s decision given the number of other universities who have acted similarly.

“It seems to be the wave of what’s happening,” Lang said. “It seems that universities want to keep their arm’s length [from HEI].”