TROUBLE IN PARADISE
The Labor Wars at Terranea, a High-End Celebrity Hotel Made Famous by #MeToo
The L.A. hotel has been sued for sexual harassment, wage theft, and human trafficking. And a new decision found the hotel ‘illegally’ fired one of its most vocal whistleblowers.
In October of 2017, hospitality workers filed a class-action lawsuit against the Terranea Resort, a $480 million luxury hotel and golf course on the bluffs of Rancho Palos Verdes, California, accusing the 582-bedroom venue of wage theft, failing to provide meal or rest breaks, and then inserting “fake breaks” into their time cards. As news outlets reported the story, most cited one especially vocal whistleblower, a lead chef at the hotel and a union advocate named Freddy Lovato. Lovato told LA Eater that workers were “regularly not permitted to take breaks”; in LAist he said that “behind the scenes there are problems with the way we workers are being treated”; and he explained to Bloomberg that the contrast between the hotel’s wealthy clientele and its mistreated workers made him “picture the Titanic.”
The Salvadoran chef had worked at Terranea since 2009, starting as a low-ranking cook and moving, by way of two promotions, to junior sous chef—a role he kept for eight years without incident, save for a single verbal warning in 2012. But in August of 2018, the resort fired Lovato over what documents filed with the National Labor Relations Board refer to as “The Gluten-Free Mac and Cheese Incident.”
This week, federal administrative law judge Jeffrey Wedekind decided that Lovato’s firing was illegal. The hotel, Wedekind wrote in his decision, had provided “false or misleading testimony” by “exaggerat[ing] the seriousness of the mac and cheese incident.”
If adopted by the National Labor Relations Board, the decision would require the hotel to rehire Lovato with full back pay, and to issue a pledge to employees ensuring their federal labor rights. It’s a decision with major consequences for the hotel, the area’s largest employer and the battleground of a years-long labor fight, attracting multiple lawsuits alleging human trafficking and widespread sexual harassment; a boycott recently endorsed by the California Democratic Party, the Dolores Huerta Foundation, the Feminist Majority Foundation, and Jane Fonda; and a spotlight in TIME magazine, when one of their dishwashers was featured as a 2017 Person of the Year “Silence Breaker.”
The opening of Terranea, a made-up word riffing on the word “Mediterranean,” coincided with an embattled moment for the American economy. It was 2009, and the recession was in full swing—billionaire development firm Lowe Enterprises took an $8 million loan and generous tax abatement from the Palos Verdes City Council just to open Terranea’s doors. But the hotel had a strategy. A developer told the Los Angeles Times they envisioned the 18,000-square-foot property as a “destination for meetings.” The gamble worked: in the years since, Terranea has become a regular landing pad for corporate retreats featuring A-list talent.
Not long after opening, the hotel encountered some labor troubles. In 2011, they paid out a $1.1 million settlement in a class-action lawsuit over allegations of failing to pay workers overtime and minimum wage. But the recent problems for the resort began in 2017, when a dishwasher named Sandra Pezqueda filed a lawsuit against Terranea and the staffing agency that hired her, Excellent Maintenance Service, alleging sexual assault and retaliation.
According to the complaint, Pezqueda started working at the hotel in 2015, when her supervisor began offering her extra hours in exchange for a date, changing her schedule around to work with him alone, and twice sending her to areas of the property without video cameras, blocking the doorway, and attempting to kiss her. When she complained to management, Pezqueda claimed, they fired her.
The case, filed on the eve of the #Metoo movement, caught national attention, earning Pezqueda a spot as one of the “Silence Breakers” in TIME’s Person of the Year cover story.
Barely months after the first case was filed, another arrived. In October of 2017, two workers filed a complaint for what would become a class-action lawsuit representing some 400 hotel workers over failing to pay overtime or minimum wage. (At the time, the hotel maintained that they abide by all labor laws; the case settled this April for $2.1 million). A year later, Terranea was slammed with another labor suit, this time alleging human trafficking—specifically, that the hotel had replaced their entry-level work force with “interns” from Southeast Asian countries, including Malaysia, India, and the Philippines, many of whom had paid thousands of dollars in airfare and placement fees. (The hotel denied that their intern program violated labor laws). The 23- and 24-year-old foreign exchange students who filed the suit claimed they had accumulated some $11,000 in debt before deciding to quit the internship and return to Kolkata, India.
Pezqueda’s harassment suit ended in May of 2018 with a $250,000 settlement, but, according to activists and employees, it hadn’t changed much at the hotel. In July of that year, Rancho Palos Verdes City Council approved a ballot measure that would require emergency alarm buttons for hotel workers at Terranea and the nearby Trump National Golf Course. But the measure wouldn’t be up for vote until November of 2019, and by October of that year, eight other women had come forward at the hotel with similar allegations, one of whom, a 26-year-old named Silvia Jasmin Sanchez, filed a second sexual-harassment suit, according to reports in the Los Angeles Times. (The hotel released a statement, noting that the allegations were “very serious” and “do not reflect the values or culture of Terranea.”) The outpouring led women’s groups and labor unions across the state—including California NOW, the Feminist Majority Foundation, the Screen Actors Guild and Radio Arts—to launch a “#Metoo boycott” of the resort. Just this June, the Dolores Huerta Foundation, the California Democratic Party and Jane Fonda endorsed it.
“There’s just been no real reforms on how management is going to stop the harassment of hotel housekeepers,” said Kathy Spillar, executive director of the Feminist Majority Foundation. “Management knows which guests are a problem, because the housekeepers report the names of guests that are problems. In addition, Terranea has been made aware from various lawsuits of some of its staff that are problems, and yet there doesn’t seem to be any real recognition of what has to be done to change the work environment.”
It was in the midst of this hubbub that Freddy Lovato first encountered issues at work. In October of 2017, Lovato participated in a delegation informing the hotel of workers’ intent to unionize. In the following months, he spoke freely to media about the hotel’s working conditions and lawsuits, and even testified in court during the wage theft case. In 2018, he participated in several union actions, including circulating a petition for the emergency alarm button ballot initiative, which would also require a $15 minimum wage. In response, Lovato claims, his supervisors began examining his work closely. “They looked for excuses,” he said. “It’s like when the police follow you on the highway for 20 minutes or half an hour, looking for a little mistake.”
Then came “The Gluten-Free Mac and Cheese Incident.” According to documents, on the evening of May 25, 2018, sometime between 6:15 and 6:30 p.m., a family at a Terranea restaurant ordered two regular mac and cheeses, an avocado grilled cheese, a BLTA, a burger, three orders of fries, and a mac and cheese with gluten-free sauce for a child with a severe gluten allergy. When the dishes were made and served, the child’s mother called the restaurant’s manager. She complained that her daughter “began vomiting” while eating her mac and cheese which, evidently, had not been gluten-free. According to the judge’s decision, Lovato’s colleague (who is not affiliated with the union) had prepared the orders, but it was Lovato who received a “Final Written Warning,” threatening termination. In August, after allegations of improperly discarding chicken wings, Lovato was fired.
For their part, the hotel’s management claimed that Lovato had been given fair warning about his behavior, and that his firing was unrelated to his affiliation with the union or his appearance in press coverage. They plan to appeal the decision. In his NLRB decision, however, Judge Wedekind concluded that Terranea had “harbored animus against the union and protected concerted activities and seized upon the Mac and Cheese Incident as a pretext to issue a final written warning to Lovato and thereby create the foundation to rid itself of one of the Union’s most active and outspoken supporters.”