Catholic Scholar Unveils Major Case Study on Workers Rights and Socially Responsible Investment in the Hotel Industry

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The clarity of Catholic Social Teaching on workers’ rights was reinforced by Pope Benedict XVI in his 2009 encyclical letter, Caritas in Veritate, which reminded readers of “the duties of solidarity” in the modern world and condemned corporate behavior that put the pursuit of profits ahead of human dignity and the fulfillment of legitimate social needs. The general principles of Catholic teaching on workers’ rights elucidated by Benedict are clear enough, and date back at least to Pope Leo XIII’s 1891 encyclical Rerum Novarum. But how should Catholic Social Teaching guide Catholic institutions in evaluating particular circumstances of corporate behavior in the present day? That is the question that St. Joseph’s University theologian Gerald Beyer has considered in a newly released study that should gain wide attention.

Working with data obtained from Unite Here, the union of hospitality workers, Beyer, a member of Catholic Scholars for Worker Justice, conducted an analysis of the employment practices of HEI Hotels & Resorts, a private equity firm that specializes in investments in the hospitality industry. Founded in 2002, HEI is the fastest growing owner/operator in the hospitality industry, and it currently owns and manages properties under a dozen well-known brand names.  In recent years HEI has obtained major investments from university endowments and used these funds to purchase numerous hotel properties, employing labor practices at these establishments that have led to protests from student organizations on some of the investing campuses.  Beyer’s study seeks to shed light on this controversy.

Analyzing a survey of workers from a number of HEI-owned establishments conducted by Unite Here, Beyer found numerous alleged violations of many of Catholic Social Teaching’s norms regarding workers’ rights. The problem with private equity firms like HEI, Beyer explains, is that there are no public stockholders who can press for changes in company policy at shareholders’ meetings. As a result, he points out, it is difficult to advance principles of Socially Responsible Investing (SRI) in private equity firms like HEI whose operations are not transparent to the public.

Based on his analysis, which he conducted as an unpaid consultant to the union Unite Here, Beyer questions whether it is morally justified for Catholic institutions such as the University of Notre Dame, which currently invests in HEI, to continue to do so given HEI’s record.  As Beyer puts it, “the Church teaches that we cannot stand by idly as workers continue to be abused and exploited.”  A copy of his detailed report can be found here.