City News Service
Former Chateau Marmont workers are calling to on the Biden Administration’s U.S. Small Business Administration to ensure that the famed hotel complies with federal Paycheck Protection Program loan requirements.
And that’s the least of the problems facing celebrity hotelier Andre Balazs, owner of the Chateau Marmont, who is accused of sexual harassment and racial discrimination, but who now finds himself in the firing sights of his Mercer business partners, who want to remove him amid legal claims of self-dealing and financial mismanagement.
The out-of-work laborers held a “street theater performance” Thursday in which former hotel workers received food boxes with signs that said “Chateau Marmont got approved for $1.95 million and we got $0.”
The landmark hotel was approved for a $1.95 million PPP loan in early February and, as of April 13, the loan has been “disbursed but not paid in full or charged off,” according to Maria Hernandez, a Unite Here Local 11 sPokeswoman.
While the PPP loan program was intended to keep workers on payroll, “only a small fraction of laid-off Chateau Marmont workers have returned to their jobs, Hernandez says.
Meanwhile, Chateau Marmont owner Andre Balazs appears to be barely holding on to his position as his partners attempt to kick him out of their business, according to a new report in the Hollywood Reporter.
In a new lawsuit filed on April 9 in New York, his colleagues allege that Balazs needs to be removed due to his “financial mismanagement of the property, failure to address myriad staffing issues and the fallout over recent revelations regarding his stewardship of the Chateau Marmont.”
The filing also discloses that Balazs’ partners had sought to terminate him as managing director of the hotel over “ongoing and gross misconduct” as early as November 2019, but that he refused to step down.
“Balazs’ willful, intentional disregard of his duties and apparent misappropriation of assets have, among other things, crippled the manager’s ability to properly manage [the hotel], caused reputational harm, and resulted in third-party litigation and significant monetary losses,” the lawsuit reads.
According to The Hollywood Reporter, last September dozens of Chateau Marmont employees spoke to the publication about “the iconic hotel’s toxic working environment, describing it as abounding in racial discrimination and sexual misconduct, perpetuated by complicit management and ownership. Balazs himself was accused of racist hiring practices and unwanted touching and other inappropriate behavior toward Chateau employees, either at work or during company events, as well as at the properties of the Standard hotel group, where he served as chairman and which he’d founded in 1998. He and the hotel have denied it all.”
Balazs’ partners in the Mercer group allege in their lawsuit that Balazs “’engaged in self-dealing’ by charging the Mercer’s parent company $100,000 in ‘personal legal expenses’ related to the settlement of harassment allegations against him — and that he ‘refuses to explain’ either those claims or discuss other similar issues at the hotel.” The publication rerported that Balazs’ lawyer maintained that the lawsuit has no merit.
Separately, a spokesperson for the Chateau Marmont Hotel on Friday disputed the allegation made by some former workers and a representative of the Unite Here local labor union that it had not complied with federal Paycheck Protection Program loan requirements.
“The Chateau Marmont did apply for and receive a PPP loan in 2020, but it was returned in full because business conditions prevented the hotel from using the funds according to the spirit of the program,” thwe hotel spokesperson said inas statement. “The Chateau Marmont applied for and received a second PPP loan in 2021 and is complying with all federal laws and regulations regarding the proper uses of the loan.
“Just as so many other outlandish claims being made by Unite Here Local 11 about the Chateau Marmont, the accusation that the Chateau Marmont is improperly using the second round of PPP funding is simply untrue. Given the union’s exorbitant and gratuitous spending of money and resources on attacking the Chateau Marmont — whose employees receive significantly higher than union wages — perhaps the members of Unite Here Local 11 should be demanding a proper accounting of how their dues are being spent and why.”
The Chateau Marmont Hotel is also facing a boycott as part of continuing labor problems from former employees alleging racism and sexism in complaints stemming from a mass layoff of more than 200 employees at the onset of the pandemic.
Actress Jane Fonda is among supporters who has signed an online pledge to boycott the Sunset Strip hotel whose former employees called for the labor action, maintaining that they were laid off without severance pay after years of service.
The swanky castle-like West Hollywood hotel, long a hangout for celebrities and host to bashes for the rich and beautiful, is currently in the midst of being converted into a members-only residence.
Meanwhile, former employees have lost not only their jobs but also their health insurance and benefits.
Shortly after the layoffs last year, Chateau Marmont launched an online store and a GoFundMe drive to benefit laid-off workers. The GoFundMe campaign raised $168,612.
According to Hernandez, the amount raised was not “nearly enough” to cover the losses faced by the ex-employees. The Unite Here Local 11 hospitality union has no labor contract with the Chateau Marmont, though it has been providing support to the hotel’s former employees.
The Chateau Marmont is also facing a lawsuit from another former employee who has alleged racism and sexism during the two years she worked as a banquet server.
In a complaint in L.A. Superior Court, Thomasina Gross alleged racial discrimination and sexual harassment. Gross, who is Black, maintains that the hotel passed her over for promotions on several instances in favor of white employees with less experience, some whom she was later asked to train. According to Gross, she also complained numerous times about guests touching and groping her, but alleged that management failed to take action.
On April 12, according to court documents, Gross’ attorneys requested a dismissal of that lawsuit and demanded arbitration.
