With Harvard's announcement April 1 that it will not reinvest in HEI Hotels and Resorts, only three major university investors have yet to make statements regarding their holdings in the company. Harvard's decision - attributed to "portfolio strategies and needs" by Harvard Management Company President and CEO Jane Mendillo - is the latest in a string of announcements that began with Brown officially announcing in February 2011 that it would not reinvest with the company.
HEI has been accused of prohibiting workers from unionizing and of promoting unethical treatment of workers. The company has settled multiple lawsuits with the National Labor Relations Board and has never been convicted of any wrongdoing.
Following Brown's decision last year, Yale also announced it would not reinvest with the company after its current contract expired. Investors cannot legally withdraw their dedicated holdings in the company, but they can pledge not to give more money in the future. Penn, Vanderbilt and Princeton followed suit, with Princeton's decision coming last month. With Harvard's announcement, 10 universities have now issued statements regarding HEI, though Brown remains the only school that specifically cited the company's alleged labor practices.
Currently, the University of Chicago, the University of Michigan and the University of Notre Dame are the only three major university investors not to make a statement regarding the company.
HEI Senior Vice President of Human Resources Nigel Hurst said the company had no comment.
Though no other university has cited labor practices in its decision, Brown's decision influenced the wave of statements regarding HEI, said Riddhi Mehta-Neugebauer, a research analyst at hotel and restaurant labor union Unite Here.
"To have a key Ivy League investor come down and say, 'We're not going to reinvest until HEI improves its labor practices' - that's huge," she said. "It adds a lot of credibility and a lot of momentum to the struggle."
The decision from Yale also played a role in the trend of statements regarding HEI, Mehta-Neugebauer said.
"In the endowment world, whatever Yale does really kind of sets the tone for the endowment arena," she said. "So that really set the standard among universities regarding what to do with HEI."
Sandra Korn, a member of Harvard's Student Labor Action Movement, said the decision from Brown and subsequent statements from other universities added strength to the group's campaign against HEI.
"It definitely lent a lot of urgency to this call," Korn said.
The Student Labor Action Movement also coordinated with student groups from other universities, including Brown's Student Labor Alliance, Korn said.
"People from the Brown group had kind of won the campaign, so they came to Harvard to tell us what been successful, what had not been successful," she said.
Both Korn and Mehta-Neugebauer said though Harvard's decision did not explicitly cite labor practices, they would be surprised if the allegations against HEI did not factor into the decision.
Harvard released a statement last December announcing that it would investigate HEI's "business practices and policies, including labor relations" and would factor "all relevant circumstances" into any decision regarding reinvestment.
In the context of that statement, Korn said she was "a little bit surprised" Harvard only cited financial considerations in its decision but added that she could only presume the Harvard Management Company looked at labor practices as well.
"It was either under pressure from their own moral pressures or the moral pressures of their constituents - the Harvard students and alumni," she said.
Mehta-Neugebauer also suggested a link between the publicity the issue has garnered and the decision not to reinvest.
"You can't deny that every university that has made this announcement has had a multi-year effort by students," she said. "And the reason for that has been the labor practices at HEI hotels."
In an email to Harvard President Drew Faust, Mendillo said the decision not to reinvest was specifically based "not on concerns about HEI's practices."
John Longbrake, Harvard Assistant Vice President of Communications, would not elaborate beyond the email.
Luiz Valente, former chair of the University's Advisory Committee on Corporate Responsibility in Investment Policies, said he was "indifferent to what Harvard does" but thought the recommendation confirmed the validity of Brown's decision from last year.
"Even though HEI had never been convicted of breaking any laws, there was a pattern of allegations involving mistreatment of workers combined with the company's repeated settlements in which they would agree to what was being requested, for example by the union, but not admit any guilt," Valente said.
"I don't think it's a particularly good company," he added.
Though he said he did not want to sound "immodest," Valente said he thought Brown's decision had influenced the wave of university statements regarding HEI.
"Sometimes, someone has to take the lead, and I'm glad it was Brown," he said. "I'm glad we took the leadership position and we made the early decision."
