Low occupancy and the recent announcement of the liquidation of the LarrainVial AGF hotel fund are not the only concerns of employees and owners of the iconic Sheraton Santiago, one of the largest hotels in the country. In recent months, they’ve also had to fight in court a sensitive case of wrongful dismissal and violations of fundamental rights against their historic managing director, Carlos “Howie” Brown, for almost 20 years. And all this by sending a so-called meme to a WhatsApp group.
The story began a year ago, at the worst moment of the pandemic, when the hotel was closed due to a constitutional state of exception. Brown (60 years old, Argentinean), Atty. That was when he posted an image to a WhatsApp group called “Exec Comm Lite” made up of the managers of the facility located in Santa María. He published: “According to research by the University of Oxford, the new vaccine against Kovid-19 will have some side effects, but not very serious.” The text was accompanied by a picture of two people—a man and a woman—who had their genitals covered.
Michelle O’Neil and Daniel Téllez Sheraton, senior executives of the ethics compliance department of Marriott International (the parent company), reported in a lawsuit filed on May 25, 2022, in the Second Business Court of Santiago (confidential) on August 4. ‘s owner and the world’s largest hotel chain) came to Chile to coordinate meetings with venue staff. They questioned Begoña Iriondo, director of Sales and Marketing, specifically read in the judicial proceeding; Gabriel Lempesi, Director of Engineering, and Claudia Sánchez, Director of Food and Beverage. Aim? Talk specifically about the content in question shared in the group.
According to Brown, the purpose of the chat was “to maintain sympathy, cooperation and support among members, to improve the atmosphere, to relax, and to confront the difficult moments faced by the management team due to the pandemic.” In his interpretation (which some of the labor law experts consulted by the DF MAS objected) this was not a laboring group, as it was a strictly professional group called the “Executive Committee”. Regarding the posting of the image, the former general manager stated that it was “funny images”.
In personal interrogations, as described in the case, O’Neil and Téllez stated that what Brown did would be considered sexual harassment and posting pornography. After these meetings, they met with the former general manager at the Sheraton at 18:00 on the same day and were informed that the content sent to him was extremely serious. The same day, the rulers returned to the United States. But here the story was just beginning.
On June 1, Brown received a call from his boss, Ricardo Caló (Vice President of Marriott International for South and Central America), informing him that the company has decided to terminate the contract.
“My boss is asking me to resign at the end of June. He says if I open it, my pending permits will be paid and there will be a farewell cocktail, and he says “I’ll be out the wide door”. Otherwise, they will be fired immediately with no compensation and my tainted resume. He also said that the hotel market is very small and everything is known. Why should I ruin my record? So he told me to think about it and give him an answer on Friday, June 3,” Brown says in the case.
That same day, he contacted Caló, the hotel manager at the time, to inform him that he would take legal action against the Sheraton because, in his comment, “there was nothing reprehensible or illegal.” According to the lawsuit filed, the company changed its mind and asked him to continue his duty until he heard from the management.
At the time, the firm’s internal sources state that the situation was already being discussed in the hotel’s corridors. “I did not agree with the submitted image, I do not agree at all. But apparently it was a group of friends and I was surprised by what happened,” says one worker.
Finally, on June 14, Ricardo Caló and Mary Lynn Elizondo, head of Latin America human resources at Marriott International, traveled from the United States to Santiago to formalize the immediate dismissal on grounds of eviction. Managers justified the decision by describing it as sending “pornographic” material. The truth written in the case was akin to sexually harassing female members of the conversation because they had no “opportunity to speak out against.” Eight days later, the parties signed a business relationship agreement. Sheraton paid $104 million.
Before the impeachment took place, and in complete secrecy, Brown decided to investigate the leak of the conversation with his acquaintances in the United States and Chile. “After the hotel became directly subordinate to Servicios Hoteleros Starwood Limitada, I was informed that the new management wanted to make a change and opt out of my services in the most economical way possible,” says the manager.
After a series of conversations, Brown would find important information: a former hotel employee (who had previously been disconnected and joined the conversation) sent all the materials of the group to the CEO of the company in the United States (Anthony Capuano). , also the manager of McDonald’s). “(This) was a kind of revenge against me for thinking I was responsible for his dismissal, which was not true,” the court record states.
“The information contained in the WhatsApp group, which was displayed to the workers interviewed for information with the aim of trying to accuse me of an unrealistic behavior, was obtained illegally, in violation of a clear statutory norm of Chilean substantive criminal law.” he adds. .
According to the manager, posting this material was only an excuse to secure his dismissal. On page eight of his case, he explains that his quadriplegic condition (due to an accident in 1999) would trigger his dismissal. “After the hotel became directly affiliated with Servicios Hoteleros Starwood Limitada, I was informed that the new management wanted to make a change and give up my services in the most economical way possible. This is because my physical disability is viewed as an inadequate image by some senior bosses and gives the impression of a lack of professionalism for a general manager in front of customers and new staff,” the manager explains in the letter.
In addition to condemning the violation of his fundamental rights, Brown blamed unfair dismissal and great economic damage. He stated that since 2002 unemployment insurance premiums had to be paid and $56 million was demanded for non-payment of bonuses. Likewise, he demanded 150 million dollars in moral compensation and 33 million dollars in compensation. A total of $314 million was requested.
At a preliminary hearing on September 13, Brown offered to pay $160 million to reach a frustrated settlement.
In September, the hotel’s response, backed by lawyer Fernando Santibáñez, came. In the document, Sheraton points out that Brown conducted “a harassing exercise” and “cited throughout her complaint a series of facts that lacked certainty or specificity.” They also affirmed that the former chief executive had little justification to justify moral damage, as well as confusing notions of workplace harassment with the impact of the right to mental and physical integrity.
Regarding the leaks of the chats, the company clarified that they were “not subject to any interference with private communications and/or illegitimate or arbitrary eavesdropping.”
Regarding Brown’s thesis (which stated that his dismissal was due to his physical condition), the hotel categorically denied it: “It’s interesting, at least, that he intended to support the idea that the actor was ultimately discriminated against. Not only because of the messy and imprecise nature of his claims, but also because of the litigation Brown’s injury should be considered a suspect category when a business relationship between my client and my client has lasted for nearly 30 years and a distinction is never made to harm Mr. • Player”.
In economic terms, the hotel denied that it owed unemployment insurance payments or any other items mentioned in Brown’s complaint. They also reminded that the 104 million dollar deal was signed.
When one of the hotel owners consulted with Marriott International (which is a shareholder of the LarrainVial fund), they responded to DF MAS that “we will not be talking about any current legal process or even a former official.” This psychic also contacted the lawyer representing the company, but received no response.
In any case, experts in the judicial process comment that the case is not over yet: “The parties are very firm in their positions.”
The lock date will be in six months. The trial hearing will be held on May 12, 2023 at 11:15 am, with a number of key witnesses presenting their accounts and the episode will be closed.
It has been reported that the vehicle in question will be liquidated after the last meeting of the contributors to the Hotel Investment Fund of LarrainVial Activos AGF, whose portfolio includes Crowne Plaza, Intercontinental, Ritz-Carlton and Sheraton hotels. . Reason? The minimum equity requirement of 10 thousand UF set by the Financial Market Commission (CMF) was not met.
This is despite an improvement in the occupancy numbers of the four hotels over 2022. In fact, between January and September, Sheraton Santiago averaged over 40% per month. However, they were unable to overcome the 50% barrier that the Ritz-Carlton and Intercontinental set during certain months of the year.
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