At WeWork's "summer camp" in the Adirondacks in late August, electro-funk duo Chromeo played a private concert in the woods. Attendees of the annual getaway — held for the company's staff and tenants — bopped from networking events to archery, zip-line to ropes course, yoga to water-skiing. There were beach balls and pyrotechnics, karaoke and the requisite open bar. The Manhattan-based real estate company, recently valued at $10 billion, literally held a contest to see who could eat the most pie.
WeWork — which leases offices in 16 cities around the world and subleases the trendy workspaces at higher rates to businesses and freelancers — has expanded its footprint and valuation at warp speed since its founding in 2012. But the company's tense relationship with the contracted workers who maintain these stylish offices — the cleaners that wash the coffee mugs, un-clog the toilets, and empty the trash at each of the the company's locations — has made headlines in recent months, as the New York workers campaigned for higher pay and a union, then abruptly found themselves out of work.
In August, WeWork announced it would be reducing its reliance on contractors and move more employees in-house, piloting the change in its hometown of New York and eyeing other locations for the future. While the move towards more stable, better-paying jobs will benefit workers in the long term, the original group of contracted cleaners who organized for these very improvements are worse off than they were before this all began.
In transitioning away from contracted workers, WeWork is following the steps of other startups, including Instacart, Alfred, and Shyp. In the case of WeWork, however, the original workers were not to be re-hired into the new, better-compensated positions. Their story is a case study in how a major tech startup changes its labor force as it grows — or an old-fashioned tale of worker organizing frustrated.
Until last week, WeWork contracted cleaners through Commercial Building Maintenance (CBM) at its New York locations. Shortly after the CBM janitors at WeWork buildings began to advocate for better wages and a union this summer, CBM ended its contract with the company in New York. Rather than switching contractors, a common move in instances like this, WeWork opted to hire employees in-house, for wages beginning at $15 and $18, plus benefits.
The change did not benefit most of the CBM staff that had been servicing WeWork. Of the approximately 120 CBM cleaners, WeWork has re-hired only about 15, while locking out the others, including those most actively working with the union. (BuzzFeed spoke with six former CBM workers who were re-hired; none of whom said they supported unionization.) It filled the other positions with new workers and is still interviewing candidates for a remaining 25 slots.
Service Employees International Union local 32BJ, which had been working with the former CBM cleaners on their campaign, has filed an Unfair Labor Practice complaint against the company, charging them with discriminating against the workers for organizing. In Washington, D.C., and Boston, WeWork continues to employ building cleaners through CBM, which pays workers about $10 an hour without benefits, less than half the industry standard for unionized janitors in New York.
Fresh from the mountain revels, on Sunday, Aug. 23, WeWork President and Chief Operating Officer Artie Minson was on hand at the company's Manhattan headquarters to pump up the new employees who were replacing the workforce of contracted cleaners that lost their jobs.
In an interview with BuzzFeed News, Minson said that the move towards hiring workers as full in-house employees, instead of using contracted labor, gives WeWork a competitive advantage. By investing in workers, with better wages and benefits, Minson expects to see higher retention, lower turnover, and increased training — less churn overall.
As the orientation was set to begin, about a dozen of CBM's newly jobless workers stood floors below WeWork's HQ on the hot sidewalk on 18th street, telling new employees about their efforts and inviting them to sign union cards as they arrived.
Once the new staff were sated with gluten-free granola, custom omelettes, waffles, drinks, and a few rounds of ping pong on Sunday, Minson made a speech about WeWork's mission and their futures. He talked about the fun that was had at summer camp, and how he called his wife to tell her about how "WeWork was going to change the world," when he first toured the company.
Eventually, Minson brought up the former cleaners outside the building. "Some of your friends who worked here for years aren't here today," Minson said. "It may be awkward for you, but really you should be proud."
He told the re-hired workers they were the "best and the brightest," "the cream of the crop," and that all former CBM workers would be interviewed for remaining open positions. Then he started talking about the union.
"I'm a big believer in what unions have done for this country," he said. "Some of my former family members were in unions."
He continued, "Everyone has a legal right to sign a [union] card. When you're thinking, 'Should I sign this card?' I hope you'll feel you've joined something special, and you'll leave here with the feeling you don't need anyone else."
There was a pause.
"How were the waffles?"
One of the workers re-hired by WeWork, Miguel Amigon, 39, said he'd been cleaning with CBM since January, for $11 an hour, while working a second job as a bar-back at a dive called Redemption. Amigon wasn't particularly involved in the union actions, he said, but when he first applied to be a direct WeWork employee and heard nothing, he asked for help from 32BJ, who submitted another application for him. When he got invited to an interview, Amigon wasn't sure whether or not the union had made the difference.
During Amigon's interview, the WeWork interviewer didn't explicitly ask him whether or not he was involved in organizing, but did ask what he did with his free time.
"I asked, what 'free time?' I don't have any free time," Amigon said. "I work."
The same weekend as WeWork's new hire orientation, 32BJ hosted a meeting of the former CBM cleaners, to talk about their options and next steps. Dozens of former workers not re-hired in-house tried to plan for their now uncertain futures. Still hoping they might get their old jobs back at the company, for the higher pay and benefits they had organized for, the cleaners planned new actions — a vigil for their lost work (pictured above) and a picket line.
Trading stories, some cleaners shared cell phone photos of the dirtiest work they'd been charged with. Wilfredo Guzman, 37, showed pictures of a small mountain of soiled dishes in a sink, an un-flushed toilet bowl, and an overflowing dumpster. "You have only four hours to mop, sweep, clean the bathrooms, the elevators, and take the trash out of the basement – for $10 an hour," he said.
Ivan Castellano, 35, said he had cleaned WeWork locations since 2012, even staying on in the same building as the contractor changed around him, after discussing the matter with WeWork employees.
"In my experience, I have a very good relationship with WeWork, and I don't think I did anything wrong," said Castellano. "I'm just waiting to hear their side of the story."
Reflecting after the new-hire training, Minson said that WeWork had been "unsatisfied with their CBM relationship" and that the "low-cost alternative" of contracted labor had resulted in poor-quality results.
"It's crucial that we in-source customer-facing roles," Minson said, emphasizing the importance of cleaning, moving, mail, and front-desk attendants to WeWork's reputation and overall mission. "Five years ago, using contracted workers made sense for the company."
A bombshell decision last week could also soon fundamentally change WeWork's relationship with its contracted workers in D.C. and Boston. On Thursday, the National Labor Relations Board — a government agency that regulates workplace practices and unions — ruled in favor of a broad definition of "joint employer" that could hold corporations responsible for contractors' labor law violations and make it easier for contracted employees to unionize. For WeWork, this means the company could be held liable for the wages and working conditions of janitorial staff in other cities, even though they are directly employed by CBM.
"[I]t was WeWork who paid the contractor who paid our wages," the former CBM workers in New York said in a collective statement. "We knew we wouldn’t get fair pay, benefits and a voice on the job from CBM if WeWork didn’t agree to pay the higher rate."
WeWork's contract with CBM was costing the company about $15 an hour, with CBM's administrative cut factored in, according to Minson. As to the former New York employees' efforts to organize a union, to achieve the better pay and benefits the company is now closer to offering more workers, he said: "Independent voices among our employees go against everything we stand for as a company."
Though Minson firmly repeated he believed a union wasn't a good fit with WeWork's company culture, he readily spoke of the benefits of unions to family members of his who had been public school teachers, cops, and a great-great-grandmother who had been a switchboard-operator.
To which union did she belong? 32BJ, whose present-day card-signers remained on the street outside WeWork.