After unionization flap, $10 billion startup WeWork changes its policy for how it hires cleaners

WeWork

WeWork has come to a "shared understanding" with a branch of the Service Employees International Union over who the company will hire for custodial duties at its office spaces in New York and Boston.

On Tuesday, the four-year-old startup, which divides and rents out large office spaces to other businesses, said it would commit to hiring union represented janitorial staff in the two cities.

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The company additionally said in a press release that it work with union contractors to rehire former Commercial Building Maintenance - its current maintenance provider - cleaners "whenever possible," after many lost their jobs when CBM terminated its New York contract with WeWork in August.

For any cleaners that don't get rehired, they will receive a portion of the $250,000 severance set aside by the co-working space startup, which will be divided by time spent with the company before the layoffs.

"We appreciate that WeWork engaged in a constructive dialogue with us to ensure good cleaning jobs in New York and Boston," said SEIU 32BJ President Hector Figueroa in a statement. "This agreement is a win for working people and helps maintain the standards for good building service jobs in both cities."

In exchange for hiring union contractors, both parties resolved a charge the SEIU filed with the National Labor Relations Board.

WeWork, recently valued at $10 billion, felt the heat when a group of CBM workers in New York alleged the startup threatened to fire them when they attempted to unionize back in June.

While a unionized cleaners in New York can make $23 an hour and $17.30 an hour in Boston, both including benefits, WeWork cleaners were starting at just $11 an hour.

Someone close to WeWork, which has a total of 17 locations around the world, said the company is considering extending the commitment to other US cities in the future, but is beginning the program in these two location.

"We pride ourselves on being great partners and we are pleased that we were able to develop a win-win partnership with 32BJ SEIU," Artie Minson, WeWork President and COO, said in a statement. "This arrangement provides a sensible path forward that allows us to focus on our top priority: providing the best possible experience for our members in a way that allows their passion and innovative spirit to flourish."