Palo Alto hotel laid off full-time staff and brought in contract workers

When dozens of service workers at Hilton’s Graduate Hotel in downtown Palo Alto were suddenly laid off in April, some were told it was because management planned to close down the restaurant on the ground floor.

To the surprise of former employees, the hotel’s restaurant is still bustling and staffed — with temporary contract workers.

“They told us a few different things about what was happening, but none of those things were, ‘We’re going to keep operating as normal with a full staff of temp workers who don’t have benefits, and we’re getting rid of all of these stable jobs in this community,'” said Helen Cane, a former waitress at the Graduate who was among those laid off.

Cane said she received a phone call on April 14 informing her that her employment at the Graduate was terminated, effective immediately. Cane was not working that day, but she confirmed that several of her colleagues who were at work received the same message in person.

Kitchen staff, housekeepers, servers, engineers and other nonmanagerial positions were all affected by the layoffs, Cane said.

Something that especially confused Cane was that when the April layoffs took place, the hotel was preparing for one of its busiest seasons of the year, from the upcoming Mother’s Day holiday to high school graduations and Stanford’s commencement ceremony. She and other employees had their hands full in the days leading up to the layoffs with tasks such as planning special food and beverage menus, which made the sudden terminations even more difficult.

Another server who was laid off in April after more than a year on the job said she received the call about her termination while she was getting ready for her upcoming shift.

The server, who requested to remain anonymous so as not to risk any future hospitality jobs at Hilton, which owns the Graduate brand, said the news came as a complete shock.

Like Cane, the server said she was told the layoffs were due to the hotel wanting to close its restaurant. But three weeks later, the restaurant reopened with temporary staff. The server said at this point, she and her former coworkers just want to know why they were laid off.

“I remember my phone call, they kept saying, ‘It’s nothing to do with your performance,'” she said. “If it’s nothing to do with my performance, then why are you laying me off?”

When reached by phone, General Manager John Reynolds declined to comment on the layoffs or the replacement of full-time employees with temporary workers. Hilton did not respond to multiple requests for comment.

While Cane began working at the hotel in November last year, she said many of her coworkers who were laid off had been there since it opened in early 2023. Prior to becoming a hospitality hotel, the building used to be the President Hotel, which provided apartments to about 75 low-income residents. Tenants were forced to move out to facilitate Hilton’s revamp of the property, sparking community outcry.

Many residents attempted, unsuccessfully, to delay their evictions by petitioning the City Council to negotiate with Adventurous Journeys Capital Partners, the Chicago-based developer of Graduate Hotels. The Graduate Hotel line focuses on college towns nationwide, and their hospitality services often take inspiration from the nearby universities. In Palo Alto, the common areas and rooms of the Graduate pay homage to Stanford and its many famous alumni through decor and artwork.

Recently, Cane has been passing out flyers to hotel guests informing them about the layoffs and the controversial evictions of low-income residents who paved the way for the Graduate Palo Alto.

“Support the workers. Ask hotel management, ‘Why did you let hotel staff go with no warning?'” the leaflets read.

Former employees have sought help from UNITE HERE Local 19, a union that represents service workers across a number of industries, including hotels. While those at the Graduate were not unionized, the union has been helpful in connecting former employees to unemployment and other job opportunities, Cane said.

In the week after the layoffs, some former employees have been asked to return to work at the Graduate, also as temporary contractors, Cane said. These offers are a substantial pay cut from the full-time employment positions, and the temporary contracts do not come with benefits like healthcare that were previously afforded to employees, she added.

The layoffs and replacement of full-time employees are within the confines of state laws, according to labor attorney Bill Gould IV, who teaches at Stanford Law School. California is an at-will employment state, meaning employers can fire workers at any time and without any justification unless protections have been enshrined in a union contract or individual employee agreement.

Graduate Palo Alto is also small enough that it doesn’t have to provide advance notice for layoffs under the Worker Adjustment and Retraining Notification Act.

However, if former employees can prove the layoffs discriminated against them on the basis of race, sex or other factors, a court could find the action illegal, Gould said. The same goes for if the employees can prove the layoffs were an intentional attempt to prevent unionization.

Cane said that as far as she was aware, hotel staff were not preparing to unionize.

Nonetheless, workers are now escalating their concerns to the city council. Cane spoke during public comment at the June 8 council meeting and urged the city to take action and help remediate the situation.

“I’m angry that a hotel that worked so hard to open in our community did this to the very people who are the face of their hospitality, and I’m urging each of you to use your influence as leaders in this community to convey to the general manager of the hotel, John Reynolds, and the hotel manager’s private equity firm that the Graduate needs to treat the surrounding community with respect,” Cane said at the meeting.

This story originally appeared in Palo Alto Weekly. Riley Cooke is a reporter at Palo Alto Weekly and Palo Alto Online focusing on city government.