On August 31, 2012, the Regional Director of the National Labor Relations Board's ("NLRB") San Francisco, California Region, issued an unfair labor practice complaint, alleging that two Hyatt hotels in San Francisco violated Sections 8(a)(1) and (5) of the National Labor Relations Act by unilaterally implementing E-Verify without negotiating with the union that represents the hotels employees. Hyatt Regency San Francisco, NLRB Reg'l Dir., No. 20-CA-084010 (complaint issued on Aug. 31, 2102).

The complaint was based on an unfair labor practice charge filed by UNITE HERE Local 2 ("Local 2"), which represents the hotel employees and is currently involved in a protracted and contentious negotiation with the hotels' operator for a new contract. The complaint results from the decision by the hotels to unilaterally implement E-Verify. Upon implementation of E-Verify, certain new employees were terminated when the system failed to confirm their legal right to work. Local 2 claims that the decision to implement E-Verify is a mandatory subject of bargaining and that the hotels lacked the legal right to take this action without first bargaining with this union. The NLRB complaint seeks an order directing the hotels to terminate their participation in E-Verify as well as reinstating, and making whole for lost wages, any employees terminated as a result of E-Verify.

A hearing on the complaint is now scheduled to take place before an administrative law judge on October 31, 2012.