The firing of 98 housekeepers at three Boston-area Hyatt hotels has created a storm of protest. Hotel workers, supporters, and politicians have rallied outside Hyatt properties in Boston and Chicago, at least one group canceled its meeting, and Massachusetts Gov. Deval Patrick has threatened a state employee boycott of the properties if the workers are not rehired.

Editor's note: An update to this story has been posted. It includes Hyatt's recent decision to provide for new jobs for the laid-off housekeepers. Following is the background story leading up to that decision.

The controversy started at the end of August when Hyatt laid off 98 housekeepers at three properties in Boston—Hyatt Regency Boston, Hyatt Regency Cambridge, and the Hyatt Harborside. The company outsourced the jobs to an Atlanta-based company called Hospitality Staffing Solutions in an effort to cut costs. “The difficult decision to outsource the housekeeping function at our Boston properties was made in response to the unprecedented economic challenges those hotels are facing in the current business environment,” company officials said in a statement released September 18. The hotels made other staff cuts in addition to the housekeeping workers.

Half of the housekeeping jobs at two of the three Boston Hyatts had already been contracted out to HSS several years ago, the company stated, so this was a continuation of a plan to outsource all housekeeping jobs. The new housekeepers are from the Boston area, the company stated.

On September 18, hundreds of hotel workers, supporters, and politicians held a rally in front of the Hyatt Regency Boston to protest the terminations. The fired housekeepers were not part of a union, but Janice Loux, president of Unite Here Local 26, which represents Boston hotel workers, was at the rally, calling for Hyatt to reinstate the housekeepers. Congressman Michael Capuano (D-Mass.) reportedly called for a boycott of Hyatt properties. According to reports, Hyatt required the fired workers to train the new employees without telling them they would be their permanent replacements. However, Hyatt denies it. “The transition to contract housekeeping services was not sudden and secretive,” company officials said in a statement.

Further, the National Employment Lawyers Association canceled its fall seminar at the Hyatt Regency Boston, planned for October 23–24, because of the firings. NELA President Bruce Fredrickson said the association “cannot patronize a venue that is the center of a very serious labor dispute.” NELA is looking for a new venue in Boston to hold the meeting over the same dates.

Hyatt officials responded to the criticism by announcing on September 21 the formation of a task force to provide support for the housekeepers who lost their jobs. In addition to the severance package they all received, Hyatt will provide the workers with healthcare coverage through the end of the year, job-training assistance tailored to each individual, and assistance finding new jobs for as long as it takes. “Throughout this difficult period, we have treated our employees with dignity and respect, but certainly have not adequately communicated that commitment to the Boston community,” company officials said in a statement.

Another twist in the story involves Massachusetts Governor Deval Patrick. On September 23, Patrick said he would direct state employees not to do state business with the three Hyatt properties unless the housekeepers are rehired, according to an article in the Boston Globe. He also communicated this in a letter to Hyatt CEO Mark Hoplamazian, according to the article.

“We are very disappointed by the Governor’s decision to threaten a boycott of our hotels since it directly threatens the 600 associates who work in Hyatt properties and who live and work in Massachusetts at a time when businesses and individuals are cutting back on travel during the worst economic period we have seen in decades,” said Phil Stamm, general manager of the Hyatt Regency Boston, in a statement. “We do not understand why the Governor is putting more Massachusetts jobs at risk instead of working with us to find jobs for employees affected by the realities of these unprecedented economic challenges,” Stamm added.

A rally of 900 union and hospitality workers in Chicago on September 25 was organized, in part, to show solidarity with the Boston housekeepers. About 200 protestors were arrested outside the Park Hyatt Chicago, according to the Chicago Tribune.

Joe McInerney, president and CEO at the American Hotel and Lodging Association, said outsourcing of housekeeping functions is rare. “We’ve seen outsourcing of housekeeping at smaller properties, but we’ve never seen it at this level." He isn’t aware of any other major hotel chain that outsources housekeeping. “If any major hotel company is thinking about it, they might have second thoughts just on the negative publicity that came out of this.”