Controversy Still Surrounds San Jose Labor Pact

HIL ANDERSON, SENIOR EDITOR
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San Jose, CA – The trade show industry repeated its call for Team San Jose to tear up its new exclusive labor agreement with the local Teamsters union and rewrite it so that potentially disastrous legal implications are removed.

Team San Jose is the not-for-profit organization established in 2004 which manages the San Jose McEnery Convention Center; five other municipal buildings connected to the tourism and convention trade; and includes the San Jose Convention & Visitors Bureau. Teamsters Local 287 has a seat on the 27-member Team San Jose board of directors as do four other labor organizations.

A closely-watched meeting late last week between Team San Jose and representatives of three industry associations ended with Team San Jose agreeing to set its base hourly labor rate of $58.85 indefinitely. However, that was not enough to satisfy the associations representing show organizers and service contractors.

“It is totally inadequate,” said Steven Hacker, president of the International Association of Exhibitions and Events (IAEE).

The situation surrounding the agreement remained fluid as the week began, with Team San Jose and the industry seeking to tweak and nail down various details that would make the agreement acceptable. Officials at Freeman and GES Exposition Services declined comment while they studied the agreement.

Margaret Pederson, chair of IAEE, said the issue would be taken up at IAEE’s September 12 board meeting. “This is a complex set of issues and there are many options available to IAEE that we will want to weigh,” she said. “We will withhold any further comment until after the board has fully considered the matter.”

Hacker and leaders of the Society of Independent Show Organizers (SISO) and the Exhibition Services & Contractors Association (ESCA) met with Team San Jose President & CEO Daniel Fenton August 27 to urge a suspension of the agreement, which made Teamsters Local 287 in San Jose the exclusive labor provider for the San Jose McEnery Convention Center as of August 1.

Fenton declined to suspend the deal, but agreed to extend the hourly rate indefinitely and also vowed to consider future industry input into convention center operations.

“We listened carefully to what their concerns were and determined we needed to clarify that essentially we were delivering the labor at cost and that the motive behind this program was not increased revenue or profit,” Fenton told Trade Show Executive. “The motive is increased flexibility when doing business in San Jose, which should translate to better economics for the decorators and the clients, as well as an increase in our ability to put members of our community to work.”

SISO Executive Director Lew Shomer, who was among the attendees at last week’s meeting, said that San Jose’s failure to bring the industry in earlier in the process had created plenty of bugs in the agreement, many of which dealt with the minutia of labor law. “We don’t have a problem with their intent, but we have a lot of problems with how it was implemented,” he said.

Of particular concern is the potential conflict the agreement may have on existing contracts among show organizers, service contractors and exhibitors that were not necessarily based on an hourly rate of $58.85. “If the service contractors’ rates suddenly go up and show organizers have existing contracts, that’s not good for them because the service contractors will either have to eat it, or they have to pass it on to the organizers or to their exhibitors,” Shomer said.

Other industry concerns include:

  • A potential hole in liability protection. Hacker said the agreement makes organizers and contractors “third parties” who would be open to lawsuits from union members who are injured on the job. “They can collect worker’s compensation from the building, but they can also turn around and sue the contractor and the organizers,” said Hacker. “The legal liability you invite as a contractor is something you have to be sheltered from.”
  • Less ability to pick and choose the workers. Fenton characterizes the Teamster labor pool in San Jose as experienced in trade show operations; however, the workers dispatched by Local 287 may not necessarily have been trained by the contractors.
  • Drug and alcohol testing. While testing is in place, the program is not under the authority of the contractors.
  • The “indefinite” nature of the $58.85 per hour pay does not include a minimum. “It could mean it ends tomorrow,” said Shomer. The rates also take a significant jump if labor is ordered less than two weeks in advance.
  • Local 85. The San Francisco Teamsters local formerly provided workers for the San Jose McEnery Convention Center and still has standing agreements with contractors in place. Fenton said the pact with Local 287 takes precedent over previous agreements with service contractors. Service contractors are not convinced they won’t be sued by Local 85 for not hiring its members, or be targeted by picketing or even job actions in San Jose or other cities.

Fenton said the agreement would not freeze service contractors out of the convention center. Fenton also said that labor in the past had been exclusively provided by Teamsters and that the only entity being left out in the cold was the Teamsters local in nearby San Francisco.

“There was never an issue of labor not being under the Teamsters’ jurisdiction,” Fenton said. “The issue was our desire for them to be ‘our members,’ from our local. It is still the Teamsters who provide the workers as it has been for the last 20 years, but in this environment, it will be San Jose Teamsters,” he said.

Team San Jose intended the new agreement to provide more flexibility for show organizers that would make San Jose more competitive as a venue and, at the same time, provide more work for the city’s Teamsters. Association leaders didn’t disagree over the intent, but warned that by not soliciting the views of organizers and contractors ahead of time, they had created a flawed pact that could drive business away. “This was a thunderbolt to the industry,” Hacker said.

Reach Margaret Pederson at (203) 253-5209 or pederson@optonline.net; Steven Hacker at (972) 458-8002 or shacker@iaee.com; Lew Shomer at (310) 450- 8831 x106 or lshomer@shomex.com; Daniel Fenton at (408) 792-4107 or dfenton@sanjose.org; Larry Arnaudet at (469) 574-0698 or larry@esca.org