An Historical Perspective
The vivid history of struggle for labor unions in Northeastern and Midwest cities left a legacy of distrust and resentment but also a feeling of empowerment as wages, benefits and living standards all improved for union members. Strong union leadership came to influence and intimidate political leaders. Reactions to threats such as non-union participation in large construction projects or service workers in urban cores were loud, confrontational and mostly, successfully opposed. As union membership declined nationally their membership held. Aggressive negotiating tactics and the threat of strikes were modus operandi. These strategies survived later generations of union leadership up to and including the building boom in urban convention centers in the 1980s and 90s.
So it is no coincidence that convention centers could be said to be genetically tied to unions. In the years of new and expanded convention centers, finding financial resources needed to build new was a formidable task. Political leaders therefore:
- Dealt with the financial issues by garnering vocal political support and labor unions could always be counted on.
- Understood that the quid pro quo for union support has been continued employment relating to convention center operations – so many convention centers are born with union labor at their side.
- Created an environment where convention center management often carried the recognition that unions have political clout, enough to make managers unlikely to push hard for change. Without support, the unreasonable demands and bad habits that unions carried were rarely challenged. Tradeshow contractors through a local trade association negotiated Collective Bargaining Agreements (CBAs) and administered the same to most of the convention center work forces. Their attitude was similar to the convention center management’s – they felt that the unions occupy a stature not easily contested.
We know now that these agreements and how they are managed day to day are a key element to a convention center’s business reputation. If things go badly the convention center and the city suffers damaging publicity, rarely are the trade show contractor’s associations held accountable. For some cities things did go badly:
- Detroit’s convention business, already a hard sell in the 1980’s, turned into the lowest occupancy of any major city, largely due to union excess.
- During the same period in New York City, the leadership position as the city with the biggest and the best shows quickly changed. New York’s problems took on notoriety as organized crime infiltrated the unions. The Javits Center became the worst example of union labor problems – mobbed up, featherbedding to excess, with organized theft on the exhibit floor and loading docks, payroll and insurance fraud and worse.
- Chicago’s McCormick Place and the Pennsylvania Convention Center in Philadelphia were not far behind.
Union leadership had become the de facto managers of convention centers.
How did this happen? Too often management forfeited control of hiring decisions, production schedules, work rules and nearly everything else that governs an orderly productive work force. It came to be that event managers insisted that union shop stewards participate in event planning meetings – they knew where the power to set up an event efficiently and peaceably resided. What occurred was a sorry history of appeasement and indulgence to union demands. There was a purposeful and persistent avoidance of confrontation. In sum, there was no will to make things right.
Meanwhile in the convention center boom of 1980s and 90s, centers opened or expanded in “right to work” states of the South where there was lower labor costs and an absence of strong union culture. Quite rapidly the business advantages of southern and western cities became clear and convention centers in the Northeast and Midwest began to lose market share. West coast convention centers which were union buildings, such as the Las Vegas Convention Center, the Sands Convention Center, Moscone Center in San Francisco and the San Diego Convention Center thrived also. One big differentiator was and is that customer service was simply better in the South and West. It was apparent that the hard-edged “us vs. them” union culture wasn’t present – they were and are friendly, polite, reasonable, helpful, with no shop stewards enforcing “rules”. Managers from the large freight and decorating companies have spoken openly about how cooperative labor is in Anaheim, San Jose, San Francisco, San Diego, Phoenix and Las Vegas. Company managers could concentrate more on show production and service. In these cities the union wage and benefits paid were comparable to Chicago and the East coast and the decorating/freight moving contractor’s business model was the same. By most measures New York and Chicago had similar competitive appeal, yet Chicago and New York still lost market share for the best shows.
Customer service and prevailing business expectations of service were something that unions were loath to understand and accept. Innovative and emerging businesses like information technology or the health sciences were generally non-union companies. They were conscious of the marketing investment required to participate in a tradeshow, convention or conference. Their focus was and is all business, and they were put off when confronted with service that was indifferent, expensive, and often corrupt. Why tolerate this when there were alternatives? It didn’t take long for show managers to move their events to other places. They abandoned traditional market locations in part to save their exhibitors from union labor. But change was in the wind and New York’s Javits Center was first.
The Tipping Point
In the Spring of 1995 we were fortunate to be part of a team that planned and executed taking over all labor contracts at the Javits Center. Some were held by the NY Exhibition Contractor’s Association. Labor reform was only part of steps taken to turn around Javits Center’s declining business but it was by far the action that sticks in everybody’s memory. It was clear to most that the business decline and sordid reputation had reached a point where the hospitality businesses in the city were primed and ready for something radical to occur.
In the beginning of 1995 press reports about Javits Center mismanagement and presence of organized crime in the work force were common. The points below describe the environment we had going in:
- We had strong political support. NY State’s new governor at the time, George Pataki, knew of and fully supported our plan
- Two of the unions were being investigated for corruption and under some type of federal or court mandated supervision.
- Before contract negotiations began the unions accepted three important conditions; overlapping work jurisdictions were over, there were to be two principal work forces- one for exhibit building and the other for freight moving, and; the Javits Center could hire from any source.
The Javits labor reform plan was executed swiftly. Once launched, in one week’s time there was an entire new work force with the following:
- No overlapping work jurisdictions or composite crews
- Hiring requirements administered by the Javits Center covering personal appearance, customer service attitudes and skill
- New work rules, service, integrity and productivity standards
- 24 hr, straight time labor, M thru F
- Apprentices added to the carpentry work force without prescribed ratios to journeymen
- Broad management rights; management would decide on crew sizes, multiple shifts and flexible start times for carpenters, who would work overtime, etc.
Within one year center occupancy improved from 35-40% to 60-65%.
How to Negotiate a CBA that Fits the Convention Center Business Model
The narrative below focuses on the Javits Center CBAs developed in the mid 1990s as the best example of agreements that were designed specifically to fit the event business. There are no construction work rules, required union referral for labor, special work jurisdictions, supervision and apprentice ratios or double time wages. It covers all the major sections that should be added or amended from existing CBAs in order to achieve meaningful structural change. The Javits Center agreements and business aftermath did not forfeit any work to others, retained the general administrative management functions for exhibit building (Carpenters) and freight moving (Teamsters) work forces and charged an hourly fee to contractors for hiring them. In their labor reform McCormick Place forfeited electrical services and permitted exhibitors to do a major fraction of exhibit building – perhaps good for show managers and exhibitors but a major loss of revenue for McCormick Place and trade show contractors. In the Pennsylvania Convention Center’s labor reform, the problems of overlapping jurisdictions and a generally unmanageable carpentry work force were solved to a point. However, there still remains a pending appeal by the carpenter’s union via the state’s public labor regulators.
The Javits Center CBAs are different in that all the CBAs are held by the center. For contract labor (the work that General Decorating contractors and EACs do), contractors hire from the Javits Center. The center manages the contract, does all the payroll and administrative functions, hires and fires, conducts training, provides uniforms, etc. In most other convention centers the trade show contractors association normally hold the carpentry and freight moving contracts while the convention center holds the utility services contracts. The advice and counsel given below can be applied to both circumstances.
Preparing for Negotiations
If you’ve experienced union labor problems at convention centers there is a familiar pattern of conditions that evolves. Firstly the CBA is generally modeled after city-wide construction agreements and gives unions too much control:
- Labor assignments are by union referral only
- There are jurisdictions within jurisdictions for specialized work all requiring one or more levels of supervision.
- There are ratio limits for the use of apprentices who are often unavailable.
- The wage and benefit packages are expensive with benefit loads exceeding 50% of wages.
More harmful to management however are the subtle and insidious ways the union can expand and exercise power and control:
- Friends and family of union leadership will begin to occupy supervisory and shop steward positions
- Union stewards will slowly move into making a few then many management decisions over the work force
- Customer service standards will become secondary; complaints will bubble up; bad publicity will follow and market share will erode.
Our experience is that the local service contractor’s association views organizing for the hard task of a contract dispute or prolonged negotiations too big a business risk. For a convention center, you have reached the tipping point –something structural and meaningful has to happen. If a labor take-over by a convention center is being considered, it will require strong political and business support and a management team that can plan and execute well.
In most circumstances, unless the union side is business-savvy and enlightened, there is likely to be no material or radical change on either side of the table. That is normally the case until there is a compelling reason to change and a resolute desire to change things by the convention center. Publicized scandal, corruption, and a severely declining business environment are compelling reasons. A well prepared management negotiating team will recognize and exploit these situations. Most of the public believe that negotiations are a series of proposals and counter proposals about wages and benefits, but there are issues equally important to obtaining a favorable CBA. These issues revolve around trade jurisdictions, management rights, and literally all the routine things that control the conduct of work and productivity of the work force. For every fraction of increase agreed to on wages and benefits there should be a comparable fraction taken in order to achieve a more effective level of management control and a diminishment of onerous, non-productive and often silly work rules.
There should be a standard check list to prepare for these negotiations. First and foremost however, you need to have a clear buy – in from the center’s Board of Directors and the politicians that appointed them. Unless the unions are large and sophisticated represented by legal counsel, you can generally rely on them being unprepared. Know the personalities. Mostly unions will send a local business agent to negotiations. That individual will come with one or two key employees, one the shop steward. You should be thoroughly prepared with:
- Lost business/declining business statistics
- Customer complaints
- Samples of bad publicity mentioned in the press
- Employee statistics; productivity, absenteeism, sick time statistics, workman’s compensation claims, etc.
- Business facts regarding your competitors
- Union work rules at competitive convention centers
- Insist that the unions provide copies of all their CBAs with other employers for maintenance and construction.
Union business agents will normally begin with a series of unreasonable demands and petty complaints. Expect some sermonizing on their part. So be patient, let the drama pass and wait to ask when they will be ready to seriously negotiate. Hold off on submitting company demands as long as you can – let all the unacceptable and unreasonable arguments play out. Stick to your plan and don’t get emotional.
Important CBA Sections
Contract Objective – This section is sometimes ignored as high minded language which no one is likely to use as a basis for dispute. It should contain the usual perfunctory phrases regarding prevention of strikes and lock outs and peaceable settlement of grievances. The language of this section is key however because it sets the foundation of trade union responsibilities and can come up as a management basis for a contract dispute or as a reasonable defense in an arbitration proceeding. The Contract Objective section is the essence of the contract – the union provides enough qualified labor and the employer provides work and pays them fairly. This is no small matter.
Trade Jurisdiction – This is a difficult section and has to artfully written. It’s worthwhile to compose this section as elegantly as possible where a few words and phrases spell out the jurisdictions with clarity. If necessary, difficult ambiguities should be covered in a separate “exceptions” paragraph.
Another item normally covered by the Trade Jurisdiction section is the identification of classifications within a trade (journeyman, apprentice, etc.). Be sparse in any language and phrases, for example, identifying supervision (foreman, leadman, etc.). Quite often by listing all the supervisory classifications, working groups end up with unnecessary and multiple levels of supervision.
Union Recognition – This section normally gives recognition to the union as the exclusive bargaining entity for employees. It’s also a section which can be used to control the activities of union representatives and business agents on your site. It can regulate pre-notification of a site visit, proper credentialing, access, time spent with members, and general conduct on site. Union representatives should not have carte blanche access to your property.
Management Rights – The CBA should in all respects balance employee interests (wages, benefits, overtime, safe working conditions) with employer interests which really involve retention of critical decision making options. On the employer side this is generally achieved by a Management Rights clause. As with the Trade Jurisdiction section, it’s worthwhile to compose this section as elegantly as possible where the words and phrases spell out management rights with clarity.
While we favor the above approach, some legal experts contend that a short list of fundamental rights coupled with all encompassing language is simply not sufficient. Employers want to rely on residual rights. This means that all rights to operate the business are retained except those relinquished by other provisions in the CBA. Legal experts however point to a history and bias of Public Employment Commissions or Authorities where they clearly favor the process of collective bargaining when items such as management rights are vaguely expressed.
Extraordinary Sections to the Management Rights Clause – There are exceptions which require separate mention and emphasis from work rules. At the Javits Center it was accepting gratuities and drug and alcohol testing.
Accepting gratuities has long been cause of much of the industry’s bad reputation. Indeed, convention centers in Detroit, New York, Chicago and Philadelphia have suffered dismal business reputations because this got out of control. Acceptance of a gratuity became a demand in some instances. All cities have largely curbed this abuse but the legacy of bad news is difficult to change. There must be a provision prohibiting acceptance of gratuities and a “no tolerance” standard set, i. e., immediate dismissal. Some cities such as Philadelphia’s separate Customer Satisfaction Agreement or Chicago’s Exhibitor’s Bill of Rights could be considered worthy of separate CBA sections. Drug and Alcohol Testing needs a separate section because it requires a true examination by legal counsel. There are health and personal privacy issues to consider too. Normally authorized testing is permitted on hiring, on a post accident investigation, or when there is strong management suspicion of abuse. Random testing can only normally be done for security workers or fork lift drivers.
Hiring – An ideal “Hiring” section should include the following:
- A provision giving the Employer the right to hire from any available source. This will be aggressively contested but is necessary. Most of the union problems are rooted in a clique of union members who have a strong loyalty to the union and will cooperate with things like customer service initiatives only in the most superficial way. The employer should not be limited by bad choices. Establishment of a probationary period for new employees for a time (1 year is best) after hiring. These probationary employees can be discharged at any time and the discharge not subject to grievance procedures.
- Include a provision which permits a reduction in force. Probationary employees will be first and all others by work performance. If employees are regarded as equal performers, then date of hire will govern.
- The reduction in force provision is often regarded as the “seniority clause”. Certain unions, particularly the Teamsters (IBT), will attach a system for work calls based on date of hire language in this provision. Once established, productivity normally declines and rank and file workers regard themselves as protected. It’s normally not possible to negotiate this out of a CBA with IBT. Interpretations of seniority are the most frequent cause of IBT grievances. At this point a whole new series of work rules have to be established in order for the Employer to properly control the abuses which accompany work call seniority.
Joint Employer – This section is necessary if the CBA is held by the convention center. It permits others; decorating and drayage contractors, exhibiting companies, and EACs to supervise your employees. To avoid a challenge to the Joint Employer clause, there are some employer obligations that have to be fulfilled. There are some well established and uncomplicated legal tests regarding the a convention center’s level of participation in actually managing and administering the workforce which should clear up and legitimize a convention center holding the CBAs.
Hours, Holidays and Overtime Pay – This section contains the most meaningful terms and greatly affects a convention center’s ability to increase business volume and maximize occupancy. Prolonged event move ins and move outs result in lost opportunity. Event managers will do whatever they can to help their exhibitors avoid overtime and double time. They will even threaten to hold the event elsewhere when the move in and out schedule cannot accommodate their demand for “straight time” move ins and outs. To that end, this section should have provisions covering management’s right to organize multiple shifts, ST wages for the 1st eight hours of work (M-F), one and one half time wages for Saturdays, Sundays and holidays , a training day rate less than ST and several more.
Wages and Benefits – Always controversial, many trade union agreements mirror the wage/benefit package that skilled trades receive in the construction industry. This applies mostly to electricians, carpenters and plumbers. The benefit load sometimes exceeds 50% of the wages. This developed because the unions argued that the construction industry regularly experienced ups and downs. The benefit load therefore had to be high in order to help membership through prolonged periods of unemployment. Unions historically and aggressively insisted that the same package apply to trade show and convention workers and were successful. This is a cause for competitive problems – work forces in non-union or right to work states have much lower labor rates. None of their compensation packages are close to those seen in New York, Boston, Chicago or West coast cities.
The most reasonable expectation is to negotiate against benefit funds that clearly only benefit construction workers or funds that have no material purpose, such as a labor/management cooperation fund. Another benefit fund which may have some prospect of reduction is health insurance funds. As Employers you probably over- pay because many union members must meet or exceed a certain number of work hours per quarter in order to be eligible. Of course many union members do not meet the minimum time required to be eligible, yet as employers you paid the benefit.
Grievance and Arbitration Procedures – Insist on rigid administrative procedures (union responsibility) with respect to timing, meetings and written documentation. Make certain that if these procedures are neglected and not followed, then the grievance is deemed waived. Choose an arbitration organization which does not rapidly move towards arbitration hearings. The longer the process the more favorable it is for the Employer. Most grievances are frivolous and are direct challenges to management rights. Unions have the expectation that the Employer always wants to avoid arbitration and will move towards a negotiated settlement instead. In the long run, a prolonged measured process works best. The point is that union administration is not disciplined enough to meet the filing standards for grievances where deadlines must be met with proper documentation and formats. This is cause to have the grievance dismissed without going to arbitration. The lengthy process is another administrative burden which some unions simply don’t have the time and patience for. They generally lose their enthusiasm for the grievance cause after a long wait.
No Strike, No Lock Out – Spell out all the variations of a work slowdown; sick out, an apparent slowdown measured (in %) loss of productivity, unprecedented malingering, etc.
Past Practices – Be very specific that the employer will adhere to the express terms of the CBA and not be bound by past practices.
Other Sections – Miscellaneous (examples):
Shop stewards – All should be working stewards. Outline conduct and work routine of shop Safety rules and equipment must be adhered to at all times.
Cell phones, ear buds, I-Pods cannot be used during work
If you are successful and obtain some or most of the above recommendations in the executed CBA language, then naturally your management team will have to consistently administer the contract in order to make it useful and effective for your business. This is much easier said than done. It requires a structure of policies, rules, enforcement measures, and training. Then the hardest task of all, it demands no compromise. You would be surprised how swiftly a well negotiated CBA can erode by avoiding stressful situations when the appropriate action is to do the opposite, by unwittingly giving the union management responsibilities like asking the shop steward to choose and obtain extra workers, by deciding not to arbitrate against a grievance regarding a work rule because you may lose or the legal costs are too high. The long term cumulative effect of these and other lapses makes the hard work of negotiating futile. Know this – when you take on the responsibilities as a signatory to the CBA, you own that work force and all the responsibilities which are not only expressed but also implied.
NOTE: Contributing to this article was Andy Peterson. Andy is a Senior Partner at the law firm Jackson Lewis, PC. Andy was the Javits Center’s outside labor counsel in 1995 and was the architect of the center’s original Collective Bargaining Agreements. Andy is still a legal advisor on union labor matters to the Javits Center.
How Can We Help?
Reorganizing and negotiating CBAs that better fit and contribute to your business model can be a formidable task for those who have not been through the process. We can provide experienced advice and counsel and help steer your center’s efforts in re-negotiating your CBAs. Call 203-273-6999 or email email@example.com