Monday, April 18, 2011

Chicago’s McCormick Place (MPEA) Takes Hit from Unions Legal Challenge

In February I published an article recapping the exciting labor rules changes at McCormick Place and Navy Pier (MPEA), in Chicago.  These changes, which occurred with legislation passed by Illinois lawmakers, in 2010, were perceived by many in the Meetings and Events industry as game changing.

“As all observers of the convention and trade show business are aware, the implementation of those reforms has, virtually overnight, transformed McCormick Place. Not only were our existing customers convinced to keep their events in Chicago, but new shows have been rapidly signing up,” he said.” — Jim Reilly, MPEA Trustee

Sadly, it now appears that what was once considered a “done deal,” and a huge victory for Chicago Convention Business, is now open for further debate, in the court system.  On March 31, a US District Court Judge, Ronald Guzman, ruled on parallel cases filed by Teamsters Local 727 and by the Chicago Regional Council of Carpenters.  The court’s judgement overturns some key pieces of the labor reform enacted in May.

So what does this mean exactly?  Well, I contacted Dawn Young, of the Chicago Convention and Tourism Bureau (CCTB), for some clarity regarding the latest developments.  According to Dawn, for their part, MPEA and the CCTB both believe the March 31st ruling is faulty.  MPEA filed an appeal recently as well as a “stay of execution.”  The two buildings are operating as they were prior to the judgement, pending further legal action.

What Are Potential Changes From Unions Legal Challenge?

On Monday, April 4th a webinar was hosted by MPEA and CCTB, led by David Causton, General Manager of McCormick Place.  A lot of really helpful information was shared during this event.  For any show organizer holding, or considering holding an event at McCormick Place, or Navy Pier, it is worth viewing the video recap of this event.

What may change with this ruling if it holds up?  Here is a summary, per my communication with Dawn Young, and the information provided on the video:

  • Straight time labor — is currently expanded to apply during the hours of 6am – 10pm.  With the recent ruling it would revert back to a straight eight hour day.
  • Booth Assembly — Exhibitors, regardless of booth size, are currently able to assembly their own booths if simple tools are used.  Simple tools are defined, in this context as ladders, hand tools and cordless tools.  That may revert back to a scenario where any booth larger than 300 sq ft. will require union labor.
  • Exhibitor Vehicles — currently exhibitors are allowed to drive small utility vehicles directly on to exhibit hall docks for convention setups and tear-downs.  This would no longer apply.
  • Labor Crew Size — Carpenters and Teamsters currently require a two-man crew.  This will change back to a three-man crew.  Note:  Effective January 2012 the Teamsters contract will reduce to a two-man crew, regardless of outcome here.

What Will Not Change?

It’s important to note that several aspects of the reforms enacted are not impacted by the aforementioned legal challenges.  These include cost savings programs in the following areas:

  • Catering Food Service Costno building mark-up of pricing.
  • Electrical Services —
    • unionized electrical contractors can now compete with McCormick Place in-house electric service provider… essentially a bidding process, maximizing cost savings.
    • In-house electricians are available at cost + benefits – no building mark up of pricing.
  • Free WiFi Service — MPEA offers organizations complimentary WI FI throughout the convention centers, including common hallways, exhibit halls and meeting rooms.

This legal battle has put both MPEA and CCTB into an awkward position, as they were understandably not shy in publicizing the labor reform, to help draw business to the city.  Many Event Organizers have selected Chicago as their event site based upon the labor reforms.  It will be interesting to see what happens if MPEA is not successful in winning on appeal to these latest rulings.

Question:  Do you have a show scheduled (or considering it) to be held at an MPEA facility in Chicago?  If the unions win this battle will it impact your decision to choose/not choose Chicago as your destination?  Please share your thoughts with us.

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