01 Sep 2009
Exhibitors and Event Marketers Face Substantially Higher Costs for Doing Business in the San Jose Convention Center
San Jose, CA - 1 September – Despite meeting face-to-face with exhibitions and events industry executives to discuss the abrupt announcement made by the San Jose Convention Center (SJCC) to bring labor in house as an exclusive building service provided by Teamsters Local 287 (San Jose), negotiations have faltered and exhibitors and event marketers are facing substantially higher costs to do business at the SJCC.
A meeting held between the SJCC, The International Center for Exhibitor and Event Marketing (ICEEM), the International Association of Exhibitions and Events (IAEE), the Exhibition Services & Contractors Association (ESCA), and the Society of Independent Show Organizers (SISO), was unsuccessful in negotiating a temporarily suspension of the in-house exclusive service agreement. As a result, exhibitors and event marketers will face the following:
Increase in Base Labor Cost
The possibility of 40 to 50 percent increase in base labor costs to end users. Additionally, new rules outlined in the plan would add additional costs for non-working supervisors and would also reduce flexibility - e.g. no labor can be ordered after 3:00 p.m., no phone orders, and orders will not be guaranteed with less than 24 hours advance notice. A preliminary comparison of the rates reveals that the current base rate for teamster labor under the agreement negotiated by major general service contractors is $55 an hour. In comparison, the SJCC base rate is $86 and does not include any markup that contractors will have to make to cover their own higher costs.
New Legal Liability Issues
New liability issues will be possible for injuries sustained by labor, exposing exhibit management, exhibitors, organizers, exhibitors and contractors to liability claims for injuries sustained by teamsters of Local 287. SJCC proposes to be responsible for the teamster labor and is therefore shielded from these liabilities but others are not. Typically these injuries would be provided by under Worker's Compensation laws.
Conflicted Labor Unions
Conflicts will possibly arise from binding collective bargaining agreements now in place with both Teamsters Local 85 (San Francisco) and Teamsters Local 287 (San Jose). The decision by SJCC to take Teamsters labor in-house exclusively using Teamsters Local 287creates a serious jurisdictional and contractual conflict which would certainly lead to grievances filed with the National Labor Relations Board (NLRB) triggering a work action response from the International Teamsters Union.
Precarious Financial Position for Exhibitors and Exhibit Managers
Exhibitors and exhibit managers who planned to use the SJCC in the coming months will be forced to reexamine their established budgets which will be directly impacted by the abruptness of the announced plan. Fixed budgets had been based upon costs and rules that now are invalid. Many will have no alternative but to pay substantially higher costs.
ICEEM Interim Chairman Bob Dallmeyer, CEM, said, “Even in normal times, cost escalations and abrupt policy changes would be difficult if not impossible to justify. Coming in these troubled times, the prospect of substantially higher costs as well as new punitive work rules are backbreaking.”
ICEEM salutes the over-arching IAEE Policy Statement on In-House Exclusive Service Contracts which urges exhibition management, service contractors and facility management to promote and maintain competition in the market place by avoiding in-house exclusive service agreements in all but the most essential services that bear on the health, safety and welfare of attendees and exhibitors.
As negotiations continue to evolve, ICEEM will communicate the impact on the exhibitor and event marketing community immediately.
About The International Center for Exhibitor and Event Marketing
Created in 2008, The International Center for Exhibitor and Event Marketing (The Center) is a virtual resource stemming from a collaboration of industry organizations and leaders to provide a powerful focal point for the exhibitor and event marketing professional community by serving as a resource for all who are actively engaged in exhibitor and event marketing. Its multi-dimensional approach promotes education and professional development for exhibit managers and event marketers through a resource-rich and interactive Web site at www.iceem.net. The Center provides research, expert views, international perspectives and face-to-face meetings and supports building strong business relationships to achieve the highest level of exhibitor and event marketing excellence. The Center is made possible through the generous support of TS2 – Total Solutions Marketing for the Exhibit and Event Professional. For more information, visit www.iceem.net, powered by ASP.
