A new labor policy at the San Jose McEnery Convention Center has created confusion and concern among exhibition contractors and organizers, but officials at the group that oversees the convention business in the California city, Team San Jose, says the change will ultimately save customers money and improve their experience.

The new policy, which took effect August 1, brings Teamsters labor in-house as an exclusive service of the convention center through an agreement with Teamsters Local 287, based in San Jose. Previously, labor was hired and supervised by the general service contractor. Under Team San Jose, union labor, hoteliers, convention center and CVB officials, and leaders from the arts and business communities, work together to streamline the experience for meeting customers. Fenton says they would not have been able to strike this in-house labor agreement with Local 287 without labor’s involvement with Team San Jose.

The concern is that the major service contractors working in the convention center—GES, Freeman, and Champion—have collective bargaining agreements with another union, Teamsters Local 85, based in San Francisco, explains Steven Hacker, president and chief executive officer of the International Association of Exhibitions and Events, Dallas. Their contracts with Local 85 require that labor be split 50/50 between Local 85 and Local 287. But now, general contractors must use the in-house labor provided by Local 287. The change stems from Team San Jose’s desire to use local labor exclusively rather than split the work with San Francisco labor.

Contractors say the new deal places them in a precarious situation. “It creates an irreconcilable conflict, forcing the contractors to either violate their CBA with Local 85, or not work in the building and violate contracts they have in place with event organizers,” says Hacker. If the contractors do work in the building and, in effect, violate the terms of their CBA with Local 85, they are concerned that they will be picketed or face labor grievances, says Hacker.

Daniel Fenton, CEO of Team San Jose, says the concerns are unwarranted because the new policy takes precedence over existing labor agreements. There wouldn’t be picketing or labor actions, he says, because the local Teamsters Joint Council, which oversees the Teamsters in the region, supports the change. “The Joint Council would have to sanction the picket, and they wouldn’t do that, nor would the South Bay Labor Council, the umbrella labor body within San Jose,” says Fenton. Cindy Chavez, executive officer of the South Bay Labor Council and co-chair of the board for Team San Jose, concurs, saying the new agreement doesn’t violate any other labor contracts.

But Hacker says it is an issue. “In the absence of a formal agreement, who in the world could take that kind of verbal representation as, ‘Don’t worry, we’ve got you covered,’—that’s absurd,” says Hacker.

Cost Confusion The new labor agreement is designed to increase efficiencies and save money for customers, says Fenton. However, the cost of labor is another source of confusion for customers.

Initially, the new rates published in the policy manual called for an increase of more than 50 percent in the base straight-time labor rate. After seeing the rates, Hacker decried the changes in an op-ed piece sent to several news outlets. “San Jose’s new labor scheme is substantially more expensive than the policy it now replaces. Even during robust economic times, it is hard to imagine how these kinds of abrupt and totally unexpected cost escalations could be tolerated.”

But Fenton says that the published rates were inaccurate. “When we first started rolling out the program, there were some rates that were quoted that came out of Team San Jose that were erroneous,” he adds. “We understand the confusion. We are clarifying that with everyone as we speak.”

The actual base straight-time rate is $58 per hour, which is essentially the same as it was before. Initially, this was to be the rate for the first 90 days only, but after discussions with clients, Team San Jose decided to keep the $58 per hour rate indefinitely. The rate is about $1 per hour less than decorators are paying under other Bay area contracts, according to Team San Jose officials.

The new policy includes other work rules that have enabled the first few groups that have held events since the policy was implemented to realize significant cost savings, says Fenton. Among the changes, minimum hours are reduced from eight hours to four hours under the new policy, so groups don’t have to pay for hours they don’t need. Another is a provision that allows for flexible start times. “Whenever the client wants to start, that’s when our team starts,” says Fenton. So the client pays straight-time rates for an eight-hour day, whenever it starts, even if it’s 11 a.m. Previously, straight time was 9 a.m. to 5 p.m., so hours outside of that were charged overtime. “It makes San Jose more flexible and, quite frankly, makes us more competitive in terms of what we can offer clients.”

However, Hacker believes that cost is a concern as well as work rules that affect liability and workers compensation. These issues, along with the jurisdictional concerns, make the new policy ill-advised and inadequate, he says.

Officials from IAEE, the International Center for Exhibitor and Event Marketing, the Exhibition Services & Contractors Association, and the Society of Independent Show Organizers met on August 27 with senior executives at Team San Jose asking them to suspend the new policy so they could discuss these concerns and resolve them. Team San Jose offered some concessions, like offering the $58 per hour base rate indefinitely, but refused to suspend the policy.

He will bring the matter before the IAEE board when it meets next week and decide what action to take, if any, to address these concerns. “We’ll have a number of options that we’ll be examining,” says Hacker, who refused to elaborate before meeting with his board.