MPEA appeals District Court ruling to overturn labor reforms

On March 31st, U.S. District Court Judge Ronald Guzman ruled to overturn some of the labor reforms enacted by the Illinois General Assembly last May for McCormick Place. As a result of the ruling, the federal judge will enter a permanent injunction prohibiting the enforcement of the labor reforms contained in Senate Bill 28.


The lawsuit was brought by the Chicago Regional Council of Carpenters and the Teamsters Local 727, who contend that the bill attempts to override collective bargaining agreements and tip the balance of power in favor of employers.

“We are very pleased with the judge’s decision,” said Frank Libby, president of the carpenters union. “The men and women working these shows are only compensated for hours worked. These are not 40 hour per week jobs. The ruling supports our efforts to challenge the General Assembly’s attempt to legislate tradeshow workers out of the collective bargaining process.”

“It was a long, difficult road, but in the end, justice was served,” said John T. Coli, secretary-treasurer of Teamsters Local 727, which represents hundreds of tradeshow workers. “We vowed to fight for our members every step of the way no matter what, and that is exactly what we have done.”

Local 727 spent more than $150,000 in litigation fees over the past 10 months to fight the legislation after filing a lawsuit in federal court on June 7, 2010.

“The only ones who were asked to make concessions were labor organizations,” said Coli. “Legislators let their own feelings of panic cloud their judgment and they bowed to the tradeshow managers. Workers shouldn’t have to suffer because of that shortsightedness.”

Officials at the Metropolitan Pier and Exposition Authority, the agency that owns and operates McCormick Place, believe the ruling is faulty in several ways and consider it a step in the wrong direction.

“All of us at the MPEA are greatly disturbed at (Thursday’s) ruling by the U.S. District Court overturning the labor reforms enacted by the Illinois General Assembly,” said Jim Reilly, trustee of the MPEA. “As all observers of the convention and tradeshow business are aware, the implementation of those reforms has, virtually overnight, transformed McCormick Place from a great convention and tradeshow facility that was rapidly losing its customer base into an industry powerhouse.”

The MPEA cites several shows that have returned to McCormick place after the new legislation was put into effect as proof the reforms were working. Some of those shows include the International Housewares Association show, the International Manufacturing Technology Show and the National Restaurant Association show.

The Chicago Regional Council of Carpenters believed more direct proof was needed.

According to the Council of Carpenters, the Federal Judge ruled in its favor because the MPEA legislation does not guarantee cost savings will be passed on to exhibitors and the goal of reducing exhibitors’ costs were “left largely to the contractors’ discretion.”

Libby hopes this decision will reopen discussions among all the shareholders who work or do business at McCormick Place.

“I see this ruling as an opportunity to work toward finding a much-needed, long-term, practical funding solution,” said Libby. “A solution that doesn’t look to blame anyone and that requires the cooperation of all the tradeshow industry stakeholders. We remain ready and willing, as we always have, to begin a dialogue with the city, exhibitors, contractors and show managers to develop a long-term solution to the issues plaguing the Chicago tradeshow industry.”

Illinois Senate President John Cullerton, who helped lead the negotiations for the new work rules under Senate Bill 28, remains proud of the results brought on by the labor reforms.

“After overhauling the union work rules at McCormick Place, cutting bureaucratic red tape and lowering costs for conventions, the results were immediate,” stated Rikeesha Phelon, press secretary for Cullerton. “Conventions are returning and bringing an estimated $1 billion in consumer investment to Illinois.”

The MPEA has already asked the U.S. District Court to stay execution of the order issued by the court pending appeal to the 7th U.S. Circuit Court of Appeals.

“We are confident that we have ample grounds to support this request and are hopeful the ruling will be overturned on appeal,” said Reilly. “These reforms have had a strong, positive impact on the economy of Chicago during these difficult economic times.”

The ruling does not affect a portion of the State law that allowed the MPEA to restructure its capital debt, thus resulting in the MPEA’s ability to lower costs in areas such as food prices. Unionized electrical contractors can also still compete with the MPEA’s in-house electrical service provider for show contracts.

The ruling also does not affect the MPEA’s ability to move forward with the construction of the additional tower at the Hyatt Regency McCormick Place Hotel.