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Federal judge throws out McPier labor reforms

Updated: September 24, 2012 6:25AM

A federal judge Thursday threw out labor law reforms at McCormick Place that the state Legislature enacted last year after pleas from the convention industry.

The ruling by U.S. District Judge Ronald Guzman is a setback for efforts to retain McCormick Place shows and recruit new ones with promises of lower labor costs. A lawyer for a union involved in the case said it affirms that collective bargaining rights can’t be overturned by governmental edict.

Guzman told the Legislature “it had no business trying to interfere with collective bargaining,” said Marvin Gittler, an attorney representing Local 727 of the Teamsters. Gittler said the city-state agency that runs McCormick Place, the Metropolitan Pier and Exposition Authority, used the General Assembly to enforce concessions it could not get in bargaining.

Guzman held that the National Labor Relations Act pre-empts the Legislature from dictating terms for unions working at McCormick Place. His ruling let stand other aspects of the reform involving the authority, commonly called McPier because it oversees McCormick Place and Navy Pier.

Unaffected by the ruling are plans to bring the lakefront convention complex under private management and to spin off oversight of Navy Pier to a new nonprofit corporation.

Lawmakers approved the sweeping changes last May over a veto from Gov. Patrick Quinn. The politicians acted under intense pressure from business groups who argued that costs were forcing trade show sponsors to leave Chicago in favor of Las Vegas, Orlando and other cities.

Jim Reilly, the trustee that the General Assembly appointed to run McPier, said he was “greatly disturbed” by the ruling and promised an appeal. He also said the agency will ask Guzman on Monday to stay the effectiveness of his ruling.

“As all observers of the convention and trade show business are aware, the implementation of those reforms has, virtually overnight, transformed McCormick Place from a great convention and trade show facility that was rapidly losing its customer base into an industry powerhouse,” Reilly said. “Not only were out existing customers convinced to keep their events in Chicago, but new shows have been rapidly signing up, and these reforms have had a strong impact on the economy of Chicago during these difficult times.”

Several trade shows, including the International Housewares Association and the Healthcare Information and Management Systems Society, recommitted to the Chicago site, citing the reforms.

David Causton, general manager of McCormick Place, said the ruling negates three changes McPier has implemented. He said they are rules that let exhibitors set up their own booths with simple tools, pay only straight time for union help during an extended period each day, and drive small utility vehicles for convention set-ups and take-downs.

But Causton emphasized that other cost savings measures can proceed, particularly for food service and unionized electricians. McPier now lets other unionized electrical contractors compete with its in-house service, and the state law let the agency refinance its debt so it could afford to cut food prices.

“It’s a blow,” Causton said of the ruling. “We’ve been operating this way since last Aug. 1 and we’ve gotten a lot of good will and re-signed a lot of customers for future shows.”

Guzman made his ruling in combined suits brought by Local 727 and by the Chicago Regional Council of Carpenters.

The judge attacked the legislative rationale about cost control. “Despite its breadth, it’s not clear that [the reform bill] advances the state’s goal of reducing exhibitors’ costs,” he wrote.

Guzman noted that exhibitors, companies that rent space at a show to tout their wares or services, don’t pay for union work directly but are billed for it by show contractors. Without intruding on labor relations, the General Assembly could have limited contractor markups on labor or regulated the profit McPier gets from facility rentals and parking, the judge said.

Causton said exhibitors have provided “anecdotal evidence” that they are saving money. He also said McPier will soon begin audits of its shows to ensure that contractors, who are important middlemen in the industry, pass along labor savings.

In response to the ruling, Senate President John Cullerton issued a statement defending the reform. “Conventions are returning and re-upping, bringing an estimated $1 billion in consumer investment to Illinois,” he said.

Senate Minority Leader Christine Radogno said, “We are hopeful the authority wins a quick stay and that the decision is overturned on appeal. The bipartisan legislation passed by the General Assembly is critical to the viability of McCormick Place.”

Since the reform law was approved, the International Manufacturing Technology Show, which has held its trade shows at the convention center since 1947, recommitted to three more shows through 2016. Other shows that have recommitted are the American Academy of Ophthalmology; the American College of Cardiology; the Society for Neuroscience, and Lions Club International.

Contributing: Staff Reporters Dave McKinney and Sandra Guy

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