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Chris Jones

Teamsters Wallkout: Rival Parties Remain Quiet

8 September 2004

Las Vegas' surprising convention strike continued with few new developments Tuesday, a status quo that belied the importance of what's quickly become a serious threat to this city's multibillion-trade show industry.

Leaders of the primary warring factions -- Teamsters Local 631 in one corner; GES Exposition Services and The Freeman Cos. in the other -- stayed quiet Tuesday, the first business day after union members launched a strike against the city's two largest convention contractors.

A source close to the situation said Tuesday neither side has requested new negotiations since contract talks broke down late last week.

Citing disagreements over proposed wage increases and minimum health benefit requirements, union members on Saturday overwhelmingly rejected the two companies' best and final offer; protesters have marched outside several local convention venues since 8 o'clock that evening.

Lost amid the GES and Freeman hullabaloo were the 20 or so smaller, independent contracting companies whose separate contract proposal was also rejected by the Teamsters despite its significant differences from GES and Freeman's joint offer. That has some small companies wondering what needs to be done to escape the crossfire.

"It's as though there is no other contract, and that's what concerns us," David Arthur, president of Dallas-based Nuvista Events Services, said Tuesday. "We thought we were very close (to reaching a deal with the Teamsters). ... This strike is going to cost this industry a lot of money, and it's a shame it's happening."

This year was the first time smaller contractors -- known in the industry as exhibitor-appointed contractors -- were allowed to negotiate their own union deals outside the bounds of a larger general contractor's agreement.

And while GES and Freeman's proposed three-year pay scale with raises totaling $2.50 per hour was soundly rejected, Arthur said he's perplexed that Teamsters also shot down his group's offer that called for raises of nearly $6.40 per hour over the five-year deal, with little change to the workers' current access to health care and other benefits.

"There's a lot of misinformation and misunderstanding," Arthur said, attempting to make sense of the vote. "Judging by the people that were present at the union hall when they took a ratification vote, there was never any time really spent on explaining our contract or the fact that there was a second contract."

A second exhibitor-appointed contractor, who asked not to be identified for fear of union backlash, said the union is trying to quickly bail out its health and welfare plan at the expense of the contractors.

The source said union leadership asked the small contractors on Friday morning to raise their first-year offer by more than 40 cents per hour to $1.75. Though that increase would have been hard for some companies to overcome, the group agreed because it hoped to reach a pre-strike deal with the union.

Teamsters negotiators on Friday evening said they would need a $2 per hour raise in the deal's first year before they would recommend their members support the offer, the source said. That suggestion was rejected by the exhibitor-appointed contractors, and union membership the next day turned down the $1.75 offer.

Teamsters officials did not return telephone calls Tuesday.

Convention labor is typically divided into several tiers. A trade show organizer such as the Consumer Electronics Association, which produces Las Vegas' annual International Consumer Electronics Show, will hire a large general contractor like GES, Freeman or Champion Exposition Services to handle big tasks like loading and unloading freight, laying carpet or erecting show signage.

Exhibiting companies -- for example, consumer electronics giants Sony or Microsoft Corp. -- would subsequently lease space at the Consumer Electronics Show directly from the association. But when it's time to erect their displays on the show floor, exhibiting companies can use a show's general contractor to service their space, or hire their own third-party company known as an exhibitor-appointed contractor.

In a statement released over the weekend, GES and Freeman said their two companies are responsible for approximately 60 percent of local Teamsters' work hours in Las Vegas' convention industry. The anonymous source challenged that figure, saying GES and Freeman's combined share is closer to 50 percent, with the 80 or so exhibitor-appointed contractors making up the difference. Through June, conventions generated $4 billion in nongaming economic impact in Las Vegas.