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Local 727, International Brotherhood of Teamsters v. Metropolitan Pier and Exposition Authority and James Reilly

March 31, 2011

LOCAL 727, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, PLAINTIFF,
v.
METROPOLITAN PIER AND EXPOSITION AUTHORITY AND JAMES REILLY,
AS TRUSTEE OF THE METROPOLITAN PIER AND EXPOSITION AUTHORITY, DEFENDANTS.
CHICAGO REGIONAL COUNCIL OF CARPENTERS,
v.
JAMES REILLY, AS TRUSTEE OF THE METROPOLITAN PIER AND EXPOSITION AUTHORITY
AND METROPOLITAN PIER AND EXPOSITION AUTHORITY, DEFENDANTS.



The opinion of the court was delivered by: Judge Ronald A. Guzman

(related)

MEMORANDUM OPINION AND ORDER

Local 727, International Brotherhood of Teamsters ("Local 727") and Chicago Regional Council of Carpenters ("Carpenters") have sued defendants Metropolitan Pier and Exposition Authority and its Trustee, James Reilly, alleging that recent amendments to the Metropolitan Pier and Exposition Authority Act, 70 Ill. Comp. Stat. 210/5.4, are preempted by the National Labor Relations Act or otherwise violate federal and state law. The parties to each suit have filed cross- motions for summary judgment pursuant to Federal Rule of Civil Procedure ("Rule") 56. For the reasons set forth below, the Court: (1) grants in part, denies in part and strikes as moot in part both plaintiff's and defendants' motions in the Local 727 suit; and (2) grants in part and strikes as moot in part plaintiff's motion and denies in part and strikes as moot in part defendants' motion in the Carpenters' suit.

Facts

The Metropolitan Pier and Exposition Authority ("MPEA") is a unit of local government created to promote business, commerce and tourism in Illinois. 210 Ill. Comp. Stat. 210/3; (Defs.' Resp. Carpenters' LR 56.1(a) Stmt. Facts ¶¶ 6-7; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶ 1.) Defendant Reilly is its Trustee. (Defs.' Resp. Carpenters' LR 56.1(a) Stmt. Facts ¶ 4; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶ 46.) The MPEA owns and operates McCormick Place, a convention center in Chicago that was built and renovated with state bond money and is used primarily for trade shows. 70 Ill. Comp. Stat. 210/5.4(a)(6); (Defs.' Resp. Carpenters' LR 56.1(a) Stmt. Facts ¶¶ 7-8; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶ 1.)

There are a number of players in the trade show business -- MPEA, the trade show manager ("show manager"), the trade show contractors ("show contractors"), the trade show exhibitors ("exhibitors"), the exhibitor-appointed contractors ("EACs") and the unions -- some of whom have little, if any, interaction with the others. (Defs.' Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. D, Mem. from Reilly to Jt. Comm. MPEA of 3/23/10 ["3/23/10 Mem."] at 4; Defs.' Resp. Local 727's Mot. Prelim. Inj., Ex. B4, 4/28/10 MPEA Legislative Analysis C.H. Johnson Consulting, Inc. at 1-3; id., Ex. D1, Chicago Convention Crisis: A Vacuum of Leadership in the Hospitality Industry, UNITE HERE Local 1; Defs.' Resp. Carpenters' LR 56.1(a) Stmt. Facts ¶¶ 8-11, 24; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶¶ 3-4, 7-8.) The MPEA leases facility space to the show manager and provides food, parking and utility services to the show manager and exhibitors. (Defs.' Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. D, 3/23/10 Mem. at 4; Defs.' Resp. Carpenters' LR 56.1(a) Stmt. Facts ¶¶ 7-8; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶¶ 3, 7.) The show manager subleases the space to the exhibitors and hires a show contractor to move the exhibitors' materials into and around the facility and to set up and dismantle the exhibitors' booths and the common elements of the show. (Defs.' Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. D, 3/23/10 Mem. at 4; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶¶ 3, 7; Defs.' Resp. Carpenters' LR 56.1(a) Stmt. Facts ¶¶ 8-9.) The exhibitors supervise the show contractor's construction of their booths or hire an EAC to do so. (Defs.' Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. D, 3/23/10 Mem. at 4; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶ 8; Defs.' Resp. Carpenters' LR 56.1(a) Stmt. Facts ¶¶ 9, 11.) The show contractors and EACs hire plaintiffs and other unions to do the work. (Defs.' Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. D, 3/23/10 Mem. at 4; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶ 4; Defs.' Resp. Carpenters' LR 56.1(a) Stmt. Facts ¶ 10.)

Trade show work at MPEA is governed by a number of contracts: (1) a collective bargaining agreement ("CBA") between Local 727 and the show contractors/EACs ("Trade Show Agreement"); (2) a CBA between Carpenters and the show contractors/EACs ("Area Agreement"); (3) a CBA between Local 727 and MPEA governing MPEA's receiving clerks and assistant supervisors ("Local 727-MPEA CBA"); and (4) an agreement between MPEA, Carpenters and the show contractors that, in essence, modifies certain wage and work jurisdiction terms of the Area Agreement ("Side Letter Agreement"). (See Local 727 LR 56.1(a) Stmt. Facts, Ex. B, Trade Show Agreement; id., Ex. A, Agreement Between MPEA & Local 714; id., Ex. C, 3/9/09 Letter of Understanding; Carpenters' Mem. Supp. Mot. Prelim. Inj., Ex. C, Area Agreement; id., Ex. B, McLaughlin Decl. ¶¶ 1-5; id., Ex. D, 6/1/08 Side Letter Agreement; id., Ex. E, 12/21/00 Labor Agreement for MPEA; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶¶ 4-6, 8; Defs.' Resp. Carpenters' LR 56.1(a) Stmt. Facts ¶ 10; Defs.' Stmt. Add'l Facts [Carpenters] ¶ 8.)

Historically, the MPEA has serviced its debt and funded its operations with tax revenue generated by the trade shows held at its facilities. See 70 Ill. Comp. Stat. 210/5.4(a)(7). In recent years, however, that revenue has fallen sharply, forcing MPEA to use general tax funds to pay its debt and to raise the prices of its services to generate operating funds. See id. 210/5.4(a)(8); (Defs.' Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. B, 4/29/10 MPEA Interim Bd. Report ["Board Report"] § 3.)

In late 2009: (1) the Healthcare Information and Management Systems Society, whose trade show at McCormick Place generated $50 million in local spending annually, decided to hold its 2012 show in Las Vegas; (2) the Society of Plastics Industry Inc., whose previous trade shows at McCormick Place had generated $95.3 million in revenue, decided to hold its 2012 and 2015 shows in Orlando; (3) the International Dairy Foods Association said its 2010 show would be held in Dallas, not Chicago; and (4) the National Restaurant Association, which generates $106 million in revenues annually, and the International Home and Housewares Show, which generates about $75 million in revenues, announced that they were considering moving their shows from Chicago. (Local 727's Resp. Defs.' Stmt. Add'l Facts ¶¶ 14-18, 32-33; Carpenters' Resp. Defs.' Stmt. Add'l Facts ¶¶ 30-32; Local 727's LR 56.1(a) Stmt. Facts, Ex. Z & Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. B, Board Report § 2.) The primary complaints of these groups and others who have held trade shows at McCormick Place are that the costs of union labor and MPEA's services are too high. (Defs.' Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. B, Board Report §§ 3, 5; id., Ex. D, 4/1/10 Jt. Comm. MPEA at 11-13, 20-25 (testimony of National Restaurant Association, International Housewares Association, Society of Manufacturing Engineers, Graphic Arts Show Company); Local 727's Resp. Defs.' Stmt. Add'l Facts ¶¶ 32-33.)

In response, the Illinois Legislature created the MPEA Interim Board of Directors and ("Board") and directed it to develop recommendations for improving MPEA's operations. (Local 727's Resp. Defs.' Stmt. Add'l Facts ¶ 23; Carpenters' Resp. Defs.' Stmt. Add'l Facts ¶ 39.)*fn1 In April 2010, the Board recommended that MPEA: (1) restructure its debt to create an operating fund that would allow it to stop marking up the food and utility services it required exhibitors to use to generate cash; (2) institute labor reforms and give exhibitors the same "rights" to move their materials into, out of and around McCormick Place as they have at competing venues; (3) end its subsidy of the Chicago Convention and Tourism Bureau ("CCTB") and launch its own marketing efforts; and (4) change its "convoluted" governance structure. (Defs.' Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. B, Board Report §§ 1-3, 5-6; Local 727's Resp. Defs.' Stmt. Add'l Facts ¶ 26.)

In May 2010, the state acted on some of these recommendations. It passed legislation that restructured MPEA's debt, allowing MPEA to stop marking up its services, and permitted exhibitors to obtain food and electrical service from outside vendors. See 70 Ill. Comp. Stat. 210/5.4(c)(15), (17), 210/13.2; 30 Ill. Comp. Stat. 105/8.25f; 35 Ill. Comp. Stat. 105/9, 110/9, 115/9, 120/3. Debt restructuring was a step "of paramount importance," the Board said, because MPEA's mark-ups made its "utility and food services charges . . . significantly higher" than those at other venues and was a "principal reason why [MPEA had] lost its competitive edge." (Defs.' Mem. Resp. Carpenters' Mot. Prelim. Inj., Ex. B, Board Report § 3.)

The state also added an exhibitors' rights provision to the MPEA Act "[to] ensure that . . . [MPEA's] facilities remain economically competitive with other convention venues . . . by reducing costs for exhibitors and show managers." 70 Ill. Comp. Stat. 210/5.4(a)(15). The exhibitors' rights provision states, in relevant part:

All [MPEA] contracts with exhibitors, contractors, and managers shall include the following minimum terms and conditions:

(1) Consistent with safety and the skills and training necessary to perform the task, as determined by the [MPEA], an exhibitor and exhibitor employees are permitted in a booth of any size with the use of the exhibitor's ladders and hand tools to:

(i) set-up and dismantle exhibits displayed on [MPEA] premises;

(ii) assemble and disassemble materials, machinery, or equipment on [MPEA] premises; and

(iii) install all signs, graphics, props, balloons, other decorative items, and the exhibitor's own drapery, including the skirting of exhibitor tables, on the [MPEA]'s premises.

(2) An exhibitor and exhibitor employees are permitted in a booth of any size to deliver, set-up, plug in, interconnect, and operate an exhibitor's electrical equipment, computers, audio-visual devices, and other equipment.

(3) An exhibitor and exhibitor employees are permitted in a booth of any size to skid, position, and re-skid all exhibitor material, machinery, and equipment on [MPEA] premises. . . . .

(5) The [MPEA] shall designate areas, in its discretion, where exhibitors may unload and load exhibitor materials from privately owned vehicles at [MPEA] premises with the use of non-motorized hand trucks and dollies.

(6) On Monday through Friday for any consecutive 8-hour period during the hours of 6:00 a.m. and 10:00 p.m., union employees on [MPEA] premises shall be paid straight-time hourly wages plus fringe benefits. Union employees shall be paid straight-time and a half hourly wages plus fringe benefits for labor services provided after any consecutive 8-hour period; provided, however, that between the hours of midnight and 6:00 ...


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