Groups Restate Stand Against Exclusives

A lawsuit filed in San Diego, scheduled to be heard by a judge early last week, has stirred three major tradeshow industry organizations to reiterate their opposition to exclusives in the nation's convention centers.

Society of Independent Show Organizers President Carl Pugh said it was “no coincidence” that SISO, the Intl. Assn. of Exhibitions & Events and the Major American Tradeshow Organizers distributed a press release to the media Jan. 3, four days before a federal court judge was scheduled to consider United Cleaning Services' request for a temporary injunction against the San Diego Convention Center Corp., the entity that owns the center.

In July, SDCC officials told the nationwide tradeshow cleaning company that, in the interest of security, it could only use convention center employees – rather than its own – to fulfill contracts it had for cleaning services in the building.

The joint statement by the tradeshow industry organizations said, “SISO, IAEE and MATSO are concerned that exhibition facilities are again moving toward imposing exclusives that force organizers to use a single vendor the facility selects.”

Steven Johnson, vice president of public affairs for the convention center, said no one at the center would comment on the pending litigation. However, in court filings, convention center officials said it was necessary to use their own employees for cleaning services because it was not possible to conduct adequate security screenings of the employees of outside vendors.

Jeff Leon, United Cleaning's lawyer, said United told the center it would use the same screening procedures the convention center does. However, he added, the center refused to even describe what the procedures are.

Leon said the security concerns are a subterfuge to gain a monopoly on cleaning services at the San Diego center.

“When they say this is about security, they're not being honest,” he added.

Although the current dispute involves only the San Diego center and United Cleaning, it has captured the attention of much of the tradeshow industry and raised the question once again of exclusive contracts.

Leon said the convention center and United Cleaning have competed for the tradeshow cleaning business in San Diego for the last 20 years. In court filings, United claimed the convention center has about 60 percent of the local market share and United the remainder.

According to the court filings, the convention center's general manager, Brad Gessner, went to GES Exposition Services and Champion Exposition Services, two general service contractors that serve several shows each year in San Diego, and asked them to start using his cleaning workers instead of United's.

“They were told no,” Leon said, at least in part because the companies have national master contracts with United that call for it to clean up after their shows in multiple cities, not just in San Diego.

Then, in July, the convention center told United it could still service those contracts, but it would have to hire its employees to do so.

Leon said the average rate it is obligated in its contracts with GES and Champion to charge them is $16.30 an hour. However, he said, the convention center is charging United $17 an hour for the labor.

“So United is taking a loss on its contracts,” Leon added.

As to security concerns, GES spokesperson Detra Page said, “At no time has there been a specific security concern regarding a United employee who is working on a GES show at the San Diego Convention Center.”

Page went on to say, “GES believes in competition and that awarding contracts based on service standards benefits GES and our exhibitors.”

According to the court filing, a wide range of tradeshow industry professionals have complained about the San Diego center's decision to use only its own cleaning employees, ranging from SmithBucklin to Nielsen to Bobit Business Media.

“Please know that the imposition of an exclusive service will be in contradiction to the wishes of your customers, and it typically reduces service levels,” wrote Ty Bobit, president and CEO of Bobit Business Media.

Mary Kay Sustek, Nielsen senior vice president, wrote, “We have utilized the SDCC cleaning services over the past years, it was by choice. Imposing an exclusive of any type isn't in the best interest of Nielsen or its customers.”