How a Basketball Arena Would Expand the Unionized Workforce in Sacramento: Part 2
Part 1 of “How a Basketball Arena Would Expand the Unionized Workforce in Sacramento” described how unions obtained a monopoly on construction of the arena through a backroom deal for a Project Labor Agreement. Part 2 describes how unions are likely to win representation of the food and service workers at the new downtown Sacramento arena. Part 3 will outline how unions will likely target the ancillary development around the arena.
Will food and service employees at the new downtown Sacramento Entertainment and Sports Center have union representation? UNITE HERE claims to represent 25,000 concessions workers at 50 stadiums, serving over half of all major league sports teams, for employers such as Aramark, Levy, SMG, Centerplate and Ovations.
It is intent on making sure it does not lose the one major league professional sports team in Sacramento – the Kings of the National Basketball Association.
Surprisingly, the March 26, 2013 non-binding term sheet between the owners of the Sacramento Kings basketball team and the City of Sacramento does not specifically address the relationship between the Kings owners and the arena employees. It only states that the owners “may elect to hire a private management company experienced in the management of comparable facilities to manage the ESC, subject to the reasonable approval of the City.”
Unions are vigilant. The Sacramento Valley Union Labor Bulletin reported the following on May 21, 2013:
In a letter sent to Sacramento City Council members, staff and allies in March, the Sacramento Central Labor Council asked that specific language be incorporated into any pre-development agreement for a sports and entertainment complex in the city.
Provisions included that the development team members and operators provide guarantees that current employees at the Sleep Train Arena be retained at the new arena, that Labor peace guarantees be upheld for all hotel and food and beverage enterprises associated with new arena development with relevant unions in Sacramento County and that sustainable wages and health benefits for employees working at the arena facility and ancillary developments. Other provisions also were outlined.
What the Sacramento Central Labor Council wants is a “Community Benefit Agreement” with a service worker retention policy, similar to what’s in the Community Benefit Agreement covering the Anschutz Entertainment Group (AEG) L.A. Live Sports and Entertainment District Project in Los Angeles. (That development includes the Staples Center, home to two professional basketball teams and a professional hockey team.)
Former Kings owner Maloof Sports & Entertainment began using Levy Restaurants in 2010 to provide food and beverage service at what is now Sleep Train Arena, where the Kings currently play. Sacramento’s UNITE HERE Local Union No. 49 claims to represent 300 food-service workers at Sleep Train Arena.
This union is likely to use a few strategies to keep control of the workforce in the new downtown Kings arena. In fact, it is already implementing one of these strategies.
Holding Up the New Arena with Environmental Objections
On January 31, 2014, UNITE HERE Local 49 submitted a letter to the City of Sacramento with comments about the Draft Environmental Impact Report (DEIR) prepared in accordance with the California Environmental Quality Act (CEQA). After listing a variety of failings in the DEIR, the union letter asserted that “Due to the various inadequacies described herein, the DEIR is substantially inadequate in its overall consideration of the potential environmental impacts of the project, particularly with regards to the ancillary development around the ESC (hotel, residential, office, commercial).”
Also noted in the letter is the union’s concern about “the approximately 300 food-service workers at Sleep Train Arena who are most directly impacted by the project.” This of course is the real concern, and UNITE HERE will certainly be looking for a deal with the Kings ownership to make the environmental objections go away.
Incidentally, unions are involved in another fight over control of concessions for a sports complex in Sacramento. On February 28, 2014, the board of directors of the California Exposition and State Fair approved a proposal by Ovations for construction of a multi-use sports facility to host the Sacramento Republic Football Club Division III professional soccer team.
Union officials complained at the board meeting during public comment that Ovations had not yet reached an agreement for union representation of concessions workers at the facility. To pressure Ovations, they could appeal the board’s approval of a “categorical exemption” for the project under the California Environmental Quality Act (CEQA), thus delaying the construction and ensuring the facility isn’t ready well into the team’s 2014 season.
Labor unions throughout California are constantly worried that entertainment and sports facility management will try to cut costs (or “boost profits”) by ending their obligations to collective bargaining agreements. One prominent example in California is Honda Arena in Anaheim, where the Ducks professional hockey team plays.
On June 27, 2013, Governor Jerry Brown signed into law Senate Bill 71, a budget trailer bill that included a special provision pushed by UNITE HERE and added at the last-minute without committee hearings:
Existing law, the Displaced Janitor Opportunity Act , requires contractors and subcontractors, as defined, that are awarded contracts or subcontracts to provide janitorial or building maintenance services at a particular job site or sites, to retain, for a period of 60 days, certain employees who were employed at that site by the previous contractor or subcontractor. The act also requires that employees retained for that 60-day period be offered continued employment if their performance during that 60-day period is satisfactory. The act authorizes an employee who was not offered employment or who has been discharged in violation of these provisions by a successor contractor or successor subcontractor, or an agent of the employee, to bring an action against a successor contractor or successor subcontractor in any superior court of the state having jurisdiction over the successor contractor or successor subcontractor, as specified.
This bill would, until December 31, 2014, apply the provisions of the Displaced Janitor Opportunity Act to every contractor, as defined, that provides food and beverage services at a publicly owned entertainment venue, as defined.
This provision was carefully written to target one specific entertainment and sports facility: the Honda Arena, owned by the City of Anaheim.
Senate Bill 71 was signed three days before the in-house operator Anaheim Arena Management took over food and beverage service operations of the Honda Arena from a contractor, Aramark Sports and Entertainment.
With Democrats still hovering around a two-thirds super-majority in the California State Assembly and State Senate, this provision could be amended so that 2014 becomes 2015, thus entangling the new Kings arena in a policy originally targeted at the Honda Arena.
Senate Bill 71 provided unions with a tool to retaliate against Anaheim Arena Management. On August 20, 2013, union workers filed a class action lawsuit in Orange County Superior Court against Anaheim Arena Management to get back-pay and interest. In addition, UNITE HERE Local 11 sued Anaheim Arena Management to get the former Aramark workers back in their old jobs.
Anaheim Arena Management was accused of only retaining 75 of the 568 food and beverage service workers previously employed by Aramark. A judge imposed a temporary restraining order, but ultimately Anaheim Arena Management prevailed in court against the union.
Pressure from the Sacramento City Council
Unions may have leverage through the provision of the non-binding term sheet stating that Kings ownership “may elect to hire a private management company experienced in the management of comparable facilities to manage the ESC, subject to the reasonable approval of the City.” Could “reasonable approval” require a commitment for unionized food and beverage service workers? If a Community Benefit Agreement is not in place and the Kings ownership decides to contract out its operations at the arena, the approval process at the Sacramento City Council could be a place for UNITE HERE to apply pressure. It appears this option would not be available to UNITE HERE if the Kings ownership decided to manage operations in-house, as was done at Honda Arena in 2013.
Proposed, Non-Binding Terms of a Potential Transaction for Entertainment and Sports Center in Downtown Sacramento
Arena Project Will Have Labor Jobs, Mayor Says – Sacramento Valley Union Labor Bulletin – May 21, 2013
UNITE HERE Local 49 CEQA DEIR Comments on Kings Arena – January 31, 2014
Community Benefits Agreement for the Los Angeles Sports and Entertainment District Project
UNITE HERE litigation against Honda Center in-house operations management: Temporary Restraining Order and Class Action Complaint for Damages
Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.