COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE COUNCIL COMMITTEE ON LABOR & CIVIL SERVICE - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, March 30, 2000 1:10 a.m. - - - BILL NO. 000108 - Enacting a new Chapter 9-2300 of the Philadelphia Code, entitled "Protection of Displaced Workers," and amending Section 19-2602, entitled "Licenses," to require that all contractors awarded contracts for the performance of food and beverage, hotel service, health care, janitorial, or other building maintenance services within the City of Philadelphia retain certain non-supervisory employees of the previous contractor for a 90-day employment period during which retained employees may not be terminated except for cause, and to require that said employees be employed with various other job security protections providing penalties for noncompliance, including, but not limited to, the revocation of business privilege license of violators and granting remedies to the agreed parties, all under certain terms and conditions PRESENT: COUNCILMAN DARRELL L. CLARKE, Chair COUNCILMAN DAVID COHEN COUNCILMAN FRANK DICICCO COUNCILMAN W. WILSON GOODE COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 I N D E X Michael Russo, President, SEIU Local 36 . . . 5 Toya Hendricks, Affected Worker . . . . . . . 13 6 Rev. Dr. Leonard Thompson, Sr., Minister. . . 23 Lauren Townsend, Executive Director . . . . . 27 Citizens for Consumer Justice Grace Redden, President, BOMA . . . . . . . . 34 Joseph Hanley, Board Member, BOMA . . . . . . 48 Diana Ceresi Associate General Counsel, SEIU 63 Anna Burger, Executive Vice President, SEIU 77 3 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 P R O C E E D I N G S
Good afternoon, everyone. The meeting will come to order. This is the public hearing on the Committee on Labor and Civil Service. There is one resolution and one ordinance that has been listed for today's public hearing. The ordinance 9 concerns the proposed Displaced Workers Act, a resolution calling for hearings on wages to bring -- sorry, I'm going to skip that. To begin the committee, we will hear testimony about the Displaced Workers Act, Bill 14 No. 000108. After taking testimony on that bill, we will take testimony on Resolution 113. Will Mr. Brown please read the title of Bill No. 108.
An ordinance enacting a new Chapter 9-2300 of the Philadelphia Code, entitled "Protection of Displaced Workers," and amending Section 19-2602, entitled "Licenses," to require that all contractors awarded contracts for the performance of food and beverage, hotel service, health care, janitorial, or other building maintenance services within the City of Philadelphia retain certain non-supervisory 4 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 employees of the previous contractor for a 90-day employment period during which retained employees may not be terminated except for cause, and to require that said employees be employed with various other job security protections providing penalties for noncompliance, including, but not limited to, the revocation of business privilege license of violators and granting remedies to the agreed parties, all under certain terms and conditions.
Thank you, Mr. Brown, okay. I understand that we have several panels to testify today. I would like to recognize Councilman Angel Ortiz first for some opening remarks, then I want to ask for the first panel to testify. According to the schedule, we have Mr. Michael Russo, President of Local 36 of the Service Employees International Union, and Miss Toya Hendricks, a worker would be affected by the proposed act, are the first witnesses to testify. Councilman Ortiz?
Thank you, Chairman 5 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 Clarke, I'll be very brief. During the last few years in this country, we have seen an economic boom that's been unprecedented. But with that economic boom has also come displacement of workers across the nation. We used to be the legislature that used to be in the forefront of protecting workers' rights, and I think with this act, we begin to get behind the lines of working-class individuals and the working class of the City. This is not a bill that is new in this country: it is a bill that has been passed in many other cities. It is a bill and the concept that has been adopted by the federal government and President Clinton. I think it is time for us to move together with the workers to make sure that any company that comes into Philadelphia has workers that are skilled, has a labor force that is stable, has individuals that really care for what they do -- not individuals that can be here one day and gone another, and be displaced easily as we someplace light bulb or a piece of furniture. We're dealing with human beings, we're dealing 6 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 with people who contribute not only to the economy but to the affairs of this city. And we are saying as a Council with this bill that the workforce of this city needs to be respected and, we need to stabilize it. So Chairman Clarke, I think we can begin with the panels.
Thank you, Councilman Ortiz. We'd like to call the first panel. Mr. Russo? (Witnesses come forward. ) (Applause.)
First I'd like to recognize other Councilmembers of the committee -- Councilwoman Krajewski, Councilman DiCicco, Councilman Goode, and obviously Councilman Ortiz and myself. A quorum is present. (Applause.)
My name is Michael F. Russo, and I am the President of SEIU Local 36. On behalf of the Service Employees International Union Local 36, our 4500 members in the City of 7 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 Philadelphia, I want to thank each of you for allowing me to testify today. I would like to personal thank and recognize Councilman Darrell Clarke, Chair of the Labor and Civil Service Committee, and Councilman Angel Ortiz, Vice Chair of the committee, and all the members of the Council who have cosponsored and supported this Displaced Workers Protection Act. I thank you. First, a little background in terms of who SEIU Local 36 is. Local 36 represents 4500 people who overwhelmingly work and reside in the City of Philadelphia. Our membership is largely made up of janitorial workers who work in numerous Philadelphia office buildings and for various private contractors throughout the City. Our membership also includes private apartment house cleaners, engineers, clerical workers, and sidewalk/street service workers, most of who are also contract service workers. Our members earn a living wage on an average of between 9 and $10 per hour. Most enjoy family health-care benefits, a 50-cent prescription plan, legal and dental coverages. We 8 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 have in our 80-year history sacrificed and worked hard for these benefits and wages. As low-wage workers and working people, we take great pride in what we maintain, the job we do and what we have won, but we do fool ourselves either. Tomorrow has never been promised to us. The realities of the janitorial contracting industry and the real-estate market does not allow that to happen. Both the real estate and janitorial industry are fiercely competitive. In the janitorial business, profit margins for private contractors are small, usually to percent. With the exception of wages and benefits, most costs are controlled, with bids dictated largely by companies' cost and wage scales. As a rule, building owners maintain a 30-day cancellation clause in their contracts with janitorial companies. Most of our members in fact will have worked for three or four contractors during their years of service. Janitors are often the last to know that a contract is changing hands. They may literally, despite their years of service in one building, with one company, be told on Thursday 9 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 that as of Friday, the contract is changing hands, and that on Monday, they are out of a job. In cases where we have an agreement with the building ownership, our jobs are protected. However, in situations where our agreement is simply with the cleaning contractor, which is true for about 1500 of our members, we face the ever-present fear of being forced out onto the streets. This is true simply because a new contractor may wish to displace long-term employees often in order to squeeze wages benefits and benefits and upset job stability. I should emphasize that the real-estate market naturally and in Philadelphia is changing radically as well. These new conditions put all our members and their jobs at risk. Building ownership is now changing hands much more frequently. The day's gone when a local entrepreneur -- Mr. Girard, say -- owns numerous buildings in Philadelphia and maintains his investments for generations. Building ownership is now often controlled by international investments, real-estate investment trusts, and dictated by the whims and fluctuations of the 10 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 stock market. In this new economy, we are finding more and more that ownerships in building is changing hands not because Philadelphia is not a great affordable place to do business, but simply because stocks are up or hot on the market. Let me offer some concrete examples from a recent history. In the early 1990s, and many of you will recall, the North American Building was sold.
Members of Local 36, despite their years of service, were displaced with little or no notice. After a long struggle by the local and with the assistance of members of City Council and the greater community, our janitors won their jobs back. All of that, however, could have been prevented with the Displaced Workers Protection Act. One more example. Two years ago, 1500 Walnut was sold. The new building owners decided to bring in a new contractor, Golden Mark, from New York City. The end result of all of this was that ten Philadelphia residents lost their jobs. People like Toya Hendricks, who was a cleaner at 1500 Walnut for 11 years, and she is here to testify today, were pushed head first into the 11 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 brink of poverty. Some of her coworkers collected unemployment, some public assistance. Others like Toya, after months of uncertainty, luckily found permanent jobs in other buildings. In smaller buildings, especially where tenants often have strong bonds with the cleaners, learn to trust them, feel safe, what Toya and people like her went through is particularly disturbing. I must confess I am concerned about larger job displacements in the foreseeable future. What happens as a result of deregulation, corporate mergers and new ownership at the PECO headquarters on 20th and Market. Not 10 but forty janitors are displaced overnight. This really speaks to the need of this legislation. There is not a good argument as to why a contractor cannot offer a 90-day probationary period of employment to (unintelligible) hard-working Philadelphians. This is not an unreasonable standard; it's a small measure of job security, and it promotes good labor management relations by allowing the parties to talk at the board table and not on the streets. We need passage of this Displaced Workers Protection Act. C. and San Francisco have demonstrated, this job protection law can work remarkably well. I should add this measure. This bill 6 does not cost any new tax dollars and doesn't ask the new employer to respect the previous wages or benefits; it asks them to simply to hire workers who know the work. In clearest terms, the Displaced Workers Protection Act is about justice, this is what we are. We are tired of fearing for livelihoods, of watching over our shoulders, of not being able to look into the next week. We are not asking for the full promise of tomorrow; we simply are asking for a fair chance to do what we know best. We want a chance to do our work. We have faith that you, as our elected representatives, are listening, and I ask, please pass the Displaced Workers Protection Act and say yes to the measure of fairness, job protection, and justice. In closing, I would just like to bring to your attention that this morning, when I went to my office, I was notified that the Lafayette Building at Fifth and Chestnut is being sold 13 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 tomorrow. Our workers will be notified tonight that as of tomorrow night, they no longer have a job. This is workers who are going to have the 5 chance of being out of work come Monday. 6
Seventeen. If we were to 8 have this bill, they would at least have the 9 chance to continue to work for ninety days. 10 Without it, they will be at the unemployment line 11 first thing Monday. 12 So I urge you again to pass the bill. 13 Thank you. 14 (Applause.) 15
Let the record 17 reflect that Councilman Franny Rizzo has now joined the committee hearing. Miss Hendricks?
Good afternoon, members of City Council, Chairman Clarke, SEIU representatives and members. My name is Toya Hendricks. I have been a member of Local 36 for 15 years. For twelve and a half of those years, I worked at 1500 Walnut Street as a Class I 14 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 cleaner. Some of my coworkers worked there for 19 years and more. Now, over the years, different companies have come and taken over contracts, and each one has retained all of the workers. So, of course, you can understand how we would feel secure in that workplace. However, that security changed one day when I went to work one evening and found out that the building ownership had changed hands and a company Golden Mark from New York had took over the contract, bringing in their own workers from New York to replace us. And in order to continue with Golden Mark, we had to fill out applications and take a forty percent cut in our wages. They completely took away our benefits. I mean, can you imagine how we felt, wondering how we would pay our bills and rent? Well, needless to say, we were all devastated. And then I asked a question: How can a company come here from out of state, replace us with out-of-state workers, robbing the City of Philadelphia of the revenue? How could they do that? Well, the answer is, because we don't have 15 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 the Displaced Workers Protection Act. I mean, here we were, nine building cleaners, all of us, having at least ten years and more at this building. Some of us were the sole supporters of our family. And we lost our jobs. I had to rely on family and friends for their help. And for the first time in my adult life, I couldn't even support myself, I couldn't pay my bills. It affected all my relationships. It made me feel like I was robbed of my ability to make a living, I was robbed of my dignity and my self-esteem. I was left with no hope. (Applause.)
Now, all of us at 1500 Street, we were reliable, respected building cleaners, and through no fault of our own, we were denied our jobs and all we had to fight for over the years. It just didn't seem fair. So eventually, the union found me work in another building, but it has taken me years to reach the same living standards I had at 1500 Walnut Street, before Golden Mark. One of my coworkers was placed in another building, and guess what? Six months later, when the tenants 16 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 moved out, being that she had the least seniority, she was out of work again. Our families have suffered greatly and so have we. I mean a worker shouldn't have to go through this kind of experience. So I am here today to ask City Council to please pass the Displaced Workers Protection Act so that other contracted workers in Philadelphia will not have to go through what me and others have gone through. Please pass this important bill. I thank you. (Applause.)
Thank you, Miss Hendricks and Mr. Russo. Are you all here to talk about the stadiums? No? (Laughter.)
It was a joke, I'm sorry. But I have a couple questions and I'm going to ask other members of the committee if they have some questions. One question to Mr. Russo: What's the 17 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 average earnings of your workers in this particular union and in this field?
Between and $10 an hour 5 and an additional to $4 hour in benefits.
Okay. And 7 traditionally, the benefits packages, upon the 8 changing -- or actually the displacement of the 9 workers, does the benefits package traditionally go down with the new workforce, or is it similar health and welfare? I mean, how does that work?
In situations where they've been displaced, usually those -- the ones doing the displacing do not carry any health benefits.
Mr. Russo, in your workforce, you said there's 4500 at the current time in the membership?
And they, I think we can generally say, are close to 100 percent Philadelphians?
I would say it's close to about 85 percent Philadelphia. That does not 18 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 include our Philadelphia retired workers, which is about 600 additional to the 4500.
And that question -- that answer you gave Councilman Clarke, the contractor that usually that comes in really brings in -- does he bring in his own force of workers, cuts the benefits down to, I imagine, the minimum wage, with no benefits? And those workers are not, I imagine, not as experienced in this as Miss Hendricks has been? Is that really the experience?
Miss Hendricks, you say you have been 11 years in your job?
Could you describe, you know, what you did and what was your relationship with the tenants of that building and how they related to you? 19 3/30/00 LABOR & CIVIL SERVICE - BILL 000108
Yes. Well, as a Class I cleaner, it's light-duty cleaning, you know, where we take out the trash, we vacuum and we dust, you know, light weight. And my relationship -- I mean, over the years, when you work in a building, the tenants, they know you, and it's almost like being home because a lot of times -- I mean, most of the time you, do spend a time in that building, you spend a lot of time there so people get to know you. And they became accustomed to us, they trusted us. And I mean, when new workers come in, they didn't like that. You know, they tried to write letters on our behalf because they really wanted us to stay. We have a relationship with the tenants and they know that you're doing a good job. They don't want to see you replaced.
I imagine you have free run of the offices, so I imagine that there has to be a level of trust that is put in there.
Absolutely, it is, it definitely is. And I was well trusted and liked.
Is there a turnover 20 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 in these new contractors as they come in? What is the turnover ratio in those cases? 'Cause I'm concerned --
You know, it's hard to say, but sometimes it's yearly, depending on the particular building manager.
They will yearly put the building out to bid under our master agreement, and in most cases we don't have a problem. But the bigger problem is where a building's sold. And at the time of the sale of the building, they bring in a new contractor, who attempts to displace the workers. Under our master building owner's agreement here in Philadelphia, our union contract is with the building owner, and frequently they change contractors and we don't have any problems. But where a building is then sold, we get into some problems of the displacement situations.
But when a company like Golden Mark, or whatever it's called, comes in from New York City and they hire a whole new 21 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 workforce, I would imagine that the stability of that workforce, the turnover of that workforce is -- it probably turns over quickly over a year-period.
Oh, it does, because, you know, where they're paying those workers between 6 and $7 an hour on average and no benefits in Center City, you know, they can go to McDonald's and make more and get benefits.
The turnover on those jobs and even currently in those jobs that are nonunion in Townsend is very high. The workers that work on those jobs currently are always coming in and trying to get jobs on the union jobs because they -- you know, it's a no-brainer.
Thank you, Councilman. 22 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 Councilman Goode, any questions? All right, thank you very much for your testimony.
I would like to introduce two other workers -- they're not going to say anything. They're two workers from the Lafayette Building. One of them is Vanessa Walker, and the other one's Minnie Moore, and they're both sitting here by the pillar. Minnie Moore, who I stated earlier, they're both affected by sale of the Lafayette Building. This is the second time she's gone through this. She worked at the North American Building at the time that building was sold. This is the second time this has happened to this woman, where a building was sold and now she may not have a job. So in closing, I would like to thank you again and urge you to pass this bill.
Is Joseph Rauscher 23 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 here? Joe? (Mr. Rauscher not present.)
I'd like to ask Reverend Doctor Leonard Thompson and Lauren Townsend to please step forward. (Witnesses come forward.)
To the honorable Council Committee Chairman Darrell Clarke and to Council Vice Chairman Angel L. Ortiz and to the honorable other Councilmembers of the Philadelphia City Council, I thank you for this opportunity to address you this afternoon. My words are, let our people stay for ninety days. Ninety days to continue to meet the needs of family members. Ninety days to continue to complete financial responsibilities. Ninety 24 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 days to continue to put food on the table for our children. Ninety days to feel needed. Ninety days to make a living. Ninety days to continue to pay City wage and federal taxes. Ninety more days to work. I serve with the Philadelphia Baptists Association and directing the ministry of 126 churches in community outreach into nursing homes, prisons, public ministry issues. We have worked with this union, SEIU, and we have served with them on different campaigns. And our people are affected because with a recent survey, we discovered that many religious people are involved in organizations and employments that are being supported. So we're asking for ninety days for them. Just ninety days is all we're asking for at this time. It will be ninety days of job security, ninety days of employment ability. It will be ninety days of receiving just earned paycheck. Ninety days that will increase self-worth as we have heard, dignity and volume as a contracted worker in the City of Philadelphia. Ninety days can be a reality if you 25 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 vote for the Displaced Workers Protection Act of 2000. You can improve the lives of working people in the City of Philadelphia, their families, and lead the way to a more just and humane society just by one vote, voting for the Displaced Workers Protection Act. It is within your prerogative and power to protect the jobs of not only your loved ones, but also our loved ones, as well as all those that are employed by companies and businesses doing businesses in our city, our beloved city. Why should you vote yes for this bill? I could give you ninety reasons, but I won't. The greatest reason, in my humble opinion, is the reality that if the Philadelphia City Council does not provide job security by voting for the Displaced Workers Protection Act of 2000, the leaves of a myriad of low-wage workers in Philadelphia will be adversely affected -- janitors, security guards, building service, hotel, food and beverage workers, and health care practitioners will be at the mercy of each and every new employer. Jonah went down to the City of Ninevah 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 and cried forty days in Ninevah shall be overthrown. We don't need forty days to repent. Jesus was in the wilderness for forty days and night. We don't need forty days and nights of trial. Moses led the children of Israel in the Sinai Desert for forty years before reaching the promised land. We don't need forty years of wandering. We are asking you just for ninety days of employment security for City workers, workers who work in our city. We are requesting that hard-working Philadelphians be not sacrificed by companies who are so willing to leave former, present, and future employees in the wilderness of unemployment. We are not asking for forty days and forty nights of protection from a nomadic rain -- just ninety days of sun shining security for City workers in companies with City contracts. We are asking for an art of employment security for these, the least of our Philadelphia citizens. Just ninety days more. I'm asking you to vote for Chapter 24 9-2300 protection for displaced contract workers. Thank you for this opportunity. 27 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 (Applause.)
Good afternoon. My name is Lauren Townsend. I'm the Executive Director of Citizens for Consumer Justice. I'd like to thank Councilman Clarke, Councilman Ortiz, and members of the Labor and Civil Service Committee for supporting the Displaced Workers Protection Act of Philadelphia and to all members of City Council for allowing me to speak today among such a distinguished panel of speakers. Dedicated to winning social, racial, economic and environmental justice, CCJ is a statewide consumer organization working on preserving and strengthening Social Security, Medicare, lowering prescription drug prices, passing a strong patient's bill of rights, preserving and enhancing our accesses to the civil justice system, winning clean-money elections, public access, and protection for workers and their families, and more. In the last year, we launched our Campaign for Social and Health Security, which now 28 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 boasts over eighty Pennsylvanian coalition members representing thousands. With our Campaign for Consumer Protection, we've coordinated opposition to corporate-fueled anti-consumer legislation. We're supposedly in the best of economic times. Yet for those of us who are lucky enough to have jobs, own homes and have some semblance of health care, living without worry is still a day-to-day challenge, because feeling and really being secure is about knowing that should a job loss or a catastrophic illness or injury happen to oneself or to a member of one's family, that a safety net of humanity in society will at least cushion the blow, if not come to the rescue. Unfortunately, with so many of us living on the edge, families can't always be there for us, beyond giving us emotional support that we need. So our priorities as a community and a nation have become focussed on preserving and strengthening what have become necessities in our lives -- Social Security, Medicare, access to the courts, lower prescription drug costs, universal health care -- and the reason we're here today -- liveable communities and wages and job security. 29 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 So passing the Displaced Workers Protection Act of Philadelphia should be a no-brainer. It's good for workers and their families because they will have the protection from being displaced at a moment's notice. It's good for the City, because secure and happy workers are more apt to spend money, which translates into a more vibrant economy. It's good for our real-estate market because a stable office building workforce translates into desirable real estate and happy tenants. I for one am not the happiest of tenants. CCJ's office is at 17th and Sansom Street, and we've had at least three different companies take over the cleaning of our building since July when we moved in. We're not the only unhappy tenant in the building. As the management company that runs our building has gone cheaper and cheaper -- and I might add nonunion -- our building and tenants have suffered. We haven't been able to establish an ongoing relationship with the building's cleaning staff because their tenure is so short-lived. On the contrary, we feel as though we're constantly 30 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 introducing ourselves to new workers. And once more, we've become nervous about each new contract because our building has been getting steadily dirtier and we've experienced incidents of theft. I believe that CCJ is not the only downtown tenant who would agree to pay a little more for janitorial workers, the members of Local 36, who are secure and happy and stay long enough so that we might trust each other and learn each other's names. Promoting and cleaning up downtown Philadelphia, if I'm not mistaken, has been a priority of the last decade, and it's been done with a great deal of success.
So now, now in this time of prosperity, the appropriate and responsible thing to do is to examine the human infrastructure, the people in this room, the people behind the buildings, and make it secure and real for everyone. Please pass the Displaced Workers Protection Act and do it soon. Thank you. )
Thank you. 31 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 Let the record reflect that Councilman David Cohen has joined the committee. Miss Townsend, can you speak again of the three changes in the service? Can you give me a little bit more detail on that?
We rent in the Architects Building, which is at 17th and Sansom Street. When we first moved in -- I'm somewhat mistaken. After I wrote this testimony, I confirmed one thing: it has changed three times. Initially it was the Star Cleaning Company, which is a nonunion company, which changed crews twice.
Yeah, I believe it's -- you know, I think members of Local 36 could confirm that. Are they Philadelphia? No? They're not Philadelphia.
The same company changed crews; is that what you said?
Yeah. It's called "The Star Cleaning Company," and they changed crews twice. They changed crews, changed crews again, and then the building management contracted out to 32 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 different company, Arthur Jackson, which is also a nonunion company. And as time has gone on, we just see different faces all the time, no one can get used to anyone else, and it makes us all very nervous. And the building gone to pot and people are looking at, you know, other buildings.
No, it's where the management is going in terms of, you know, just going cheaper and cheaper.
So you think the changes by the Star -- I'm trying to get a sense of Star changing its workforce three times, I'm trying to understand that. Was it lack of performance by the workers or is it for cheaper workers?
Star Company has a bunch of employees. They switch them, you know --
No, they're nonunion. We wish they were union because our friends in 33 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 union buildings are much happier than we are. (Applause.)
Okay, thank you. Are there any questions from other members of the committee?
Yeah. So in essence, the changing of the crews was not to improve the service that they were providing but to get a cheaper and cheaper workforce in place.
But the quality of work has suffered with all these changes.
It's suffered. And I feel sorry for some of the workers. And I regularly say, Hey, you know, I've got friends who are right around the corner with Local 36, you should go pay them a visit. But they scratch their heads and they don't know what to do. We got sent here, we're here but, you know, we don't know what to do next. We're new at this building, you know, we'll get used to it after a while. And then we don't see them again after a while.
And the other 34 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 company is also a non-Philadelphia company, right?
Okay. Are there any other questions by members of the committee? (No further questions.)
Thank you very much for your testimony. (Applause.) Is Miss Grace Redden present? (Witness come forward.)
Certainly. My name's Grace C. Still, and I'm the President of the Building Owners and Managers Association of Philadelphia. I'd like to say good afternoon to Chairman Clarke and other members of City Council. I'm here to give testimony on the ordinance which will require all contractors awarded contracts for the performance of food and beverage, hotel service, health care, janitorial or building maintenance services within the City 35 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 of Philadelphia. To retain the employees of the previous contractor for a 90-day period and require that said employees be provided with various other job security protections is a restraint of trade and interference in the conduct of business in Philadelphia by City government that exceeds its authority. Such an attempt to further regulate the conduct of business and free enterprise in the City could be interpreted as attempt to legislate socialism. Furthermore, this proposed legislation raises constitutional issues concerning the rights of parties to negotiate in what they believe to be in their best interest. Such rights are fundamental to American capitalism which is, in fact, the foundation of our society. In addition, this proposed ordinance 19 undercuts the free enterprise system, which drives the economy of this great country. It has the potential to handcuff businesses and contractors by not allowing the free enterprise system to operate as intended, with little or no 24 governmental interference. Business and contractor relationships are not about reduction 36 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 of workforce; they are about doing more with the least amount of resources. I would be foolish not to state that progress often brings job loss, but at the same time, progress often opens the workplace to new members. Besides the question of unconstitutionality, please consider the message that it sends to those who are or will conduct business in Philadelphia. That message is simple: take your business and tax base elsewhere, to a suburban or other city location whose governmental actions are focused on providing services and not interference to its business community. With all due respect to City Council, I do not have to bring to your attention the fact of the tax base erosion over the past ten years. We believe that if this is allowed, what will happen greater with providing jobs for ninety days will be no jobs at all. And that will affect everyone in the room. Thank you very much for allowing me to give testimony. (Applause.)
Can you give me a 37 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 for instance? 'Cause there's a question about what benefits to the building owners or the companies versus the benefits to the union. Can you give me an instance? What are the benefits associated with the building owner's ability to change the workforce?
Absolutely. What I can tell you is I have been in the industry of property management for twenty years. Local 36 contracts with landlords already guarantees a 60-day job. The benefits are that we should be allowed -- and I don't want to bring in a union versus a nonunion issue, I think that's completely different than what we're trying to address today -- the fact that people need to be able to conduct their business in the way they feel they should. Everyone's job would like to be guaranteed or protected. Unfortunately, most of us are not at that advantage. Union contracts do allow for that, it is a bargaining tool, and I do believe that ha has been used. So they are already guaranteed their job for sixty days.
But the question was, what are the benefits for the building owners 38 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 to be able to replace the workers? What is it, is it a cost-effective measure?
I mean, what exactly -- why would they want to do that?
As a property manager, we would like to retain the current workers in the building. I mean, that can be decided by us, because it is to our advantage to keep the tenants happy so that we can retain the tenants, so that we, you know, can collect the rent, of course. So it is definitely to our advantage to keep the same personnel, whether the contractor changes or not. And I have been the property manager where the contractors have changed but the personnel in the building have been retained. It is only the contractor itself that has changed. Now --
Okay. Did you have written testimony? Did you provide copies of written testimony?
Yes, I did. (Copy of Ms. Still's testimony not provided to stenographer.) 39 3/30/00 LABOR & CIVIL SERVICE - BILL 000108
Yeah. You know, your last statement is enlightening to me because, obviously, you want a stable working force.
But as Miss Townsend, that was previously testifying, she's a tenant in one building here in Center City, 17th and Sansom. And she's ready to move -- not because of the building but because of the service, the janitorial service that is being provided, because of the turnover of personnel. This is not legislating socialism. Actually, this Council legislates socialism all the time, ma'am, except that is for the capitalists. We legislate capitalist socialism. We give tax breaks, we give all -- we give land to corporations, we give tax increment benefits to corporations. All of these are socialist aspects. This is not American capitalism at work; it is government intervention in capitalism. So we legislate socialism all the time, except that it's for the benefit of the developer of the building 40 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 owner. And once -- and here we are not saying that you have to hire union or that -- we're not setting salaries. All that we're saying is that you have to give workers a 90-day period once a contract changes hands. And the wages can be different, the benefits can be different. That's all that there is. It is not, I do not believe, an onerous, onerous requirement upon the contractors. Actually you said that you are interested in a stable workforce. You're interested in keeping those workers who have the skills, the experience, who have been there and who the tenants of those buildings and offices, the tenants trust them to go into their offices. They leave their valuables in their office, they leave private matters in their offices. So the tenants in Center City probably would like a stable working force that they could trust. (Applause.)
But ninety days does not create a stable working force. We already have a 60-day clause in the union agreement. Ninety days 41 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 does not create a stable workforce.
But we're not talking union, we're not talking union, ma'am. The building that was just sold, is being turned over, and the lady is being laid off as of Monday.
That is correct. And someone else might have her job at some point, but then are we to decide who gets the job or who doesn't? Can government decided to do that? In ninety days, can that person -- I mean, would lose their job anyway, so --
But it gives that person a 90-day period of transition.
That's right, but it is government intervention on private business.
Ma'am, you know that in San Francisco, this bill has been passed. It has huge buildings, it has a thriving economy. They have all of the same sort of interests that cities like Philadelphia has. So does Washington D.C.. So there's the other cities that have passed legislation without having an impact on the profits or the management of the buildings in those cities. 42 3/30/00 LABOR & CIVIL SERVICE - BILL 000108
It is of our opinion that if -- that if there continues to be an intervention in businesses, that would just gives businesses another reason to decide not to bring their business into the City of Philadelphia.
And, unfortunately, because of the tax base that has eroded over the past ten years, it's the outcome.
Do you know that Philadelphia right now has an overabundance in terms of office space? I mean, there's a constant demand right now. We're in essence a buyer's market in terms of office space in Philadelphia. We have an economic boom situation and what you're saying to us is that the workers in this economic boom cannot have at least a small guarantee of stability, although you would prefer to have a stable workforce, which contradicts your statements, you know. (Applause.)
We -- I can tell you that the members of this association all look for the 43 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 same, and it is up to the owner and we are happy to have that right to choose the workers and the contractors and the type of business that's there. Yes, we do want a stable workforce, and that is our decision to make, and we are happy that it is still our decision to make. That's what keeps us in business in the City of Philadelphia.
Good afternoon, Miss Redden. I'm not familiar with your organization. Could you tell me --
How many of your officers and board directors actually have their businesses located within the City of Philadelphia?
And how many of those businesses are actually located within Philadelphia?
And 20 percent moved 44 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 out?
No. Our other members are located in the tristate area -- suburban Philadelphia, South Jersey, and Delaware.
And why exactly do you think they're located outside of the City?
Actually, the owners of our property are located in Boston but we have purchased buildings in the City.
But why do you choose to do business within Philadelphia?
Well, certainly. (Applause.) 45 3/30/00 LABOR & CIVIL SERVICE - BILL 000108
How exactly would this act make your business less profitable?
How would it make your business less profitable, or how would it make your business less competitive?
I think that the purpose of it is more on the basis of the government intervention rather than --
But this act would not make your business any less profitable or any less competitive, would it?
Knowing the concern of the people in this room, we heard that the 46 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 building is going to be sold tomorrow, and there's a possibility of those people -- and I would assume that that's only a possibility that those folks are going to be terminated by the new owner. Lacking this legislation, how would you suggest that this would not be an issue? Do you have a suggestion or a resolution to protect these people other than having this legislation?
Well, I can -- I can tell you that the majority of our -- well, all of our city-based members are in a contract with the Local 36, we are union buildings. And the protections for these employees are within the contract, which we have negotiated with them. So we are there also negotiating with the union for their protection.
Do you think that it's appropriate that Mr. Russo would be notified the day before that a building's being sold? What's the secrecy that -- why is there such secrecy that the gentleman just found out that the building at Fifth or Sixth and Chestnut Streets would be going to settlement tomorrow? Why 47 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 couldn't some consideration be given to let people know that this is in the wind? (Applause.)
I think what I'm hearing here is because of some of the tactics, you've forced this legislation. I mean, I don't understand -- (Applause.)
I don't understand why a building owner would have to keep a transaction that a building's being sold that close to the vest.
I wish I could understand all the workings of the real estate transactions. Unfortunately, I am not a developer, I am not, you know, a buyer, so I can't tell you the ultimate reasons why some people are notified a month ahead of time, two weeks ahead of time, six months ahead of time. As a property manager, sometimes we don't find out ourselves.
But then you see the need, obviously. This is an example of a need. Could you assure -- within your own organization, could you assure that the employees would be 48 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 retained by the new owner? Is there anything that you could do to work toward that goal?
My name is Joseph Hanley (ph.). I'm a board member with the BOMA organization. Somebody from the committee had brought up the fact of how this legislation would in fact deter from profits as a building owner. Let's take a look at this from a technology standpoint. If technology changes and a new business owner -- a business owner and a contractor can strike some sort of a contract into which they could bring new technology into play and that, in fact, may require reducing the workforce, that affects profits, it affects bottom line. You had asked how --
Can you give me an example of what technology would affect this particular workforce? 49 3/30/00 LABOR & CIVIL SERVICE - BILL 000108
Right. One of things that we had talked about was how this also affects food and service workers in hospitals and areas like that. If you bought in some equipment that could, we'll just say, produce meals automatically, introducing automation, that may in fact take away some jobs.
Okay, excuse me. My question was not how could it affect profitability.
I asked, how would it affect profitability? In her particular business or in your particular business, how would it affect profitability?
So you have changes in technology in terms of where you plan on servicing your building that would be impacted by this? Do you have current plans?
Do you have current plans to change the technology? 50 3/30/00 LABOR & CIVIL SERVICE - BILL 000108
But the issue that you speak of speaks more of a business downsizing. We're talking about the changing of a contract and displacing workers pursuant to the change of the contract. You're talking about the changing of technology that will no longer require that you need one or two workers. That's not specifically what we're talking about today; we're talking about the changing of a contract.
You haven't read the 51 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 bill.
Well, it -- nothing prohibits -- no one says that you have to hire -- you know, nothing prohibits the downsizing of the workforce in this bill. Nothing prohibits the using and bringing in of technology, okay? All that it says is that those workers that you're going to keep have to be in order of seniority, okay? And if you have a need for a certain workforce, then you have to keep those workers at least for ninety days, but it doesn't say that you have to keep the same numbers.
There, again, what if I engaged with a contractor that could bring in a workforce that has higher technology than the existing workforce?
Sir, the bill does not prevent a contractor from using technology.
I'm saying workers with a higher level of technology. Let's revert it to -- (Jeers from audience.)
Sir, I would suggest 52 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 you read the bill in its entirety. Nothing in the bill prevents that from happening, nothing prevents at all any of that. It is not addressed to do that.
If we start with approving this bill with the 90-day guarantee for these workers, what other guarantees can we expect from City Council to approve once this is done with interfering with contracts and owners' rights or relationships?
Could I make a statement? This Council, during the last eight years, and previous to the eight years before that, this Council -- in fact, when Councilman Cohen was Chair of the Rules Committee in 1987 and '88, this Council approved the Center City District in order to enhance the profitability, the aspect of quality of life in Center City, the bringing back of people to live in Center City and do business in Center City. This Council during the last fifteen years that I've been here have been to the task. We want more buildings to occur in Center City, we want more businesses to settle and more tenants to 53 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 come in. We don't want to impede that. However, we do not want to do it on the backs of the lowest paid workers in the City of Philadelphia. (Applause.)
Okay? So let us be clear, let us be clear that this Council is not about interfering in the development and renaissance of Philadelphia. But we also want the workers to be a part of it. That's all. (Applause.)
The Center City District does get 60 percent of its operating income from the members of the Building Owners and Managers Association as the tax, okay? And I guess I'm getting a little confused with the actual issue of, do you want to guarantee a job, are you trying to guarantee wages, are you trying to talk about a union issue against a nonunion issue? Because they have all come up. And I think the length of time somebody can have their job is really a bargaining issue and a relationship between a contractor and the landlord. And I'm really -- if you're guaranteeing a person's job, does everybody have 54 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 the right, no matter what business you're in, a guarantee to keep their jobs for ninety days, whether you're a property manager, you know, a trash hauler, a health-care worker, a janitorial worker, a maintenance worker? Are you going to guarantee everyone a job for ninety days? So this is where the -- this is where we're trying to say with the interference. You know, are you pinpointing only certain workers that are guaranteed a job for ninety days? Is there a wage level where the cutoff is? Is there a job type where the cutoff is? I really am getting confused.
Miss Redden, I was going to finish. I yielded to my colleagues. I was going to finish by asking you the question, and I think you just answered it. I was going to ask you, do you really believe deep down inside that this is a proper way to treat these people? And I think that your remarks answered the question, that you think it's an appropriate way to treat people. (Applause.)
But is this the decision 55 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 on how to treat people left --
I don't know of a person that you described that found out the day before that their job was ending. Not many people find out that evening before that their job is going to end the next day -- that aren't terminated for cause. I'm talking about the fact that if you folks in BOMA or some of the property owners would establish a proper way to treat people, we wouldn't be here today.
And I also believe that unfair treatment of workers was the establishment of the union and it's really a union issue on labor rather. I mean, that is really -- I mean, we're talking here nonunion to union, because in a union building, you cannot displace somebody overnight. So, you know, may be more the work at the union level than it is at City Council.
That's why I'm confused. 56 3/30/00 LABOR & CIVIL SERVICE - BILL 000108
Miss Redden, I don't know the gentleman's name next to you, but I sit here and listen totally baffled by what I'm hearing. I just can't understand why you're here in opposition to this bill. One thing has to come through, you talk about wanting to save profit somehow? Do you think that's involved?
Well, apparently, your colleague on the right thinks so.
Well, when you talk profits, then what you're saying -- and it's the only conclusion I can come to as I listen to this -- and that is that somebody must make money and somebody must lose money when there's a contract change. (Applause.)
No, sir. Only if it's a contract changed between a union and a nonunion 57 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 building, because if two contractors come in and they're both union, there is an agreement that they must hold up -- and there is wage rates in this, so it is not a change, unless it goes from union to nonunion.
You know, maybe many years ago, when I was a little boy wearing shorts, I would believe that. (Laughter.) (Applause.)
It just seems to make no sense. When this Council originally passed a bill which required sixty days' notice before a plant closed, we heard all of what I have to say sounded to me like nonsense, about how we're interfering with the private profit system, how the whole country is going to go down in flames if we passed that bill. It was a bill 21 aimed at achieving an element of fairness for workers at the lowest level of the economy since. That bill was passed, we get thanks from employers because what it did was to ensure the decent treatment of working people. 58 3/30/00 LABOR & CIVIL SERVICE - BILL 000108 And that's what this bill is about. This bill says that -- (Applause.)