High tech trade show producer IDG World Expo is roiling the industry with a new labor policy. Beginning with its LinuxWorld Conference & Expo in August, the company will require exhibitor-appointed contractors (EACs) to hire labor for installation and dismantle (I&D) of exhibits not directly, but through the designated general contractor, Freeman Decorating Co., which IDG World Expo is calling a “subcontractor.” The policy will then be rolled out at IDG World Expo's other shows: Macworld Conference and Expo, BioITWorld Conference & Expo, and COMNET Conference & Expo.

“Some shows have done extremely well in this recession, but tech shows have been getting decimated,” says Charlie Greco, president and CEO of Framingham, Mass.-based IDG World Expo. “Our exhibitors have been complaining about costs, and they look to us to help. One way to do that is to reduce labor costs, especially I&D costs.”

As Greco sees it, “There are a lot of layers between union labor and the exhibitors using the labor. Each layer marks up the labor, and the final charge can be astronomical. We have to eliminate some of these middlemen. We'll control the first markup so it won't be disproportionate.” The result, he maintains: lower exhibiting costs.

Not so, says the Computer Event Marketing Association, many of whose members exhibit in IDG World Expo shows. CEMA has issued a statement expressing concern that this policy could increase costs by creating a monopoly and could set a precedent. “The EAC has to go through Freeman to get local labor, so they'll have to mark it up,” says CEMA president Marilyn R. Kroner, marketing communications manager at Benchmark Storage Innovations, Boulder, Colo. “Who's going to make money on this? Freeman and IDG — otherwise they wouldn't be doing it.

“IDG World Expo has not addressed an integral part of the process,” continues Kroner. “Exhibitors typically negotiate pricing when working directly with EACs. The exhibitors control what they pay. It isn't as though the ‘layers’ just happen and the exhibitors blindly accept it. The exhibitor's ability to negotiate and control pricing is being taken away.”

Kroner says CEMA is urging IDG World Expo to reconsider. In addition, “We've placed a call to action to all our members,” asking them to contact IDG upper management to make them aware of the dissidence from the industry and individual exhibitors.

Event management company Nth Degree is also reportedly taking a stand on the issue by informing all clients that it will not provide supervision services at IDG World Expo events as a result of its labor policy.

IDG World Expo is also butting heads with EACs. Says Greco, “We don't understand why, if an EAC is doing nothing with labor but contracting it, there's such a huge markup.” An EAC that says the new procedure will increase costs “is saying it won't reduce charges proportionately.”

Meanwhile, Jim Wurm, executive director of the Exhibitor Appointed Contractors Association, based in Bend, Ore., comments that “I'm not sure Charlie is that familiar with how labor works.” But Wurm can't say more because of the litigation — IDG World Expo is suing EACA. Greco explains that when IDG World Expo sent RFPs to EACs and general contractors for the labor subcontractor role, “We didn't get as many returns as we'd like because EACA urged its members not to respond. But it's against the law for an association to urge a boycott.” So IDG World Expo has filed suit, seeking damages for “tortious interference with prospective economic relations, defamation, and tortious interference with contractual relations.”

Stay tuned.