Much like acts of nature, labor disputes at hotels and other venues pose a threat to meetings, particularly for organizations with policies against crossing picket lines. If planners are to avoid hefty cancellation or attrition fees, negotiation experts say contracts need to address potential union activity just as they would a hurricane or anything else that could derail the meeting.
For planners such as Patrick McLaughlin, conference chairman for the Association of Administrative Law Judges, including labor dispute provisions in a hotel contract’s force majeure clause—a clause designed to indemnify organizations for cancellations due to extraordinary events— is an essential step.
“We’re very sensitive to labor issues and we cannot cross a picket line,” he says. “Even a threat of a labor strike is a reason for us to invoke our force majeure clause. I refer to it for grounds to terminate our meeting.”
Jan Sneegas, director of general assembly and conference services for the Unitarian Universalist Association (UUA), also relies on a force majeure clause to address the impact of labor disruption. The organization uses language recommended by the hotel union Unite Here, which posts a “Model Language for Event Contracts” on its website.
But while some planners rely on force majeure clauses, Nancy Norman, president of The Norman Group, a Boston-based meeting planning firm, and author of Contract Addendums with Negotiating Techniques that Work, doesn’t believe they are adequate protection. Instead, she advocates that planners create addendums for all hotel contracts to address labor disputes and other potentially liable situations.
“Planners need a termination/excuse of performance clauses in their contract addendums to specifically protect them from labor disputes, strikes, boycotts, lockouts, picketing, etc., with the end result being the ability to cancel their program without liability due to such conditions,” she says.
According to Norman, the language traditionally used in force majeure clauses is sometimes regarded very narrowly by the courts, while a termination/excuse of performance clause “can be tailored with very specific, broader and timely provisions as opposed to the traditional provisions of the force majeure.”
Norman also recommends the following precautions:
- Include a comprehensive phrase in the contract clause stating coverage for all possible emergencies and non-emergencies that would have a negative effect on the conference success should they occur.
- Include a clause in the contract stating that the hotel will notify the group in writing within 10 days after it becomes aware of any labor disputes, the expiration of a negotiated labor contract or an impending strike or lockout.
- Include in the contract the remedy of relocating the conference to another site without liability if the planner determines that the amount and type of the labor unrest would be detrimental to the value of the conference at the original venue.
- If the planner decides to go ahead with the meeting, despite the challenging situation, it must be written into the contract that the hotel will waive all attrition fees related to a reduced-size meeting.
- It should be written into the contract that all deposits and pre-payments must be returned promptly by the hotel if the planner has to cancel a meeting due to a labor dispute.
