Mayor Greg vetoed the so-called "Freedom to Work" ordinance Thursday, three days after the Indianapolis-Marion County City-County Council passed the ordinance, which supporters said would make it easier for minimum-wage hotel workers employed by temporary help agencies to seek jobs directly from Indianapolis hotels.
The ordinance, Proposition 179, focused on barriers workers say make it difficult or impossible for hotels to hire temporary workers directly as full-time employees.
Ballard's rejection notice argued state law already prevents "blacklisting" and, he added, he saw no compelling evidence proving that local hotels engaged in such practices. Given the protections of existing law, he wrote the proposal "is an overreaching and overly burdensome city regulation on business because it unreasonably interferes with private entities' right to freely contract with each other."
The labor union Unite Here! pushed for the ordinance following worker complaints over how temporary employment agencies, such as Hospitality Staffing Solutions (HSS), have made agreements with their client hotels barring them from hiring temp workers directly.
Voting on the ordinance was originally slated for June, but City Council delayed the vote in order to investigate whether the new law would be fair to temporary employment agencies other than HSS, such as LGC Associates.
Andrew Downing, director of operations for LGC, said he was concerned that if the ordinance was passed then it would be easy for hotels to poach newly trained employees from his agency and damage his business. His testimony to City Council members in June, explaining why agreements between LGC and its client hotels are necessary, led the council to push back the vote until last Monday.
"This ordinance damages us if we're not able to recoup our initial investment," Downing said. "If my trained employees were taken by the hotels after only working for a few hours for us then we'd go out of business."
UniteHere! drummed up support for the legislation going into Monday's vote and packed the City-County Building with hundreds of people donning red shirts to show solidarity with the hotel workers and to support the ordinance. The supporters filled the meeting room and spilled out into the hall where they anxiously awaited the results of the City Council's vote.
The ordinance passed by a 16-12 vote with Democrats voting in favor of the proposition and Republicans in opposition.
Indianapolis is the first city where a union has taken on temporary help agencies in an attempt to make jobs better for hotel workers, according to Sarah Lyons, a spokeswoman of Unite Here!.
"What the Indy hotels look like is what the industry is
becoming in most American cities, in particular throughout the Midwest and the South,
and the Southwest," Lyons said. "This fight over subcontracting in hotels will
spread to more cities soon."
Currently, many hotel workers in Indianapolis said they feel that they are trapped in their temporary employment jobs with no hope for advancement since hotels are deterred from hiring them directly. This becomes a problem because employment agencies such as HSS pay their employees close to minimum wage and offer them no health care coverage.
Nationally, employment in temporary help services doubled from 1990 to 2008, growing from 1 percent of total employment (1.1 million) to just under 2 percent of total employment (2.3 million workers).
In addition to this trend, the temporary employment industry is hit harder than the rest of the job market during economic downturns. From December 2007 to December 2008, employment by temporary help agencies dropped by 484,000 jobs, accounting for 19 percent of the temporary help employment market, while total employment dropped by only 2.3 percent.
Some argue this higher-than-average volatility in the temporary employment job market results from businesses being able to easily hire workers from temporary help agencies when demand for them increases, and drop them when that demand goes away.
Through the "Freedom to Work" ordinance, Unite Here! said it hopes to allow hotel workers to have the opportunity to eventually leave the temporary employment industry and seek more stable jobs that will provide them with financial support and health care even when the country faces a recession.
Lyons said, "These folks are the backbone of the hotel industry, and yet they live in the shadows."