To settle a bitter decade-long legal dispute, America’s West Coast longshore union is paying $20.5 million to a company run by a Philippine billionaire.
According to a joint Feb. 1 announcement, the settlement with ICTSI Oregon makes it possible for International Longshore and Warehouse Union (ILWU) to withdraw its application for Chapter 11 bankruptcy protection.
ICTSI Oregon is a subsidiary of Philippine-headquartered ICTSI (International Container Terminal Services, Inc.). ICTSI, a leading privatizer of publicly owned ports worldwide, operates 32 shipping terminals in 19 countries. Its CEO Enrique Razon Jr. is a grandson of the founder and has a fortune estimated by Forbes to be $9.1 billion.
Until 2010, Port of Portland — a tax-supported public agency — operated Terminal 6 on its own. Located on the Columbia River next to Kelley Point Park, Terminal 6 is Portland’s only container shipping terminal. But in May 2010, the Port privatized it, signing a 25-year lease agreement with ICTSI. Terms of that lease were at the heart of an epic dispute that halted container shipping in Portland for five years.
Which union for reefers?
The saga began when ICTSI started operating the terminal in 2011 and used two members of another union to plug in refrigerated shipping containers when those arrived at the terminal. That job — known as “reefer” work — had been done by members of International Brotherhood of Electrical Workers (IBEW) Local 48 since 1974. When Port of Portland ran Terminal 6 directly, it had employed ILWU members to load and unload ships and IBEW Local 48 members to do the reefer work. (The Local 48 members were covered by a contract with the multi-union District Council of Trades Unions (DCTU) covering workers who maintain port equipment; that contract did not include ILWU.)
In its lease with ICTSI, the Port stipulated that DCTU members would continue to be employed by the Port doing the work they’d historically done, and that ICTSI would reimburse the Port for those services.
But ILWU argued that ICTSI had its own separate commitment to use ILWU members for the reefer work. In June 2010, ICTSI became part of the multi-employer Pacific Maritime Association (PMA). PMA is an association of West Coast stevedoring companies that negotiates a master labor agreement with ILWU that sets terms and conditions for the longshore workers who load and unload ships. ICTSI signed PMA’s collective bargaining agreement with ILWU, and a clause in that contract said that it would employ ILWU members to do the reefer work.
ILWU has been tenacious in promoting its jurisdictional claims to dock work over the years. Shipping terminals are not just portals for trillions of dollars of international trade; they’re also one of the few logistical chokepoints where working people have a chance to benefit from foreign trade. Thanks to their fiercely defended union contract, West Coast ILWU members make more than $100,000 a year loading and unloading ships. But longshore jobs have been in steep decline for 60 years, since standardized metal containers and gigantic gantry cranes replaced brawny men with hooks and winches.
Starting in the 1960s, ILWU agreed not to oppose the introduction of new technologies in exchange for assurances by PMA that ILWU members would be the ones to maintain the new equipment. That agreement has sometimes placed ILWU in conflict with other unions representing dock maintenance workers.
A disciplined slowdown
The dispute that broke out at Terminal 6 in 2012 is described in great detail in a September 2015 ruling by a three-member panel of the National Labor Labor Relations Board (NLRB) in Washington, D.C. Board members rightly described it as a “highly complex and very technical labor dispute,” but it’s possible to break it down to some essentials.
When ICTSI began operating the container berths at Terminal 6 on February 12, 2011, Portland-headquartered ILWU Local 8 demanded that it adhere to the PMA contract and assign the reefer work to its members. ICSTI said it couldn’t do that because of the terms of its lease.
It’s not clear why ILWU delayed action — it may have first tried to get the Port to drop its lease requirement — but starting June 1, 2012, ILWU members at Terminal 6 began an extraordinarily disciplined and coordinated set of actions to assert jurisdiction over reefer work that continued off and on over the next days, weeks, and years. According to testimony in the case, ILWU crane operators who normally offload up to 25 containers an hour were offloading three or four. Other ILWU members were moving containers through the terminal at 1 mile per hour, where normally they would go 15. Groups of ILWU mechanics started doing the reefer work themselves, were told to stop, did it anyway, and were fired on the spot, until all mechanics on duty were fired. At that point, ILWU machine operators reported various mechanical breakdowns, and because there were no mechanics to repair them, declared the equipment out of commission. The union hiring hall refused to dispatch new mechanics to replace the fired ones, or in some cases sent unqualified workers. ILWU crane operators stopped unloading a ship, and in one instance, the union hiring hall refused to dispatch a night shift crew of longshore workers. ILWU clerks refused to tell electricians where and when reefers (refrigerated containers) would be placed. Other members used trucks to block access to the reefer plug-in area.
Container work slowed to a crawl. Trucks began lining up outside the terminal and had to be sent away.
On June 4, ILWU asked PMA to hold an immediate arbitration hearing to resolve the dispute. An arbitrator determined that ICTSI was violating its obligation under the union contract and directed the company to start assigning the reefer work to Local 8 members. ICTSI’s terminal manager responded that the company would not be doing that.
In separate instances, a PMA arbitrator found ILWU was also violating the contract by conducting slowdowns and work stoppages, and the arbitrator ordered it to stop.
On June 5, four days into the chaos, ICTSI filed charges with the NLRB saying ILWU was violating federal labor law — committing “unfair labor practices” in NLRB parlance. Some workers may know the NLRB as the agency that’s supposed to protect their right to form a union, but the NLRB also enforces a set of anti-union amendments to the National Labor Relations Act that passed in 1947 as the Taft-Hartley Act. ICTSI accused ILWU of violating two of those. Section 8(b)(4)(D) bars “jurisdictional” strikes or any other kind of economic pressure by unions to get an employer to hire members of one union instead of another. (Instead, unions are supposed to ask the NLRB to decide which union has legitimate jurisdiction). Section 8(b)(4) bars “secondary boycotts” that target one employer in order to influence another (for example, ILWU targeting ICTSI to get the Port to hire its members). And the law says that if unions are found to have committed those violations, employers can sue them for economic damages.
That’s exactly what happened. In August 2012, the NLRB determined that the work was properly IBEW Local 48’s jurisdiction based on past precedent. The NLRB found that the ILWU slowdown was violating the law, because assigning the work was up to the Port, and that the Port wasn’t bound by the PMA contract. Even though ICTSI was bound by the PMA contract, the NLRB said it didn’t have the power to assign the work; therefore, it was a “secondary” employer.
The ILWU lost at every stage as the case ran through three years of appeals.
But the job actions continued, taking a toll on shipping as the case dragged on. South Korean shipping giant Hanjin, which accounted for about 80% of container volume at Terminal 6, threatened to stop coming to Portland. In February 2014, rather than give in and award the two reefer jobs to the ILWU, Port of Portland agreed to pay Hanjin $20 per container, up to $4 million a year, to stay.
It wasn’t enough. In February 2015, Hanjin notified ICTSI its ships would no longer stop in Portland. Two months later, German shipper Hapag-Lloyd pulled out too.
ICTSI sues for damages
In 2017, with no prospect of resuming container shipping, ICTSI paid the Port $11.5 million to terminate its lease, ending its first and only effort to operate a shipping terminal in the United States.
Once ILWU had exhausted every appeal with the NLRB, ICTSI moved forward with a lawsuit against the union for damages caused by its actions. In November 2019, a jury ruled that ILWU and its Portland Local 8 must pay $93.6 million in damages to ICTSI. In March 2020, the judge in the case ruled that ICTSI had grossly inflated the slowdown’s economic harm and lowered the jury award to $19 million. ICSTI didn’t accept that reduction and asked for a new trial on the damages question. That trial was supposed to begin this month.
On Sept. 30, 2023, ILWU filed for bankruptcy protection, saying that it would not be able to pay even the $19 million. ILWU Local 8 filed too, on Oct. 18. (According to the most recent annual disclosures, ILWU listed $10.7 million in assets, and Local 8 had assets of $428,000.)
As the chief creditor in the bankruptcy proceedings, ICTSI made it known that it might try to collect the assets of related organizations, including the ILWU Coast Longshore Division (a district council of ILWU), which most recently reported $19.3 million; and the Pacific Longshoremen’s Memorial Association, a nonprofit created in 1957 to hold title to the ILWU’s national headquarters. (Located at 1188 Franklin St. in San Francisco, the Harry R. Bridges Memorial Building is a four-story 39,000-square-foot office; it’s also home to the San Francisco Labor Council.) ICTSI also increased its estimate of what ILWU would owe in damages to more than $209 million.
The settlement ICTSI and ILWU announced Feb. 1 puts the 13-year dispute to rest.
ILWU is famed for its slogan “an injury to one is an injury to all.” But that took on a new meaning during the 13-year war at Terminal 6. Matching stubbornness for stubbornness, ICTSI lost its terminal, the Port lost its tenant and revenue, ILWU members lost work, and ILWU lost $20.5 million, $635 for every member.
Container shipping did eventually return to Terminal 6. With ICTSI out of the picture, the Port of Portland resumed direct operation of the terminal, through a stevedore contract with Harbor Industrial. A South Korean carrier called SM Line began weekly container shipping through Portland in 2020.
And the reefer work at Terminal 6? It’s now done by members of ILWU.
ILWU and ICTSI were locked in battle for more than a dozen years. Now they’ll stand down. The settlement has a non-disparagement clause: Neither side can issue any written or oral statement (including through The Dispatcher, ILWU’s newspaper) that is disparaging, deleterious, or damaging to the integrity, reputation, or goodwill of the other — until six years from now.
So, was it was Democrats Ted Kulongoski or John Kitzhaber that privatized the port?
The port of Portland, like the port of Coos Bay, is the bailiwick of the Governor. The governor appoints the port commission not voters.
In the 1960’s My union the AWPPW, was recognized by no one, save the ILWU.Thus began a relationship that lasted over 60 years In my seventies as president of the Longview Fibre Retirees Group,I invited local 28’s members to share fellowship with us at our yearly potluck. At the age of eighty-one I am watching the demise of my union. An injury to one is an injury to all. Solidary! Richard Dreier AWPPW local 153, Retired.