Just a few weeks ago, the dockworkers union celebrated as its members approved a new six-year contract, ensuring peace at major West Coast ports. However, the union is now facing bankruptcy protection due to a hefty court judgment regarding allegations of labor slowdowns during a 2011 dispute — similar tactics that were used during the recent contract negotiation. The implications of this situation have labor experts worried about the precedent being set.
In a news release this week, Willie Adams, the president of the International Longshore and Warehouse Union (ILWU), stated, “We intend to use the Chapter 11 process to resolve this matter and ensure our Union can continue its important work.” The union plans to operate normally, but will not be able to fund its defense against the lawsuit brought by a former shipping terminal operator in Oregon.
The terminal operator, ICTSI Oregon Inc., based in the Philippines, did not provide a comment. However, in a statement emailed to Reuters, the company called the bankruptcy filing the union’s “latest maneuver to avoid accountability.”
Labor specialist Ken Jacobs, Chair of the UC Berkeley Center for Labor Research and Education, expressed concern about the precedent being set, saying, “People are very concerned about an employer suing a union over labor activity. The severity of the penalty is also disconcerting.” Nelson Lichtenstein, director of the UC Santa Barbara Center for the Study of Work, Labor and Democracy, echoed this sentiment by stating, “It means that employers will exploit any legal opening to bankrupt or weaken existing unions.”
The case revolves around a labor dispute involving just two jobs between ILWU and ICTSI Oregon at a relatively insignificant seaport in terms of cargo container volume. The conflict began when ILWU leaders demanded the two jobs previously held by the electricians’ local, after ICTSI signed a lease with the Portland port in 2011 to run the container yard. ICTSI claimed that the union engaged in work slowdowns and argued that the port controlled the job assignments. As a result of the dispute, international shipping lines stopped sending containers to Portland.
To terminate its lease, ICTSI paid the port $20 million and filed a lawsuit against the union seeking damages for losses. A federal jury found the union guilty of illegal labor practices and awarded the company $94 million, which was later reduced to $19 million by a U.S. District Court judge. However, ICTSI rejected this lowered amount, leading to a retrial scheduled for next year and ultimately prompting the union to file for bankruptcy.
“After numerous attempts to resolve the decade-long litigation with ICTSI Oregon, Inc., the Union can no longer afford to defend against their aggressive legal tactics,” said President Adams.
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