Vice President, Labor Policy, U.S. Chamber of Commerce
November 02, 2023
In the latest turn of events in a long-running legal dispute, the International Longshore and Warehouse Union (ILWU) filed for Chapter 11 bankruptcy protection in federal court at the end of September. The union represents 22,000 dockworkers at ports along the west coast, and its apparent financial woes stem from a lawsuit involving International Container Terminal Services, Inc. (ICTSI), which at one time managed cargo port operations in Portland, OR.
In 2012, the ILWU first filed a complaint with the U.S. District Court in Portland seeking an order to enforce the terms of a contract to which all west coast port operators and the ILWU were parties. Specifically, the complaint accused ICTSI of failing to assign two specific positions known as reefers, who work with refrigerated cargo containers, to ILWU-represented mechanics after it took over cargo operations in Portland in 2011. The ILWU asked the court to order ICTSI to assign the disputed work to ILWU mechanics.
While that was the impetus for the whole saga that would come, the case very quickly devolved into a series of claims and counterclaims in an 11-year (and counting) lawsuit. The main problem for the ILWU was that the reefer work was done by individuals who worked for the Port of Portland, not ICTSI, and they were represented by another union. Nevertheless, the ILWU engaged in a series of labor actions designed to maximize pressure on ICTSI to get it, in turn, to pressure the Port of Portland to reassign the work, which happens to be illegal.
In particular, the union orchestrated work slowdowns that created significant delays and drove ocean-going cargo business away from Portland for over a year. The dispute eventually led to the loss of Portland's container ship service altogether in May 2016, and ICTSI ended its contract with the Port of Portland in March 2017. ICTSI counter-sued the ILWU and its Local 8 affiliate, claiming that the company’s resulting losses amounted to as much as $142 million.
In November 2019, a jury agreed that the ILWU had engaged in unlawful conduct and returned a verdict in favor of ICTSI for approximately $93.6 million. However, the judge later reduced the jury’s award to $19 million. In his order, the judge gave ICTSI the option of accepting the lower amount or a new trial to determine damages. Thereafter, the Ninth Circuit considered appeals from both sides and denied them, saying it lacked jurisdiction.
Now, the case is back before the district court, where the ILWU has desperately tried to find a way out of its legal predicament by attempting to re-litigate the whole case. Failing that, the union’s bankruptcy filing prompted an automatic stay, so it will enjoy a reprieve, for now. That stay does not apply to Local 8, however, and the court scheduled that case to proceed with a jury trial for damages in February.
While it remains to be seen what the district bankruptcy courts ultimately decide, the move underscores the fact that there is a price to pay when unions take things too far—not only for the union, but for the cargo workers it claimed to represent, who presumably no longer have jobs at the port at all. Either way, it will be ILWU members who pay that price.