In October 2021, Willie Adams, president of the International Longshore and Warehouse Union (ILWU), sat across the table from President Joe Biden at the White House. The two met again at the White House last month, celebrating the new six-year labor contract for America’s West Coast ports.
“I’ve known Willie for a long time,” said Biden after the latest meeting. “I was kidding him: I said I want to know who his haberdasher is. He looks awfully good, doesn’t he? I like that cut.”
Just a few weeks later, Adams is engaged in a far less prestigious task: securing Chapter 11 protection for his union in the Bankruptcy Court of Northern California.
Adams proposed a restructuring plan in a court filing Monday calling for the ILWU to hand over substantially all of its remaining cash — $9.5 million — save for “a reserve for working capital necessary to enable the ILWU to maintain its operations and rebuild.”
The recipient of the proposed payout: International Container Terminal Services Inc. (ICTSI), a global terminal operator based in Manila, Philippines.
The irony is that the bankruptcy of one of America’s highest-profile unions, representing over 40,000 workers, whose president hobnobbed with Biden, began with a feud over two electrician jobs a decade ago at a niche container facility in Portland, Oregon.
New trial too expensive for ILWU to bear
A jury decided in November 2019 that the ILWU owed ICTSI $93.6 million in damages for unlawful practices including work stoppages, slowdowns and other coercive actions starting in 2013 at the ICTSI terminal in Portland.
The terminal lost its shipping line clients and ICTSI terminated its lease in 2017, paying over $11 million in penalties to get out early (it had signed a 25-year lease in 2010).
Oregon District Court Judge Michael Simon ruled in March 2020 that the jury award was far too generous. He set maximum damages at $19.06 million — if the two sides would agree. If not, there would be a new trial on damages. ICTSI didn’t agree.
The appeals process is over on arguments about guilt or innocence: By law, ILWU owes ICTSI. The new trial on damages was set to begin in late February 2024. ICTSI was seeking $48 million-$142 million.
The ILWU estimated that it would have to pay $8.5 million in additional legal fees during the new trial on top of any damages awarded, thus the Chapter 11 filing that halts the trial process.
A decade-old ‘symbolic’ dispute
The events leading up to the current situation were recounted in the 2020 ruling by Simon.
They occurred years before Adams was elected president of the ILWU in 2018, before COVID and the supply chain crisis put West Coast dockworkers in the spotlight in 2021-2022, and before contentious negotiations on the new labor contract spawned fresh supply chain fears in early 2023.
When ICSTI began operating Portland’s Terminal 6 in 2010, jobs for electricians plugging, unplugging and monitoring refrigerated containers (reefers) continued to be controlled by the Port of Portland, which assigned them to two electricians of a rival of union of ILWU, the International Brotherhood of Electrical Workers (IBEW).
This conflicted with the labor contract between the ILWU and the Pacific Maritime Association (PMA), the organization that represents West Coast terminals. The contract called for ILWU members to handle reefer jobs at PMA-member terminals, including Portland’s.
The Portland dispute wasn’t just about the two electrician jobs, it was about the principle, according to ILWU testimony.
As recounted by Simon, “ILWU National’s then-President Robert McEllreth testified that the Terminal 6 reefer jobs were ‘symbolic’ of jobs ‘up and down the coast’ and that to ‘let those jobs go … would bleed up and down the whole entire West Coast and … would undermine the contract.’”
Leal Sundet, then an official of ILWU National, testified that “any time you have a contractual matter that any one given PMA employer refused to comply with, that’s an assault on the fabric of the [labor] agreement. Because why would the next PMA employer need to comply with the agreement, and the one after that? If you let the PMA member companies start picking and choosing what parts they’re going to comply with, then you don’t have a contract any longer.”
After ICTSI terminated its lease in 2017, the Port of Portland, the PMA and the ILWU agreed that the reefer jobs would be handled by ILWU members in future container operations at Terminal 6. But by that time, the damage was done. The ICTSI lawsuit — which would eventually result in ILWU’s Chapter 11 filing — had been set in motion.
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