Powerful Union Expects ‘Business as Usual’ During Bankruptcy
Just months after locking down new contracts for dockworkers on the U.S. and Canadian West Coast, the International Longshore and Warehouse Union (ILWU) filed for Chapter 11 bankruptcy late Saturday.
The ILWU filed the bankruptcy petition in California federal court to resolve a 13-year-old dispute with the Oregon affiliate of the International Container Terminal Services Inc. (ICTSI).
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The lawsuit stemmed from a labor dispute at the Port of Portland, which led the National Labor Relations Board (NLRB) to find that the union and its local chapter, ILWU Local 8, had committed unfair labor practices.
ICTSI Oregon is the former operator of Terminal 6 at Oregon’s Port of Portland, where NLRB alleged that union members engaged in deliberate work stoppages and slowdowns, made false safety claims, and engaged in other coercive conduct against ICTSI Oregon and its customers. The union had accused the terminal operator of abusive management practices during the 2012 walkouts.
Container shipping at the Port of Portland ceased in 2016 after its two major container shipping partners, Hanjin Shipping and Hapag-Lloyd, pulled out due to labor disruptions. A year later, ICTSI pulled out of its port contract and abandoned its operatorship at the terminal. While container shipping returned to the port in 2018, damage to the ICTSI had been done.
Over a two-week trial in 2019, the jury returned a verdict finding that the ILWU and Local 8 had violated the law and that ICTSI was entitled to roughly $93.6 million in damages, with 55 percent allocated to the ILWU and Local 8 getting the rest.
In March 2020, a judge significantly reduced the maximum damages the union and the local branch had to pay down to nearly $19.1 million, which the union said it “was prepared to accept” and was ready to “find a way to pay the amount at that time.”
But on Friday, the ILWU argued in a court filing that ICTSI’s damages “are non-existent or minimal, at most $3.9 million.”
Sourcing Journal reached out to ICTSI Oregon for comment.
The union currently doesn’t have enough capital on hand to pay the damages. As part of the voluntary Chapter 11 petition, the ILWU listed assets of $11.6 million, including $9.5 million in cash, far below the maximum amount in the judge’s 2020 ruling.
“While we have attempted numerous times to resolve the decade-long litigation with ICTSI Oregon, Inc., at this point, the Union can no longer afford to defend against ICTSI’s scorched-earth litigation tactic,” said Willie Adams, ILWU president. “We intend to use the Chapter 11 process to implement a plan that will bring this matter to resolution and ensure that our Union continues to do its important work for our members and the community. The Officers are confident that we are taking the right step to put our organization on the best path forward—and we are optimistic for all that is ahead.”
In a letter to ILWU locals and affiliates, union leadership tried to assure members that it would continue with “business as usual.”
“Our bankruptcy filing is not a liquidation or what is often thought of when you hear the word ‘bankruptcy,’” union leaders wrote. “ILWU will continue to function normally—we will continue to provide support to our locals and affiliates, we will continue to offer education and training, we will continue our organizing programs, and we will continue to do all of the things we have always done.”
Alongside Adams, the union’s international secretary-treasurer Edwin R. Ferris, international vice president of mainland Bobby Olvera, Jr. and international vice president of Hawaii Sam Kreutz also signed the letter.
The ILWU will file customary “first day” motions with the court to maintain its cash management system and to continue honoring employee and payroll obligations during the restructuring.
The union expects the court to grant these requests.
Over the summer, the ILWU ratified two major deals for West Coast longshoremen: a six-year contract for U.S. dockworkers that improved pay and benefits for 22,000 employees at 29 ports stretching from California to Washington State, and a four-year contract for Canadian dockworkers at 30 British Columbia ports after 14 days of strikes.
