For decades, the International Longshore and Warehouse Union has solidified its power with aggressive demonstrations of solidarity across its Pacific ports.
That includes a series of actions beginning in 2012, when dockworkers in Portland, Oregon, implemented a slowdown, at least in part to protest two positions they believed should be going to the union’s members. The company operating the port went to court, contending that the job actions that continued for years were illegal and financially destructive.
Seven years later, a federal jury has agreed, awarding the company a stunning $93.6 million judgment.
At the ILWU, which has $8 million in assets at its national umbrella organization, the ruling this month threatens bankruptcy for a storied organization that grew from militant roots in the 1930s to lead unions on matters such as racial integration and ambitious regional organizing goals. But the verdict, if sustained anywhere close to its current magnitude, could embolden employers frustrated by labor disruptions while chilling the activities of unions that are just finding their footing after decades of setbacks.
“It’s more than a chilling effect. It’s an ice age-level impact,” said Nelson Lichtenstein, a professor at the University of California, Santa Barbara who studies the history of labor movements. He deemed the ruling “an extremely dangerous precedent.”
Because of the size of the verdict, the federal judge in the case has yet to finalize the award, giving both sides time to submit arguments on whether the jury’s decision should stand.
The case revolves around provisions under federal law related to secondary boycotts, which are prohibited in order to protect companies that do not have a stake in a labor dispute from getting dragged into the middle of it.
The jobs that the ILWU wanted were being managed directly by the Port of Portland, and the company operating the port contended the slowdowns over those positions improperly punished them for a dispute that should have been between the port and the ILWU.
With much of the economy now involving a mesh of companies interacting with each other in layers of contracting and subcontracting, especially in sectors such as the construction and logistics industries, it is not just the ILWU that could face consequences as a result of the ruling, Lichtenstein said.
“It shows the unworkability of the prohibition on secondary boycotts in a world of fissured employment, of supply chains, of the gig economy,” he said.
The issue has simmered in the background of the 2020 presidential campaign. Two Democratic candidates, Bernie Sanders and Elizabeth Warren, have policy proposals seeking the elimination of the secondary boycott rule, characterizing it as a matter of free speech.
History of Activism
The ILWU was born out of the economic angst of the Great Depression, founded by Harry Bridges, who had a few years earlier led a strike of waterfront workers on the West Coast during which two longshoremen were killed in San Francisco.
Unions began gaining power thanks to the National Labor Relations Act, passed in 1935, after decades of businesses using litigation to crush unions, said Catherine Fisk, a professor of law and legal historian at the University of California, Berkeley, School of Law.
The ILWU built power through activism. It supported other unions, joined efforts to expand into other parts of the supply chain, and pushed for racial integration ahead of other organizations around the country, Fisk said.
Around the country, unions have seen declining numbers along with a dramatic drop in the frequency of large labor strikes in recent decades. That trend has just started to reverse with the number of large strikes last year reaching the highest level since 1986.
Two Jobs in Dispute
The Portland case from 2012 began as a labor dispute over a pair of reefer jobs at the port’s Terminal 6.
The company hired to operate the port was ICTSI Oregon, a subsidiary of International Container Terminal Services Inc. It had just started a lengthy lease operating the terminal. But while the ILWU believed the reefer jobs — involving the plugging and monitoring of refrigerated shipping containers — should go to their union members who were working under ICTSI, those jobs were being managed by the port itself.
For nearly 40 years, the reefer work had been performed by port employees who were represented by two other unions, and the terms of the company’s lease with the port called for them to remain employed by the port, ICTSI lawyers argued.
With no resolution to the standoff, ICTSI said in its claim, union workers began engaging in work stoppages, slowdowns and safety gimmicks in order to pressure the company to try to get the jobs from the port, when the port alone should have been the target of their protests. The company said it suffered as a result, ultimately abandoning its operations at the port. In the lawsuit, it sought damages as high as $135 million.
Port officials declined to comment on the case but said the facility has a positive working relationship with the ILWU.
The secondary boycott prohibition under labor law has complicated matters for a variety of unions. California-based ironworkers recently tried to challenge whether the prohibition is constitutional, arguing in part that it violates free speech protections. A federal appeals court rejected that challenge last month.
In the ILWU case, the union contended that its relationship with ICTSI was also souring over issues other than the reefer jobs and that workers had safety concerns about the company’s operations.
William Adams, the ILWU’s international president, said in a statement that the company’s lawsuit appeared to be “union-busting on a global scale.”
In the verdict on Nov. 4, the jury found the union liable for $93.6 million in damages, with 55% to be paid by the international union and the remainder paid by the union’s Local 8 in Portland.
In a statement, the ILWU said it has acknowledged that it may owe some damages in the case, but the union blamed ICTSI for mismanagement that led to the problems at the terminal, along with broader market forces.
The union petitioned the judge to hold off on finalizing the verdict. Judge Michael H. Simon of the U.S. District Court in Portland agreed, saying the exceptional verdict could result in the bankruptcy of the union. Arguments on that issue are set for early next year.
“If this damages judgment is upheld, I think every union lawyer needs to have hard conversations with their union leaders,” Fisk said.