The Taft-Hartley Act gives presidents ability to intervene in damaging work stoppages such as the one engulfing West Coast ports.
Oregon’s congressional delegation is urging President Obama to force ocean shipping companies and longshoremen back to regular operational tempo at West Coast ports if they can’t quickly end a labor dispute that has created severe gridlock and cost businesses hundreds of millions of dollars in lost sales, spoilage and extra transport fees. Some members also asked the union and management to agree to binding arbitration, assisted by the federal government.
Pacific Northwest farmers and agricultural producers have been particularly hard hit by the partial port shutdown resulting from slow work practices initiated by the International Longshore and Warehouse Union and waterfront employers’ decision to order fewer crews to move cargo.
Last week, South Korean ocean carrier Hanjin announced it would cease calling at the Port of Portland in Oregon next month because productivity has plummeted almost 50 percent to 13 crane lifts per hour. Three hundred fifty-nine Oregon companies and organizations and another 222 in Washington also signed letters to their representatives pleading for help to end the port disruption. In January alone, cherry growers in Oregon lost more than $250,000 in export sales directly related to port disruption, according to the Agriculture Transportation Coalition.
The sides have been working without a contract, which covers about 20,000 dock workers at 29 ports, since July. Negotiations began to take a turn for the worse four months ago, compounding existing congestion caused by volume growth, poor planning and intermodal inefficiencies.
While some lawmakers have recently urged the president to use special emergency powers if there is a strike or lockout, Oregon House members are suggesting that the Taft-Hartley Act be invoked sooner if the ILWU and Pacific Maritime Association can’t come to an agreement.
PMA is the bargaining association for terminal operators, stevedores and vessel operators.
“It is time for the PMA and the ILWU to put their differences aside and conclude these negotiations immediately. If they refuse to do so I urge the president of the United States to use his powers afforded under Taft-Hartley to end this dispute once and for all,” Rep. Kurt Schrader, a Democrat, said Feb. 12 at a press conference on Capitol Hill, video of which is posted on YouTube.
The 1947 Taft-Hartley Act is a broad piece of legislation vilified by unions for rolling back many worker rights from the New Deal. One of the provisions allows the president to declare a national emergency and appoint a fact-finding board if a strike or lockout occurs that threatens an industry, or a substantial portion of it, at the expense of the nation’s economic health or safety. Upon receiving a report from the board of inquiry, the president can ask the Justice Department to seek an injunction from a district court to halt the strike or lockout. An affirmative decision that the labor action is harmful to the economy triggers an 80-day cooling off period during which negotiations are to continue with the help of federal mediators. At the end of 60 days, if there is no resolution, the board of inquiry must submit a follow-up report to the president about the current state of the talks and the National Labor Relations Board will conduct a secret ballot of employees within 15 days to see if they would accept the employer’s final settlement offer. After that, the attorney general is to request an end to the injunction.
Most observers assume no action will be taken until there is an actual strike or lockout, but the law technically refers to “threatened” as well as actual work stoppages. Earlier this month PMA President Jim McKenna indirectly warned that there could be a lockout in a matter of days because the slowdown is equivalent to a strike with pay, and terminal operators can’t bear the cost anymore. And PMA suspended vessel operations for four of the past five days in order not to pay weekend and holiday wage rates for poor productivity.
PMA’s latest offer would raise ILWU wages by 14 percent over five years, on top of current average full-time wages of $147,000 per year.
The contract would also maintain full employer-paid health care, worth $35,000 per year, and increase the ILWU pension to as much as $88,880 per year. Further, it would increase pay guarantees to 40 hours per week, and provide for ILWU jurisdiction over the maintenance and repair of truck chassis.
Unions tend to oppose federal intervention because they believe it gives employers an excuse to claim economic harm and short-circuit negotiations to get their way.
Taft-Hartley has been invoked 36 times in the past 65 years to keep labor unions working during contract disputes, but has failed in many cases, according to a blog post by Harold Coxson of the Olgetree Deakins law firm. The last time Taft-Hartley was invoked was by President George W. Bush in 2002 when the PMA locked out longshoremen for 10 days. Bush even threatened military intervention to end the lockout.
Then, as now, container vessels were anchored at sea with no berths available and cargo piled up in container yards. Logistics professionals say that even without a full-on port shutdown it will take weeks to remove all the containers from storage and get intermodal supply chains moving smoothly again.
President Obama in early January made federal mediators available at the request of the two sides, although many business groups said they felt the White House should have pushed sooner to get involved. White House officials have repeatedly said the dispute is something that private parties should resolve themselves. Over the weekend, Obama dispatched Labor Secretary Thomas Perez to California to try and find a compromise.
Labor unions were strong supporters of Obama in both his presidential campaigns and some wonder how quickly he’ll seek injunctive relief.
The National Retail Federation and the National Association of Manufacturers sponsored a report last summer that estimated Gross Domestic Product would lose $2 billion per day in the event of a port shutdown, although economists with different methodologies say the impact would be less.
West Coast ports handled 340.2 million tons of cargo (266 million tons in containers) in 2013. The goods that move through West Coast ports are tied to 12.5 percent of U.S. GDP.
Rep. Schrader along with Dave Reichert and Dan Newhouse, both Republicans from Washington, and Jim Costa, D-Calif., introduced a House resolution last week expressing the sense of Congress that in the event of a strike or lockout, the administration must intervene to protect jobs that rely on the ports.
“This is one of the gravest threats to our nation right now,” the members said in a statement. “We are seeing businesses, farmers, and manufacturers, affected all across the country. The slowdown is not just a West Coast problem, but a national problem. U.S. agriculture exports are down by over $440 million a week. The standstill in the negotiations has gone on for far too long and cannot continue.”
Oregon’s five House members on Friday wrote President Obama urging him to use the emergency-dispute settlement procedures should the port crisis continue much longer.
The state’s senators, Ron Wyden and Jeff Merkley, on Friday asked ILWU President Robert McEllrath and PMA’s McKenna to agree to binding arbitration through the federal mediation service and to “immediately resume port operations at full capacity while the final issues are negotiated.”
Their letter said, “We are concerned that if a new collective bargaining agreement is not reached soon, thousands of Oregon jobs will be in jeopardy, and in the long term, demand for American made products and agricultural commodities could significantly diminish.”
In an interview Thursday on Fox Business News, Port of Long Beach CEO Jon Slangerup said arbitration is the only remaining issue dividing the union and the terminal operators. “Everything else has been resolved, as I understand it,” he said.
Jonathan Gold, vice president of supply chain at the National Retail Federation, said Monday on the same program that arbitration is one of several items still being haggled over. “We’re not a party to the negotiations, we’re not there at the table, so we’re really not sure where things stand,” he added.
PMA recently revealed that the ILWU is demanding the right to fire arbitrators at the end of each contract period. The parties previously picked four arbitrators who each oversee a geographic region, but they can only be removed by mutual consent. The contract’s no-strike clause is frequently relied upon in grievance disputes, which the PMA said have gone its way 85 percent of the time in the past six years.
Oregon’s $5.4 billion agriculture industry exports more than 40 percent of its products and stands to lose a significant amount of money if cargo continues to rot on the docks, orders are cancelled and customers turn to other suppliers, Rep. Schrader said.
Other victims include Mastercraft Furniture, which had to furlough 180 people, and straw exporter BOSSCO Trading. BOSSCO is averaging $2,000 per day in additional expenses paying overtime for truckers to driver further to Seattle instead of Portland and extra storage charges to terminals. “They are shipping 50 percent less containers every week and 99 percent of their bookings are anywhere from a week to six weeks behind,” the congressman said.
More than 900 businesses depend on Portland to get their goods to and from international markets, and the Hanjin service supports an estimated 657 direct jobs and $33 million in wages annually, according to the port authority.
Consumers likely won’t see higher prices because of the current supply chain bottlenecks, but “there’s a tremendous pressure on profitability. A lot of people have absorbed a lot of cost,” Slangerup said on Fox Business.
Transitioning dockworkers to more high-tech jobs for better productivity was one of the early issues in the union-management negotiations, he elaborated. McKenna two weeks ago, however, publicly denied that automation has been a part of the talks at any point.
“The union has to come to grips with that, but they wanted to make sure the training was there so they could train for the next type of job that is coming. So their demands are not unreasonable given the changing environment. But still, these kind of negotiations where they effect the entire retail industry are just so damaging,” the port director said.
Will Obama use emergency power to end port labor dispute?
