ILMA Compoundings – December 2019 - 28
COUNSEL COMPOUND
Union Turmoil Over
$93.6 Million Judgment
By Jeff Leiter
I
am not certain how or where this
case will end, but employers and
the legal community are watching
closely the fallout from a $93.6 million
jury verdict last month in Oregon that
has the potential to bankrupt the International Longshore and Warehouse
Union (ILWU), one of the country's
oldest and most powerful labor unions.
ICTSI Oregon Inc. (ICTSI), the
former operator of a Port of Portland
terminal, was awarded the judgment by
an eight-person jury based on allegations of unlawful boycotts by ILWU
dock workers that resulted in significant economic damages to its business
of handling shipping containers.
Let me give you some background
on the ILWU case. Six separate lawsuits
were filed in 2012 over which labor
union was entitled to perform the job
of plugging, unplugging and monitoring refrigerated shipping containers
(so-called "reefer" jobs) at Terminal T6
at the Port of Portland. The ILWU and
its local chapter, Local 8, claimed that
their collective bargaining agreement
required ICTSI to assign the reefer
jobs to ILWU members, while the
International Brotherhood of Electrical
Workers (IBEW) argued that the reefer
jobs belonged to its members based on
other labor contracts.
Eventually, the National Labor
Relations Board (NLRB) sided with
the IBEW. ICTSI said that the NLRB
decision so upset the ILWU, the union
and its Local 8 responded with unlawful
secondary boycott activities, including
unlawful work slowdowns. ICTSI
complained that ILWU and Local 8
violated federal labor laws by "inducing
and encouraging" longshoremen "to
unnecessarily operate cranes and drive
28
DECEMBER 2019
| COMPOUNDINGS | ILMA.ORG
trucks in a slow and nonproductive manner, refuse to hoist cranes in bypass mode,
and refuse to move two 20-foot containers at a time on older carts, in order to
force or require ICTSI and carriers who
call at Terminal T6 to cease doing business with the Port." An administrative law
judge, the NLRB and a federal appeals
court all sided with ICTSI following
the initial NLRB decision.
After these decisions, ICTSI
launched a court case to recover its
damages, alleging that ILWU's activities
cost it two service contracts with major
shipping companies that accounted
for nearly 98% of its business. Because
it shuttered its container-handling
operations in Portland, ICTSI claimed
damages in excess of $101 million.
Following a 10-day trial in federal court
in Oregon, the jury handed down its
$93.6 million verdict, determining that
55% of the award be paid by the ILWU
and 45% by Local 8.
The ILWU publicly said that the
jury's verdict "will impose a heavy
financial burden with serious collateral
consequences," and those consequences
"include bankruptcy." All unions, including the ILWU, file an annual LM-2
form with the Department of Labor
detailing their financial information,
and the ILWU's 2018 LM-2 reports
total assets just over $8 million, well less
than needed to satisfy the jury's verdict.
As this column was going to press,
the judge who oversaw the trial agreed
to postpone the entry of the judgment,
so that the parties could argue whether
the verdict should be reduced or set
aside. If unsuccessful, the union said
it will appeal the final ruling, meaning
that any bankruptcy filing, while a
possibility, is not imminent.
So, what does the case mean to
employers, including ILMA members?
The jury verdict is considered a major
victory for employers. Employer
groups have pointed out that the decision means that unions cannot engage
in unfair labor practices with impunity,
and, if they do, significant economic
consequences could attach to their
illegal activities. In the ICTSI case,
the ILWU and its local chapter knew
that their unlawful labor actions were
damaging the company. In the battle
over whether to set aside or reduce
the jury verdict, the argument at the
30,000-foot level is whether the court
should weigh the financial burdens on
the ILWU and Local 8 more heavily
than the burdens on ICTSI's business
they destroyed. You be the judge.
I anticipate pushback across organized
labor in the wake of the ILWU case,
regardless of whether the jury verdict in
the ILWU case is reduced or thrown out.
Because the longshoremen's union has
been dealt a possibly fatal blow by the
jury verdict, organized labor likely will
intensify, rather than cease, their "normal" activities to keep the playing field
from tilting away from them. However,
where a particular labor union is viewed
as a "serial offender" of federal labor law,
it now runs the financial risk similar to
the ILWU. To the extent that ILMA
members work with unions, expect
impacts from the ILWU case to be felt.
May your holidays be merry
and bright!
Leiter serves as general
counsel to ILMA, representing
the Association since 1981.
He may be reached at
202-466-6502 or jleiter@bmalaw.net.
http://www.ILMA.ORG
ILMA Compoundings – December 2019
Table of Contents for the Digital Edition of ILMA Compoundings – December 2019
LETTER FROM THE CEO
INSIDE ILMA
WHAT’S COMING UP
NEW MEMBERS
INDUSTRY RUNDOWN
In the Know
International Insight
Market Report
PEERING INTO THE FUTURE
BREEDING PERFORMANCE
IT’S IN THE DETAILS
BUSINESS HUB
COUNSEL COMPOUND
WASHINGTON LANDSCAPE
IN NETWORK
Member Connections
Cross Connections
PORTRAIT
ILMA Compoundings – December 2019 - Cover1
ILMA Compoundings – December 2019 - Cover2
ILMA Compoundings – December 2019 - 1
ILMA Compoundings – December 2019 - 2
ILMA Compoundings – December 2019 - LETTER FROM THE CEO
ILMA Compoundings – December 2019 - INSIDE ILMA
ILMA Compoundings – December 2019 - 5
ILMA Compoundings – December 2019 - WHAT’S COMING UP
ILMA Compoundings – December 2019 - NEW MEMBERS
ILMA Compoundings – December 2019 - INDUSTRY RUNDOWN
ILMA Compoundings – December 2019 - In the Know
ILMA Compoundings – December 2019 - International Insight
ILMA Compoundings – December 2019 - 11
ILMA Compoundings – December 2019 - Market Report
ILMA Compoundings – December 2019 - 13
ILMA Compoundings – December 2019 - PEERING INTO THE FUTURE
ILMA Compoundings – December 2019 - 15
ILMA Compoundings – December 2019 - 16
ILMA Compoundings – December 2019 - 17
ILMA Compoundings – December 2019 - BREEDING PERFORMANCE
ILMA Compoundings – December 2019 - 19
ILMA Compoundings – December 2019 - 20
ILMA Compoundings – December 2019 - 21
ILMA Compoundings – December 2019 - IT’S IN THE DETAILS
ILMA Compoundings – December 2019 - 23
ILMA Compoundings – December 2019 - 24
ILMA Compoundings – December 2019 - 25
ILMA Compoundings – December 2019 - BUSINESS HUB
ILMA Compoundings – December 2019 - 27
ILMA Compoundings – December 2019 - COUNSEL COMPOUND
ILMA Compoundings – December 2019 - 29
ILMA Compoundings – December 2019 - WASHINGTON LANDSCAPE
ILMA Compoundings – December 2019 - 31
ILMA Compoundings – December 2019 - Member Connections
ILMA Compoundings – December 2019 - 33
ILMA Compoundings – December 2019 - Cross Connections
ILMA Compoundings – December 2019 - 35
ILMA Compoundings – December 2019 - PORTRAIT
ILMA Compoundings – December 2019 - Cover3
ILMA Compoundings – December 2019 - Cover4
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