Perez says economic fallout required speedy end to West Coast port dispute
ILWU, PMA agree to transform arbitration system, labor secretary says.
Excerpt from American Shipper | By: Eric Kulisch | February 23, 2015
The tentative deal Friday evening between the West Coast longshoremen’s union and terminal operators fundamentally overhauled the arbitration system that had been a major bone of contention and was necessary because resulting port disruption was causing too many innocent victims, Labor Secretary Thomas Perez said in a television interview Monday afternoon.
Importers and exporters of all stripes were losing money because of the cargo delays as ports filled to capacity with containers due to slow work practices and not enough labor being ordered by terminals as each side tried to put pressure on the other. And port officials say thinning out the container yards could take a couple months or more.
“I think it was an agreement that was good for both sides. We crossed the end zone, but nobody is spiking the football because there was a lot of collateral damage” throughout the economy, Perez said on the Fox Business program “Closing Bell.”
After reaching agreement on wages, benefits and work rules, the International Longshore and Warehouse Union and Pacific Maritime Association, remained at loggerheads over the union’s demand to allow either side to dismiss one of the four arbitrators that interpret multi-year contracts. The arbitrators quickly adjudicate disputes over safety and other issues to keep one side or the other from shutting down the terminals. Under current practice, arbitrators are selected by both sides and can only be dismissed by mutual consent. Arbitrators have sided with PMA in the majority of cases the past six years and the ILWU was particularly keen on ousting the arbitrator in the Southern California region even though he is a former ILWU official and was nominated by the union.
Perez said the new arbitration system is dramatically different and improved from the previous one.
“They didn’t just reach middle ground. They actually got to higher ground. I think that will be very helpful for the effective functioning of the 29 ports up and down the West Coast,” he said.
The importance of arbitrators was made clear over the weekend at the Port of Oakland after a dispute over break times. An area arbitrator ruled that ILWU Local 10 conducted an illegal work stoppage, enabling operations to return to normal on Sunday.
Details of Friday’s agreement have not been released, but the Associated Press reported Saturday the deal would require arbitrators to reapply for their positions, attributing the information to Perez.
The secretary of labor, who previously was an assistant attorney general for civil rights in the Justice Department, rejected the notion that the Obama administration should have invoked the Taft-Hartley Act to force the sides to work at full speed.
“We would have been thrown out of court in a New York minute” because the trigger for using such an emergency measure is a strike or lockout, and neither of those conditions was in place, he said.“I’m a big believer in the collective bargaining system,” Perez said, noting that the sides were making progress with a federal mediator before stalling over the arbitration issue.
The biggest pressure to reach a deal was not the possibility of a government threat, but market competition from the Panama Canal, and ports in Canada, Mexico and East Coast states, he insisted.
“I did not get a call from the mayor of Savannah. They were loving life with the extended business,” Perez said.
Asked how the nation could avoid a similar disruption in five years, Perez suggested that the union and management start talks earlier rather than wait until the contract has almost expired.