The International Longshore and Warehouse Union (ILWU), which represents dockworkers working on the Pacific seaboard of the US and Canada, has filed for Chapter 11 bankruptcy protection.
The shock move has come about because of pending litigation between the union and an Oregon affiliate of Manila-headquartered International Marine Terminal Service Inc (ICTSI), the global terminal operating company. The dispute at ICTSI’s T6 facility in Portland centred on just two employees – both members of the IBEW Local 48 electricians union – plugging in and unplugging reefer containers stacked in the yard. The ILWU believed that this job was the responsibility of ILWU members and so initiated a series of actions to change the situation. These included work slowdowns and a landside blockade of the port, which effectively closed it for a year, resulted in customers leaving for other ports, and eventually led to ICTSI closing the business and withdrawing from the port in 2017.
In 2019, ICTSI successfully sued the ILWU, with a federal judge ruling that the ILWU’s actions had “caused damage to ICTSI’s business”. The judge awarded US$93.6M in damages. However, a year later and as a result of an appeal by the ILWU, a district court judge reduced the award to US$19M.
The dispute, which has been going on since 2012, has seen legal costs mount for the ILWU, hence its decision to file for Chapter 11 bankruptcy protection.
“While we have attempted numerous times to resolve the decade-long litigation with ICTSI Oregon, at this point, the union can no longer afford to defend against ICTSI’s scorched-earth litigation tactic,” said Willie Adams, president of the ILWU. “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 ILWU, which has over 4,000 members working across west coast ports in the US and Canada, plans to file standard ‘First Day’ motions with the court to maintain its cash management system while going through a restructuring process. There will be no impact on the union’s activities and that of dockers, who will continue to work normally.
In its bankruptcy filing, the ILWU declared that it had assets of US$11.6M, which is well below the damages award.
Chapter 11 bankruptcy is a procedure that allows businesses to reorganise their debts while continuing operations, and is often referred to as ‘reorganisation bankruptcy’.
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This complete item is approximately 415 words in length, and appeared in the October 2023 issue of WorldCargo News, on page 1. To access this issue download the PDF here
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