Northwest grain traders impose “substandard” contract; longshore workers report to work but continue resistance

In the Pacific Northwest, longshore workers and a consortium of grain traders maneuvered for position as the two sides sparred over a concessionary contract that the traders have imposed on some of their workers.

ILWU locals in Portland, Seattle, Tacoma, and Vancouver, Washington have been negotiating a new contract with the Pacific Northwest Grain Handlers Association, a group of international grain trading corporations that operate elevators where about one-quarter of US grain exports and half of its wheat exports are stored and shipped to Asian markets.

The companies that belong to the grain handlers’ association are Columbia Grain in Portland, owned by the Marubeni Corporation of Japan; United Grain in Vancouver owned by Mitsui of Japan; Louis Dreyfuss Commodities of the Netherlands, which operates elevators in Seattle and Portland, and TEMCO in Portland and Tacoma owned by Cargill and CHS, Inc.

The old contract expired in September, but until recently, the two sides, assisted by a federal mediator, continued to negotiate, and union members continued working under terms of the old contract.

That changed on December 18 when the grain traders announced that negotiations were at an impasse, and the association was making its last best final offer. They also implied that  if union members rejected the offer, they would be locked out.

According to the ILWU, the association’s final offer contains 750 work rule changes that affect safety and pay and give manager’s more power over workers. It also makes it more difficult for the union to take solidarity actions, which have given the ILWU and equal footing with the companies when it comes to enforcing existing contracts and negotiating new ones.

“The (association) is trying to undermine the standards that have made them rich,” said Leal Sundet, co-chairman of the ILWU negotiating committee, about the final offer. Sundet noted that United Grain reported $2.16 billion in revenue in 2012.

After members voted on the association’s offer, the union announced on December 24 that 94 percent had rejected it.

On December 26, three of the grain traders, Mitsui, Marubeni, and Louis Dreyfus, announced that they would impose the terms of the new contract but would not lock out union workers.

Workers had three choices: They could strike; they could cave into the grain traders demands; or they could report to work under the terms of new contract but continue to negotiate changes to the contract. Union leaders chose the third option. Reuters reports that a Federal Mediator on December 26 said that both sides have left the door open for further negotiations.

The union has suggested that it may file an unfair labor practice charge against the grain traders because there was no legitimate impasse.

The union’s contention appears to have some merit. “In essence, their ‘last and final’ offer was not fundamentally different than that originally presented in September,” said Sundet to the Seattle Times.

Furthermore, TEMCO appears to have broken with its association partners. TEMCO did not sign the statement announcing the final best last offer on December 18 nor the statement announcing the imposition of the new contract, and the company continues to bargain with the union.

TEMCO’s decision to continue bargaining seems to undermine the other three’s assertion that an impasse had been reached.

Should the National Labor Relations Board rule that the other three companies acted in bad faith by declaring an impasse, they would have to pay the longshore workers the difference between the new and old contract. If they continue to refuse to negotiate, the union could declare an unfair labor practices strike that would give members some protections against being replaced by scabs.

Prior to imposing the new contract, the grain traders hired a Delaware-based firm that specializes in providing security personnel and replacement workers during strikes and lockouts. Even though their union workers reported for work, the companies continue to pay the strike breakers’ salaries and living expenses while they are housed in local hotels.

The companies also hired a California company to provide tug boats staffed by armed guards to stop union actions against ships that dock at the elevators. One of the tug boats was stationed near ILWU Local 8’s union hall in Portland.

In addition to Local 8, Local 23 in Tacoma, Local 19 in Seattle, and Local 4 in Vancouver are also involved in the dispute.

The three trading companies felt empowered to seek concessions after the ILWU agreed to what it describes as a “substandard” contract in February with EGT, a new entrant into the grain trading business in the Northwest.

ILWU fought a difficult campaign to get EGT to recognize the union. Hundreds of members were arrested, and EGT only agreed to recognize the ILWU when the union and Occupy supporters prepared to block a ship from unloading grain at EGT’s new elevator at the Port of Longview in Washington.

The looming confrontation caused Washington governor Christine Gregoire to intervene and pressure the two sides to agree to a settlement.

As a result, EGT agreed to recognize the ILWU and pay industry standard wages, health care and pension benefits, and the union agreed to a contract that doesn’t contain all the worker protections in its contract with the Pacific Northwest Grain Handlers Association.

When talks for a new contract got underway, the grain traders’ association sought the same advantages that EGT had.

But the ILWU said that the EGT contract was meant to be a starting point from which to build toward making it an industry standard contract in future negotiations, rather than a new standard for the industry.

“The Northwest Grainhandler’s Agreement is a mature, decades-long contract that has made the Northwest one of the most productive export grain export regions in the world,” said Sundet. “The EGT contract will build in subsequent negotiations. The industry moguls are mistaken in thinking they can take advantage of a new competitor to downgrade their own successful contract.”