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How a feud over two jobs tipped the West Coast longshore union toward bankruptcy

Richard Read, Los Angeles Times on

Published in Business News

SEATTLE -- A feud that could wind up bankrupting the powerful West Coast dockworkers union began like a scene from a B-grade gangster film, when two men met over a calamari lunch.

According to federal court testimony, Leal Sundet, a burly blond union leader, introduced himself in a Portland, Ore., restaurant to Elvis Ganda, a gray-haired port terminal executive, with the words: "I'm the guy that can f-- you badly."

At that time, in 2012, Sundet held the second-highest position in the International Longshore and Warehouse Union, which handles every shipping container that crosses West Coast ports. Sundet pressured Ganda to help the ILWU wrest control of the jobs of two dockside workers from a rival union, according to court testimony. The terminal manager told Sundet that he felt as if a gun were being held to his head.

The ILWU, whose 15,000 dockworkers make an average of $171,000 a year plus free healthcare, pursued the two jobs relentlessly for the next four years, staging slowdowns at the Port of Portland and flouting federal court orders. The resulting chaos caused international shipping lines to abandon Portland, ending Oregon-based cargo service for exporters as far inland as Idaho's Snake River.

Ultimately the longshore union prevailed in the jobs dispute, as it often does -- a hollow victory, considering the terminal had been forced to close. But the menacing tactics backfired so dramatically that the ILWU may face bankruptcy, according to U.S. District Judge Michael Simon, who presided this month over a two-week Portland civil trial that led to a $94-million award to Ganda's company, ICTSI Oregon Inc.

"The amount of damages found by the jury is quite high and may result in the bankruptcy of a union that traces its beginnings to at least 1933 and arguably into the 19th century," Simon wrote after the ILWU and its Portland chapter were found liable for unlawful labor practices. He plans to hear arguments Feb. 14 on whether he should uphold or trim the award.

 

It might seem far-fetched that a dispute over two jobs could financially ruin a union so powerful that all West Coast ports shut down for days when its contract talks break down. But as automation reduces work, the ILWU has sought jobs through turf battles, quitting the AFL-CIO labor federation in 2013 and wrangling with the machinists and other unions.

The Portland jobs tending refrigerated containers were coveted by San Francisco-based leaders of the old-style union, whose members still line up daily at hiring halls, many in the footsteps of fathers and grandfathers. Robert "Big Bob" McEllrath, who retired last year as union president, said he saw precedent in the two contested Portland "reefer" jobs held since 1974 by members of the International Brotherhood of Electrical Workers.

"If I let those jobs go and demanded that they be set aside or whatever, it would bleed up and down the whole entire West Coast," McEllrath said in a deposition.

In some ways Sundet, 63, whom McEllrath assigned to pursue the jobs at Portland's Terminal 6, embodies the proudly militant approach of the union founded by the late Harry Bridges, a Marxist who won respect championing civil rights and equality. But Sundet's scorched-earth tactics stymied judges, confounded three Oregon governors, increased costs of trade and affected his reputation among fellow union members, who in 2015 voted him out of his $307,000-a-year post.

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