Thursday, September 29, 2011

Lease Language at Heart of Longview Labor Strife

At the center of an ongoing labor dispute at the Port of Longview, one that has as times spilled into neighboring Washington ports, is the meaning of two paragraphs in a more than 160-page lease agreement between EGT Development and the port authority.

While EGT disputes the meaning of the lease language – and has filed suit in federal court against the port over it – the port and local dockers union maintain that the language is unambiguous.

EGT signed the 30-year lease with the port in June 2009 after nearly two years of negotiations. Under the lease terms, EGT agreed to develop and operate a $200 million grain export facility at the port. The completed facility was nearly ready to open earlier this year when a dispute over staffing the facility arose.

The International Longshore and Warehouse Union claim that the lease signed by EGT requires the firm to hire ILWU workers for roughly 25-30 positions at the terminal – positions that fall under the port's labor agreement with the ILWU and similar to positions performed by ILWU members at other facilities.

According to the ILWU, EGT and the union met in 2010 to work out the terms of staffing the grain facility. However, on Nov. 23, 2010, ILWU Local 21 president Dan Coffman notified the port governing board that EGT had ended the negotiations, telling the union that EGT had "no need for our services."

In response to this claim by the ILWU, the port sent a Dec. 3, 2010 letter to EGT CEO Larry Clarke informing the firm that it was obligated under the terms of the lease, and the labor contract between the ILWU and the port known as the "working agreement" (WA), to hire ILWU members.

"The Port believes that under these provisions of the ground lease, EGT must adhere to the WA for the types of traditional longshore/warehousemen jobs which the WA expressly describes," the port letter said.

The letter went on to say that if EGT disagreed, "then we have a serious dispute under our ground lease which the Port believes should be very promptly presented to the appropriate court and resolved in a declaratory judgment action."

On Jan. 12, 2011, EGT filed a federal district court suit against the port over the staffing disagreement.

EGT argues in the court filing that the port lease "did not impose any obligation whatsoever upon EGT to utilize union labor at the Terminal, much less obligate EGT to utilize persons who are represented by Local 21 of the ILWU."

While the case sat in federal court, EGT moved forward with opening the facility and during the summer hired members of another union to staff the grain facility positions.

The ILWU began protesting the move in July, and since, more than 200 ILWU members have been arrested.

In addition to the claims in the lawsuit, EGT has recently begun promoting the idea that the lease with the port only required the firm to meet with the ILWU, not hire ILWU members.

At the core of the dispute is section 6.3 of the lease, known as the "Labor Warranty."

The single sentence of the lease's Labor Warranty states that the port guarantees EGT that "there are no agreements or restrictions affecting the port... requiring union labor or prevailing wage compliance... except as expressly set forth in Exhibit G-2."

Exhibit G-2, also a single sentence located later in the lease, expressly refers EGT to "the provisions of the Working Agreement between the ILWU Local 21 and the Port."

In its response to the EGT lawsuit, the port states that the lease Labor Warranty "obligate[s] EGT to observe applicable provisions of the collective bargaining agreement, including union jurisdiction provisions governing traditional longshore work to be performed for EGT."

The port also points out in its response that the Working Agreement with the ILWU covers "handling of cargo on the dock or in warehouses, cars, scows or trucks," and "the operation and maintenance of all machines used in the working of cargo."

A decision in the case is not expected to come until after October.