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Port Dispute May Force Obama to Invoke Taft-Hartley Act

When managers of cargo terminals at 29 West Coast ports closed their facilities to ships last weekend, they opened the door to a new discussion about when the president can invoke powers under labor law to keep the country’s transportation networks running.

Robyn Boerstling, director of transportation and infrastructure policy for the National Association of Manufacturers, said if the ports shut down completely, the group would “encourage” the president to use his authority to reopen them. But, “There needs to be a strike or a lockout before Taft-Hartley is an option,” she said.

“We hope that in the days ahead we can avoid that situation,” Boerstling added.

The monthslong labor impasse at ports from Southern California to Washington state, which all operate under the same organized labor contract, is turning into a kind of cat-and-mouse game over federal intervention.

The International Longshore and Warehouse Union, which represents more than 20,000 dock workers, is digging in on issues of automation and other cost-cutting efforts. The Pacific Maritime Association — the management group of operators of cargo handling terminals and shipping lines — argues the union is purposely slowing down operations to pressure the operators and, more importantly, the retailers and manufacturers who depend on the flow of goods.

The PMA’s decision to stop vessel handling was aimed at getting the ILWU’s, and Washington’s, attention.

“After three months of union slowdowns, it makes no sense to pay extra for less work,” said PMA spokesman Wade Gates, “especially if there is no end in sight to the union’s actions which needlessly brought West Coast ports to the brink of gridlock.”

Rep. Janice Hahn, the California Democrat whose district includes the sprawling Los Angeles-Long Beach port complex, called the lockout “deeply unsettling.” But she and others don’t expect presidential intervention unless there is a complete shutdown of the ports.

“While Taft-Hartley can be used if there is a threat of an action, it is unlikely the action will be taken unless there is a full shutdown, similar to what happened in 2002,” said Jonathan Gold, the National Retail Federation’s vice president for supply chain and customs policy.

Parked at Sea

The last time Taft-Hartley was invoked was 13 years ago, when many of the same issues at the ports came to a head. President George W. Bush forced open the same ports after an employer-led lockout left ships waiting at sea for more than 10 days.

Back then, employers locked out dockworkers after accusing them of staging a slowdown in operations. That was similar to the reasoning behind this weekend’s shuttering of a portion of operations by employers at 29 West Coast ports.

Under the Taft-Hartley Act, the president can get involved once a strike or lockout affects an entire industry, or a substantial part of it. At that point, the president must appoint a board of inquiry to report on the factual elements of the dispute. After that, the president can petition a federal court to prevent any strike or lockout the president has deemed a threat to national health or safety.

In 2002, more than 220 ships were parked in the Pacific Ocean waiting to unload by the time Bush got involved, according to an account by the Federal Mediation and Conciliation Service.

The key to invoking Taft-Hartley, however, is the impact a labor lockdown has beyond the docks, and that’s why these ports are such a target for the rarely used law.

Lee Peterson, a spokesman for the Port of Long Beach, said Los Angeles and Long Beach together have nearly 40 percent of the country’s containerized trade — largely the huge volume of goods that fill store shelves and supply machine parts to industry and food to groceries. The PMA estimates 12.5 percent of U.S. gross domestic product is tied to cargo moving through West Coast ports.

The president appointed a federal mediator to join the talks last month, but there’s no suggestion that has helped.

White House deputy principal press secretary Eric Schultz said questions about Taft- Hartley are “premature” because “we believe both sides ought to resolve this at the negotiating table.” But, he told reporters last week “that officials at the White House and across the relevant agencies are closely monitoring the situation.”

The ILWU wants nothing to do with federal intervention. But industry groups that want to see the port operations running smoothly are raising the specter of disruptions that would spread out across the country.

The retail federation said that could result in military bases running short of food and hospitals running low on medical equipment. There’s no indication of any real problems, but industry groups say they are seeing an impact from a port slowdown.

Reviewing the Policy

But Gold said shippers have moved from the West to East Coast to avoid congestion, and export opportunities have already been lost.

“This is of national economic interest that the deal is done,” Gold said. “It’s to the point that it’s really causing irreparable damage to the economy.”

Short of executive action, some trade groups still want to see Washington take a look at the current policy governing labor negotiations at U.S. ports, especially given that a labor agreement covering the East Coast and Gulf ports expires in three years.

“Congress and the administration should explore all legal and legislative options to avoid these situations in the future,” Gold said. “Potential solutions could include breaking up the bargaining arrangements into port-by-port or regional bargaining agreements with staggered contracts.”

Douglas Holtz-Eakin, president of the conservative American Action Forum, adds that the policy framework in which the maritime association and the union operates needs to be changed.

Holtz-Eakin wrote an op-ed in The Wall Street Journal calling for dockworkers and employers to be governed not by the National Labor Relations Act, but by the Railway Labor Act, which has more restrictive provisions on strikes and employer lockouts. The RLA governs the nation’s railroad and airline industries.

“We have a standard that says the trains have to run and the airplanes have to run regardless, but we don’t have a standard that says the ports have to be open to get them to the trains and planes,” Holtz-Eakin said in an interview.

A 2012 report by the Congressional Research Service said the National Labor Relations Act “is arguably more adversarial in nature” than the Railway Labor Act, adding that “many disputes are resolved through adjudication, rather than through mediation and arbitration.”

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