News / Fighting ICTSI Portland case forces dockers' union ILWU into bankruptcy

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Representatives claim the US International Longshoremen and Warehouse Union (ILWU) “will continue to operate as usual”, despite it declaring bankruptcy and entering Chapter 11 over the weekend. 

Chapter 11 bankruptcy is a procedure that allows businesses to recognise their debts while continuing operations, and is often referred to as ‘reorganisation bankruptcy’.

ILWU leaders said the union, which represents dockers at west coast US ports, had been forced into the move due to the cost of its continuing litigation with Filipino terminal operator ICTSI over a high-profile labour dispute, dating back to 2012, which led to the closure of ICTSI’s Terminal 6 at the port of Portland. 

The dispute revolved around two employees at the terminal who plugged-in reefer containers in the yard. They were members of the International Brotherhood of Electrical Workers, whereas the ILWU argued the job should be undertaken by its members. 

It launched slowdowns at the terminal and a landside blockade of the port which all but closed it to container traffic for the best part of a year, and resulted in liner customers leaving for other ports.

ICTSI successfully sued the ILWU for damages and a federal judge ruled the union owed ICTSI “the lost profits, lower operating costs, or both that would be reasonably anticipated ‘but for’ ILWU’s unlawful labour practices”, and awarded $93.6m in damages. 

An ILWU appeal saw the damages reduced to $19m, which was rejected by ICTSI, which continued litigating with claims that the union had intentionally driven custom away from Portland. A retrial has been set for February. 

The ILWU said it intended to “utilise the bankruptcy process to resolve the pending litigation with ICTSI”, and was “confident that this process will provide the most favourable course of action to safeguard the union’s future”. 

ILWU president Willie Adams said: “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.  

“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.” 

In response to the Chapter 11 filing, ICTSI Oregon told the Wall St Journal the “bankruptcy is the ILWU’s attempt to once again shirk its responsibility”.