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South Carolina Ports defends hybrid labor model

An unfair labor practice charge has been filed before any containers have been moved at the South Carolina Ports Authority’s new Hugh K. Leatherman Terminal.

At issue is a contract clause that basically says all work at a proposed terminal should be done by International Longshoremen’s Association workers. The SCPA argues the soon-to-open Leatherman Terminal at the Port of Charleston was laid out years before the clause was added to the contract.

Wednesday’s filing with the National Labor Relations Board by the SCPA and South Carolina Attorney General Alan Wilson on behalf of the state alleges violation of the National Labor Relations Act by the ILA, its Local 1422 and the United States Maritime Alliance Ltd. (USMX).

According to a statement from Wilson’s office, “The charge alleges that the ILA and USMX violated the National Labor Relations Act (NLRA) by attempting to implement a secondary boycott to acquire new work for the union by pressuring ocean carrier customers not to use the state’s new Hugh Leatherman Terminal (HLT), which is scheduled to open in March 2021. A secondary boycott is when two parties, in this case the ILA and USMX, agree to hurt a third party, in this case the SC Ports Authority. Secondary boycotts are illegal under the NLRA.”

The ILA added two clauses to its master contract with the USMX in 2013. One provision states that USMX can “notify any port authority contemplating or intending to develop a new container handling facility that USMX members may be prohibited from using the new facility if the work at that facility is not performed by master contract bargaining unit employees.”

SCPA President and CEO Jim Newsome told American Shipper on Thursday that construction of a container terminal at a former Navy base was in the works a decade before the provision was added to the contract.

“We conceived the new terminal, the Leatherman Terminal, back in 2003. We made a permit application. In 2007 we got the permit and we started construction on the terminal in 2013,” Newsome said.

The SCPA uses a hybrid labor model in which some jobs are performed by state workers and others are handled by union members employed by private-sector companies. For some 50 years, state employees have operated the cranes and lift machines while ILA Local 1422 workers have loaded and unloaded cargo from ships, Local 1771 members have served as clerks and checkers, and 1422-A mechanics have repaired containers and chassis.

The ILA workers and state employees work alongside one another, Newsome said. The union members “work with our crane operators, our lift machine operators — everybody’s got their own set of responsibilities but they work together. It’s two different entities working together to provide a product. That’s not unusual in supply chain.

“I would absolutely say that the relationship is very harmonious. That doesn’t mean that everybody always sees everything eye to eye. But I would say, and I think the work product proves that, the relationship is harmonious,” Newsome said.

Since 2009 alone, according to the SCPA, “this hybrid working model has contributed to the doubling of container volume in Charleston and the growth in annual ILA manhours by approximately 850,000 — the equivalent of over 400 full-time jobs based on a 40-hour workweek. An ILA member can exceed $100,000 a year in wages with fully paid health and pension benefits, which exceed those of most industries. This compensation level is achieved through collective bargaining between shipping lines and stevedore management, represented by the USMX and the ILA. The SCPA is not party to this collective bargaining agreement.”

However, another clause added to the master contract in 2013 says the USMX and the ILA would conduct a study to determine how the hybrid labor model “could be altered to permit work currently performed by state employees to be performed by ILA-represented employees in a more productive, efficient and competitive fashion.”

Newsome pointed out, “No such study has been done.”

The SCPA said the attempt by the ILA and the USMX to enforce Article VII of the contract against the operation of the HLT, which is slated to open at the end of March, is unlawful.

“Article VII was carried over to the 2018 master contract. Given the ILA’s interpretation, this clause is at best vague and at worst facially invalid, as it attempts to take jobs away from state employees of the SCPA in contravention of the existing balance of the hybrid working model and without the agreement of the SCPA,” the port authority said in a statement Wednesday. “However, SCPA plans to continue operating the HLT and its container ports under the hybrid working model in effect today and is, in fact, precluded by the public policy of the state of South Carolina from doing otherwise.”

Newsome noted that no employees — state or union members — are being hired for the new terminal. “The day the terminal opens, we’re moving 300,000 containers from the Wando Terminal to the Leatherman Terminal. So we’re not adding any headcount to do that. We’re moving some of our workforce over there to run the equipment,” he said.

Newsome said Wednesday’s filing was made to “get clarification from the NLRB as to whether Article VII of that contract applies to that Leatherman Terminal. We don’t think it does. Apparently, the ILA and the USMX think it does, so we’ve got to sort that out before the terminal opens.

“Our position is we’re not bound by that article. We’re not party to that contract and we’re going to run that terminal with the same hybrid model we run our existing terminal. For a port like ours to have two different operating models would be a disaster,” Newsome said.

“We need to open the terminal. We spent a billion dollars on phase one. We need the capacity, but we have this uncertainty in that no one will proactively agree that we can put ships over there. So we need to resolve this now,” he said.

Newsome said he expected to begin communicating with an NLRB investigator assigned to the case as early as Thursday. He is hoping for quick resolution.

“We hope it will be prompt. We think the facts of the case are pretty clear. We also feel that we’ve provided a lot of information, so hopefully, quickly. We certainly plan to have this resolved by the time the terminal will open at the end of March,” he said.

Newsome said he does not expect the terminal labor issue to negatively affect the SCPA’s relationship with the ILA.

“We’re simply asking for a determination on an article of a contract that we’re really not even a party to but it affects our ability to do business,” he said.
Source: Freight Waves

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