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International Longshore and Warehouse Union, Local 40 v. Columbia Grain

United States District Court, D. Oregon, Portland Division

July 2, 2015



JOHN V. ACOSTA, Magistrate Judge.


Plaintiff International Longshore and Warehouse Union, Local 40 ("Local 40"), filed this action against defendant Columbia Grain ("Columbia") under the Labor Management Relations Act, 29 U.S.C. ยง 185(a) (the "Act"). Local 40 seeks to compel Columbia, as an alter ego of now defunct Willamette Stevedoring ("Willamette"), to arbitrate lost-work grievances arising out of a collective bargaining agreement. Columbia contends neither Local 40 nor Columbia are parties to the agreement, Local 40 has no authority to compel arbitration of the lost-work grievances under the agreement, Local 40 failed to exhaust the grievance procedure, and Columbia is not liable for Willamette's obligations under a joint employer/alter ego theory.

A two-day court trial of Local 40's case against Columbia commenced on April 6, 2015. On May 6, 2015, the court heard closing arguments and the parties' final submissions were filed June 3, 2015. Thereafter, the court took this case under advisement.

After careful consideration of the facts and evidence presented by the parties at trial through live witnesses and exhibits, and having had the opportunity to assess the demeanor of the witnesses, and review and weigh the evidence, the court makes the following findings of fact, which the court finds and holds were established by a preponderance of the evidence, and conclusions of law, pursuant to Rule 52(a)(1) of the Federal Rules of Civil Procedure.[1]

Findings of Fact

I. Columbia

1. From about 1978 until September 30, 2014, Columbia was in the business of merchandising, unloading, warehousing, and discharging grain into ocean-going vessels destined to various export markets at a facility located in the Rivergate Industrial area of the Port of Portland known as Terminal 5. (Trial Tr. 41:8-10; 68:10-15; 73:6-13; 89:7-5; 287:6-7.)

2. Columbia worked under the terms of a collective bargaining agreement known as the Grain Handlers Agreement entered into by the International Longshore and Warehouse Union (the "ILWU"), specified locals representing longshoremen from different geographical locations, and a group of grain elevator operators doing business in the Pacific Northwest (the "Grain Handlers Agreement"). (Trial Tr. 98:12-99:2; Ex. 105 at 1.)

3. Columbia performed the unloading, warehousing, and control room work, or the elevator-side work, at Terminal 5 with its own labor force, which consisted primarily of longshoremen from Local 8 working under the Grain Handlers Agreement. (Trial Tr. 91:93:25; 95:5-13; 96:2-6; 97:4-8.)

4. Columbia contracted with various stevedoring companies to perform the ship loading or ship-side work. (Trial Tr. 99:25-100:7;106:2-7.)

5. Ship-side work at Terminal 5 consisted of three classifications of ILWU members:

(a) Longshoremen, dispatched by Local 8, who worked on the ship, opening and closing cargo hatches and aiming the gravitational flow of the grain from the loading spouts into the hulls of the ship, etc.;

(b) One foremen, or "walking boss", dispatched by Local 92, who oversaw the handling of cargo onboard a ship and supervised all of the longshoremen; and

(c) One supercargo/clerk, dispatched by Local 40, who was responsible for the safe and efficient loading of vessels and documentation, generally characterized as a "middleman". (Trial Tr. 41:1-2; 58:18-24; 102:3-104:9; 181:3-10; 204:6-18.)

II. Willamette

6. In 2005, Columbia, dissatisfied with the customer service it was receiving from the stevedoring companies it contracted with, created Willamette to provide more responsive stevedoring services, or ship-side work, to Columbia. (Trial Tr. 77:8-23; 105:13-15; 153:3-154:9; 171:11-25.)

7. Willamette hired Mike Morgan as General Manager ("Morgan") and Chris Donahue as Shipping Superintendent ("Donahue"). (Trial Tr. 152:15-18; 178:1-6.)

8. Morgan and Donahue were Willamette's only full-time employees. (Trial Tr. 178:1-4.)

9. Willamette became a member of the Pacific Maritime Association ("PMA") and was governed by various PMA and ILWU labor agreements, such as the Pacific Coast Longshore and Clerks' Agreement. (Trial Tr. 100:8-17; 178:24-180:1; Ex. 127.)

10. The PMA is a multi-employer association that negotiates and administers Pacific coast marine labor agreements on behalf of its members. (Trial Tr. 178:25-179:15.)

11. The ILWU is a diverse organization which represents and negotiates on behalf of all its workers, or members. (Trial Tr. 208:23-209:6.)

12. The Pacific Coast Longshore and Clerks' Agreement is not itself a stand-alone agreement but, rather, is bifurcated into two agreements, one being the Pacific Coast Longshore Contract Document (the "Black Book") and the other being the Pacific Coast Clerks' Contract Document (the "White Book"). (Trial Tr. 209:19-210:1; 243:12-19.)

13. The White Book governs Local 40's supercargo/clerks. (Trial Tr. 243:12-19.)

14. While providing stevedoring services to Columbia, Willamette used supercargo/clerks from Local 40 as required under the White Book. (Trial Tr. 40:15-17; 41:11-22; 58:14-16; 59:14-60:16.)

15. Columbia has never been a member of the PMA and never been a party to the Pacific Coast Longshore and Clerks' Agreement or, more specifically, the White Book. (Trial Tr. 100: 22-23; 120:13-15.)

III. Columbia's Competitive Disadvantage

16. In February 2012, EGT, a grain elevator operator in competition with Columbia, negotiated a labor agreement with the ILWU incorporating a ship-side addendum allowing EGT to perform the ship-side work itself, thereby eliminating the need to contract with PMA-member stevedoring companies. (Trial Tr. 109:3-6; 109:14-18.)

17. The EGT labor agreement did not require the employment of supercargo/clerks, provided other reduced manning requirements for both the elevator-side and ship-side work, and allowed EGT to hire steady employees inside the elevator. (Trial Tr. 109:14-23.)

18. The EGT labor agreement was nearly identical to a labor agreement that another Columbia competitor, Kalama Export, had negotiated previously with the ILWU. (Trial Tr. 109:14-15; 100:1-12.)

19. Columbia, and other grain handlers, believed the favorable terms in the EGT and Kalama Export labor agreements put them at a competitive disadvantage and made it likely they would lose customers to EGT and Kalama Exports unless they were able to "level the playing field." (Trial Tr. 109:7-12; 112:12-15.)

20. Shortly after the execution of the EGT labor agreement, Dane Jones, Local 40's Secretary Treasurer/Business Agent ("Jones"), sent a letter to Robert McEllrath, ILWU International President ("McEllrath"), expressing concern that despite consistent requests by Local 40 to be included, supercargo/clerks were excluded from the EGT labor agreement, and seeking information on how supercargo/clerks would be represented by the ILWU in the future. (Trial Tr. 225:1-227:22.)

IV. Grain Handlers Agreement Negotiations

21. The Grain Handlers Agreement in effect when the EGT labor agreement was negotiated covered a one-year term from October 1, 2011 through September 30, 2012 (the "2012 Grain Handlers Agreement"). (Ex 105.)

22. The parties to the 2012 Grain Handlers Agreement were the ILWU, Local 4 (Vancouver), Local 8 (Portland), Local 19 (Seattle) and Local 23 (Tacoma), and the Individual Pacific Northwest Grain Elevator Operators, comprised of individual grain elevator operators, including Columbia (the "Elevator Operators"). (Ex 105.)

23. The 2012 Grain Handlers Agreement was limited to a one-year term to allow the Elevator Operators, who were aware EGT was scheduled to become operational in 2012, the opportunity to see the terms of the EGT labor agreement before committing beyond 2012. (Trial Tr. 108: 21-109:2.)

24. In response to the perceived competitive disadvantage created by the EGT and Kalama Export labor agreements, the Elevator Operators developed a bargaining objective of achieving a level playing field with their competitors by trying to get essentially the same terms and conditions EGT and Kalama Export had been given. (Trial Tr. 112:22-113:13.)

25. Specifically, the Elevator Operators desired a ship-side addendum allowing them to perform ship-side work themselves, thereby eliminating the need to contract with a stevedoring company (the "Ship-Side Addendum"). (Trial Tr. 143:22-23; 229:2-11.)

26. Additionally, the Ship-Side Addendum did not require the use of supercargo/clerks. (Trial Tr. 229:6-11.)

27. When negotiations for a successor Grain Handlers Agreement began in August, 2012, the Elevator Operators proposed the inclusion of the Ship-Side Addendum. (Trial Tr. 115: 3-6.)

28. Randy Cartmill, General Manager of Columbia ("Cartmill"), served as Columbia's representative on the Elevator Operators' negotiating team, and in that capacity attended the numerous bargaining sessions and mediations, which occurred ...

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