Employers at the port of Baltimore have asked a federal judge to force a local longshoremen's union to pay them more than $3.8 million in damages from a three-day strike last year.
The lawsuit is the latest escalation in a long-standing labor contract dispute that has dragged down the port's international reputation, forced cargo diversions and brought high-level union and employer representatives to Baltimore to negotiate in recent months.
An arbitrator had ruled that the union owed the money, but it has yet to pay. Two employer organizations filed the lawsuit in U.S. District Court last week.
What the lawsuit will mean for the ongoing contract negotiations is unclear. It could speed a resolution to the standoff over damages, labor observers said, or further distract officials from the business of crafting a new contract before shipping lines divert more cargo for fear of future instability.
Union and industry officials said contract negotiations are supposed to resume next week but did not have firm dates and declined to comment on whether the lawsuit would affect negotiation schedules.
The damages in question — $3,858,165.72 — stem from an October strike by members of the International Longshoremen's Association Local 333, the largest ILA chapter in Baltimore, over the lack of a contract to their liking. Leaders of Local 333 have said they want more control over job assignments, among other issues that go beyond compensation.
The strike, which was honored by the three other ILA locals in Baltimore, brought public terminals at the port to a standstill.
Arbitrator David Vaughn, who entered the dispute at the behest of the port employers, ruled that the work stoppage violated a no-strike clause in a separate master contract covering container cargo up and down the East Coast. He held that Local 333 was liable for damages sustained by employers during the strike.
In a Jan. 24 opinion, Vaughn awarded employers represented by the United States Maritime Alliance (USMX) a total of $3.8 million and ordered USMX and Local 333 to meet to discuss disbursement of the award or "jointly agree to some other amount of damages."
Vaughn retained jurisdiction in the case for 180 days after the opinion — or until July 23 — and left open the possibility of extending his jurisdiction at the request of either party.
Last week, USMX and the Steamship Trade Association of Baltimore, another industry group, filed the complaint demanding the damages be paid. USMX claimed Local 333 had "not made any payments" related to Vaughn's award and asked the court to confirm Local 333's responsibility to pay.
William Spelman, an attorney for USMX, and Dave Adam, the organization's president, did not respond to requests for comment on the lawsuit.
Michael Collins, an attorney for the Steamship Trade Association of Baltimore in the case, said USMX and the Steamship Trade Association filed the lawsuit to settle the damages and return to the contract negotiations free of its influence.
"Local contract negotiations are about to begin again and I think both sides are reasonably hopeful of a local agreement," he said. "This is all part of the same process."
Ron Taylor, a Baltimore-based labor attorney who is not involved in the case, said the employers waited a substantial amount of time following the arbitrator's ruling in an attempt to reach a settlement. The lawsuit is likely a statement that the time for haggling over the damages award is over, he said.
"The [employers] are saying, 'We need to have stability. We can't let this drag on,'" Taylor said. "So this becomes a way to help focus the issue."
Philip Dine, author of "State of the Unions," a book that looks at how the labor movement can regain influence in the United States, said tense labor negotiations aren't unusual.
Still, the lawsuit — coupled with ongoing infighting within Local 333 and the stalemate over the contract — could add yet another distraction in an already complicated situation.
"You sort of have a perfect storm for a really laborious and complex process," he said.
Local 333 has until July 22 to respond. How it would pay the damages were the court to force its hand is unclear. In its financial filings to the Labor Department for 2012, the local chapter reported about $1.1 million in total receipts and nearly $2 million in net assets, according to the department's website.
Jennifer Stair, an attorney for Local 333, said she will be reviewing the lawsuit with her client but otherwise declined to comment. Riker McKenzie, president of Local 333, declined to comment through a personal attorney.
Local 333 could turn to its parent organization for help in paying the damages. Since the October strike, national officials with the ILA have been involved in the Baltimore dispute and have taken over local negotiations. Jim McNamara, an ILA spokesman, declined to comment on the lawsuit.
ILA Atlantic Coast District President Dennis Daggett, who has stepped in to help lead the Baltimore negotiations for Local 333, has argued in the past that union leaders could use the unsettled contract as leverage to reduce the damages award.
In April, after Daggett held a meeting to update members on negotiations surrounding the damages, he wrote a letter to members in which he called the damages "an attempt by employers and a misguided arbitrator to weaken your efforts for union representation."
Kevin Marrinan, an ILA attorney, did not respond to a request for comment on the lawsuit, but has said in the past that the damages award was a major obstacle in contract negotiations. Marrinan also said in April that the issue would likely go to federal court if the dispute over the award outlived Vaughn's jurisdiction over the case.
The total damages award relates to losses sustained by six different shipping lines, including Mediterranean Shipping Co., which lost more than $1.1 million, and Ports America Chesapeake, which also lost more than $1.1 million. The other lines had losses in the hundreds of thousands of dollars.
Ports America Chesapeake operates some port terminals under a public-private partnership with the Maryland Port Administration.
Richard Scher, a port administration spokesman, declined to comment on the lawsuit. Helen Bentley, a former Maryland congresswoman and an adviser to the port administration who has followed the contract dispute closely, said the lawsuit represented the "normal route of business" for USMX after efforts to settle the issue outside of court failed.
Collins said he did not have a firm date for negotiations — which have technically been under way since the strike — but believed they would resume in full next week.
"Both sides are confident that they're going to come out of those negotiations with an agreement. That's been said before, but that's the intent," he said. "This time it's real."
twitter.com/rectorsunCopyright © 2015, The Baltimore Sun