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Update on ILWU – PMA Contract Negotiations

On May 12, the PMA (the negotiating body for the west coast marine terminal operators) and the ILWU (the west coast longshore union) began 2014 contract negotiations in San Francisco.  Each side has laid out their starting demands most of which will either be settled quickly or completely dismissed depending on merit by both parties.  The ILWU indicated that they want a two year contract while the PMA prefers a six year contract but have indicated they could concede to a minimum contract term of no less than three years.

The ILWU wants to maintain their current healthcare benefits however the “Cadillac tax” under Obamacare triggers an annual payment of $190 million on these benefits which neither side wants to absorb.  In addition the union is seeking increases in: pension benefits; assessment payments based on tonnage; hourly pay of $5.50 in year one and year two of the contract; an additional no work holiday; two additional vacation days each year; increased penalties to employers on violations of jurisdiction, coupled with a pay guarantee of 50 hours per week for Class A and 40 hours per week for Class B ILWU members.

The PMA is negotiating to reduce health care costs so to avoid the annual $190 million “Cadillac tax”, impose financial penalties to the union for failure to follow existing jurisdiction rulings while limiting the expansion of the ILWU’s claims for jurisdiction on jobs related to technology,  chassis repair, and the like. They are also pushing for increased productivity by increasing the work day to 9 hours from the current of 8 hours.

From the initial posturing, this could be a contentious contract negotiation and the lead negotiators from both sides predict that there will be no contract signed by expiration of the current contract on June 30, but both also expect a settlement by the middle of July.  Relatively minor (one or two shift) labor disruptions could occur, but neither side anticipates anything similar to the effects of the 2002 lockout.