Deal reached in West Coast dockworkers dispute

SAN FRANCISCO — Negotiators reached a tentative contract covering West Coast dockworkers on Friday evening, likely ending a protracted labor dispute that snarled international trade at seaports handling about $1 trillion worth of cargo annually.

The breakthrough came after nine months of negotiations that turned contentious in the fall, when dockworkers and their employers began blaming each other for problems getting imports to consumers and exports overseas.

Labor Secretary Tom Perez, who heralded the tentative deal in a conference call with reporters, says that normal operations were slated to resume on the docks starting Saturday night. But he's not sure how long it will take to clear a cargo backlog that has left produce rotting because it couldn't be loaded on ships and retailers frustrated at not receiving needed shipments.

The agreement "brings to an end what has become a significant headwind" to the economy, with "too many innocent people and businesses suffering," he says. The result of the slowdown in the ports, including several days of closure to ship movements this month, has been "empty shelves and angry customers."

Perez, who joined the talks in San Francisco this week, says the tentative agreement was reached as he was about to follow through on a threat to both sides to either come to an agreement or face the grim prospect of having to go to Washington next week to hammer out remaining issues.

"That was the direction from the president: Get this done now, but if necessary, in Washington," Perez said.

The five-year deal between the International Longshore and Warehouse Union and the Pacific Maritime Association — representing shipping companies and port terminal operators — involves 29 ports from San Diego to Seattle. They handle about one-quarter of all U.S. international trade, much of it with Asia. Details were not being disclosed pending the ratification vote.

"We are pleased to have reached an agreement that is good for workers and for the industry," said PMA President James McKenna and ILWU President Bob McEllrath in a joint statement. "We are also pleased that our ports can now resume full operations."

Negotiators for the union and PMA began formal talks in May. Their previous six-year contract expired July 1.

In a statement released late Friday, White House spokesman Josh Earnest said President Obama has called on the parties to now work together on backlogs and congestion as the agreement moves forward.

"This is great news for the parties involved in the negotiation and a huge relief for our economy -- particularly the countless American workers, farmers and businesses that have been affected by the dispute and those facing even greater disruption and costs within further delays," Earnest said.

Those who depend on reliable shipments through the ports expressed relief at word of the tentative accord. But they aren't predicting normal operations anytime soon.

"We know that even upon ratification, clearing up the congestion will take months," says Peter Friedmann, executive director of the Agriculture Transportation Coalition.

He says agriculture "has taken a beating" as a result of the dispute, leading overseas customers to shop in other nations for meat, fruit, hay, cotton, rice, nuts, french fries and lumber.

Likewise, the National Retail Federation issued a statement hailing the breakthrough, but saying the bargaining system needs to be reformed.

"As we welcome today's news, we must dedicate ourselves to finding a new way to ensure that this nightmare scenario is not repeated again," the association said. "If we are to truly have modern international trade, supply chain and transportation systems, we must develop a better process for contract negotiations moving forward."

Perez says that when he joined negotiations, the remaining big sticking point involved the arbitration system to resolve disagreements. The agreement should create a more efficient system, he says.

Under current rules, neutral arbitrators preside over labor disputes between workers and PMA.

If negotiations had moved to Washington, it could have meant that the White House was potentially considering invoking Taft-Hartley. Officially the Labor Management Relations Act of 1947, it allows presidents to get involved in labor disputes. In his statement, Earnest noted that President Obama had been kept apprised of the situation in recent weeks before dispatching Perez.

However, for the president to invoke it, there would have to be either a strike or a lockout in effect.

The last time Taft-Hartley was used was in 2002, when President George W. Bush forced West Coast ports to open. In that instance, port employers locked port workers out for 10 days because of what they called a union slowdown.

National Retail Federation Vice President for Supply Chain and Customs Policy Jonathan Gold said earlier in the day on Friday that after nearly a week of Perez being dispatched to help settle the problem, nothing had happened.

"If a deal is not reached today, we support the decision to move the negotiations to Washington and we call upon the president to personally engage in the discussions until an agreement is reached," he said.

Weise reported from San Francisco and Woodyard from Los Angeles.