Perez brokers end to West Coast ports impasse

President Barack Obama’s ports gamble paid off.

A bitter nine-month dispute between shipowners and dockworkers at 29 West Coast ports ended Friday night after Labor Secretary Tom Perez helped broker a tentative new contract.


If the deal is approved by rank and file members of the International Longshore and Warehouse Union, activity will return to normal at the ports, which are responsible for about $1 trillion in cargo annually.

The agreement marks a significant victory for Perez, who flew to San Francisco Tuesday to broker an agreement.

Had Perez failed, the parties would have been called to Washington, and Obama might have felt compelled to use his authority under the 1947 Taft-Hartley Act to end the dispute. Such a move would have almost certainly favored management and angered organized labor at a time when it is already bristling at the president’s trade agenda.

“One thing I’m learning as I travel the country is, there’s a lot of people out there who don’t like Washington,” Perez said in a press call Friday night. “And so we set out Tuesday [and said] we can either resolve it this week here in California or we can travel to Washington, D.C., and go to the White House until we’re done.”

A White House press statement termed the deal “great news for the parties involved in the negotiation and a huge relief for our economy,” adding that the president was “grateful to Secretary Perez for his hard work bringing about a successful resolution to this dispute, and for the help of federal mediator Scot Beckenbaugh.”

Obama, the statement said, “calls on the parties to work together to clear out the backlogs and congestion in the West Coast Ports as they finalize their agreement.”

“President Obama took a big political risk by directing Perez to get involved,” observed former Deputy Secretary of Labor Seth Harris, “and the gamble paid off.”

To clinch the deal, Perez had to negotiate a major overhaul of union-employer arbitration procedures.

Shipowners and dockworkers had been deadlocked for weeks on how future contract disputes would be arbitrated. The workers, represented by the ILWU, had reportedly asked for the removal of a previously designated arbitrator that they viewed as too pro-business. Under the tentative contract, the parties agreed to to create a new process for the selection of arbitrators, Perez said.

“I don’t think anyone knows who the next arbitrator will be,” Perez said. “What I do know, and have great confidence in, is the new arbitration system is going to ensure that everybody gets a fair shake.”

Additional details of the agreement are not yet available.

The dispute affected a variety of U.S. industries. California citrus exports suffered and automakers like Honda were forced to slow down production.

The situation worsened over President’s Day weekend when the PMA shut down the ports to new traffic.

Perez told reporters Friday that he had been in touch with the president throughout the week on the dispute. He said the ILWU’s steering committee approved the agreement unanimously, and he expressed confidence that the rank-and-file would ratify it.