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Court Denies Ruling in Labor Row by Mateusz Perkowski Capital Press, October 13, 2011

Dispute between labor, grain terminal moved to arbitration

A federal judge has issued a ruling in a contract lawsuit between a grain terminal facility and a port in Washington, though the decision doesn't end a bitter labor controversy stemming from the dispute.

At issue is whether the EGT LLC grain terminal must hire workers from the International Longshore and Warehouse Union as part of its lease agreement with the Port of Longview.

U.S. District Court Judge Ronald Leighton Friday refused EGT's request for a summary judgment. The decision does not force the facility to hire the ILWU workers. Instead, it suggests that the dispute between the union and the terminal be decided by a labor arbitrator while the court resolves the claim between EGT and the port.

EGT argued its lease agreement with the Port of Longview doesn't require the company to employ ILWU workers.

EGT -- which is owned by three trading, shipping and grain elevator companies -- decided to hire an operating company whose workers are from another union, which sparked turbulent reprisals from members of the ILWU this summer.

Before the $200 million EGT grain terminal was built, the port had entered into a "working agreement" that obligated the port to hire ILWU workers for leased facilities.

That agreement was a major sticking point during negotiations between the port and EGT. The port claimed it would apply to the lease, while EGT alleged the agreement was illegal under federal labor law.

The two parties nonetheless signed a lease deal in 2009 which referred to the working agreement, though EGT and the port now disagree as to how that reference should be interpreted.

Under state law, a court must not only interpret a contract's actual language but also the context in which it was formed, according to Leighton's ruling.

In this case, Leighton said that he could not conclude the contract's language and context freed EGT from any obligation to abide by the working agreement between the port and ILWU, which would have been necessary to grant summary judgment.

There's no evidence the port "threw in the towel" and agreed to breach the working agreement, but EGT also did not abandon its contention the deal with ILWU was illegal and didn't apply to the lease, the judge said.

The parties had reached an impasse on the agreement and decided to resolve it later if the issue became a problem -- which happened when EGT failed to strike a deal with ILWU, the ruling said.

Leighton said his "tentative conclusion" is that the legality of the working agreement should be referred to a labor arbitrator.

The court would also need to decide if the deal between ILWU and the port applies to EGT's lease, he said.

Leighton has asked the parties to "weigh in on this proposal" with further legal briefs, to be submitted by Oct. 17.