SAN FRANCISCO, CA (12/4/02) -- In 1981, when President Ronald Reagan replaced thousands of air traffic controllers and threw their leaders in jail, the permanent replacement of strikers became a normal aspect of US labor relations. Strikes became far riskier for workers than they'd been at any time since the turn of the century.

Labor relations are now undergoing a similar, equally profound change. West coast dockers have compared the new terrain they faced in bargaining their recent contract to negotiations in a barbed wire straitjacket. Although their union and the world's largest shipping companies reached agreement on a new pact in late November, the circumstances overshadowing the talks were a clear warning to the rest of labor throughout the country.

A new attitude towards unions under the Bush administration is changing that terrain. Threats and legal intervention by the Federal government essentially made job action by longshoremen, intended to pressure their employers to arrive at an equitable settlement, as risky as the air traffic controllers strike a generation ago.

"Given what we went through over the last six months, including the lockout of workers in every port, and then the invocation of the Taft-Hartley Act, we're glad we were able to reach an agreement at all," explained Steve Stallone, communications director for the International Longshore and Warehouse Union. "So the fact that we were able to make progress on all three issues important to us was a big achievement."

Longshore workers went into negotiations last June with three goals in mind, according to Stallone. They wanted to preserve their healthcare benefits in the face of demands by the Pacific Maritime Association that they pay part of skyrocketing costs. They wanted increases in their pensions. And they wanted to ensure that employer proposals to implement new technology wouldn't result in the loss of jobs.

The new agreement preserves longshore workers' health benefits with no copayment by workers, at an estimated present cost to employers of $220 million annually. By the end of the six-year agreement, that cost is estimated to rise to $500 million. The pension settlement will increase benefits by 60% over the same period. "This is the biggest pension increase in the history of our union," Stallone pointed out.

But both provisions came at a cost. The PMA will implement a new system for tracking container movement using scanners and other computer-aided devices, replacing the system under which longshore clerks manually entered information into the shippers' database. That will eventually eliminate about 400 jobs, out of a total clerk workforce on the west coast of 1200. No clerk will actually lose his or her job, since the contract guarantees 40 hours of work a week for the career of every current member. But in the future, the number of jobs covered will be reduced. In return, the union was able to win jurisdiction over jobs planning the movement of containers on trains and in yards on the waterfront. Those jobs were previously outsourced.

The objective of the employers was to keep workers using the new technology out of the union entirely. Workers in these categories also included vessel planners, who tell the cranes where to put containers on the ships, and clerical workers in company offices. A few hundred of them have already joined the ILWU in many ports, attracted by its high wage rates. To make up for the potential job loss among the clerks, the union sought to include them in all ports by extending its jurisdiction. Now it will have to organize them.

"There are problems with the settlement, as you might expect from any contract negotiated under the gun of Taft-Hartley," Stallone noted. "The wage differential between the highest- and lowest-paid increased, which we've always fought against." In addition, there is now a new differential between the wages of drivers in the huge container cranes, and those operating cranes used to load and unload bulk cargo."That opens the door to what happened to the International Longshoremens' Association [which represents dockers on the east and gulf coasts], who now have separate contracts for each category."

The six-year agreement is also unusual. Unions normally seek to limit contracts to two or three years, since inflation can spiral out of control, taking large chunks out of paychecks. Other changes involving automation and technology can be difficult to resolve under agreements that don't foresee them. The ILWU agreed to the long term in order to space the large pension increase out over a number of years. The expiration of the agreement in 2008 also means that the union might avoid renegotiating it under Bush, even if he's reelected in 2004.

The bargaining strategy of the Pacific Maritime Association rested on removing the union's ability to exert pressure during negotiations to protect wages and conditions on the docks. With the Bush administration in office, now was the time, employers believed, to take their best shot.

For the PMA, the Taft-Hartley injunction was a step in a well-ordered scenario that unfolded with inexorable precision. Before negotiations began in June, the shippers and some of their biggest customers, including The Gap, Target, Mattel, and Home Depot, organized the West Coast Waterfront Coalition. Together, they held secret meetings with a Bush administration task force headed by White House advisor Carlos Bonilla. Once negotiations began, Homeland Secretary Tom Ridge, and representatives of the Department of Labor, phoned ILWU President Jim Spinosa, warning him that the administration would view any strike or interruption of work on the docks as a threat to national security. They threatened to invoke the Taft-Hartley Act, to use the military to replace striking workers, to place the waterfront under the Railway Labor Act (making a strike virtually illegal), and removing the union's ability to negotiate a single labor agreement covering all ports on the coast.

The ILWU nimbly avoided being provoked into a strike, but finally, at the peak shipping season, employers locked out their own workers. As a pretext, the PMA accused the union of organizing an alleged work slowdown. According to the Journal of Commerce, however, 30% more cargo was crossing the docks than last year - the greatest volume in history. In fact, the speedup on the docks was so intense that the accident rate shot up, costing the lives of five longshoremen in 2002. When the union told its members to work at a safe speed, the PMA called it a slowdown.

Once the dockers were locked out, employers then demanded Bush invoke Taft-Hartley. The administration's legal brief before Judge Alsup voiced a startling new philosophy, elaborated by Defense Secretary Donald Rumsfield. He held that all commercial cargo could be considered important to the military, not just specifically goods intended for military use abroad. Any stoppage on the docks, therefore, was a threat to national security.

The use of national security as a pretext for injunctions -- and even militarizing the workplace and replacing strikers -- could affect any union. Instead of defining a threat to national security in terms of vital life-dependent services, this use of national security defines it as economic. Any strike halting the continued operation of an industry or a large profitable enterprise could be defined as such a threat, and made illegal.

PMA based its strategy on this philosophy. Long before negotiations even started, it sponsored a steady media drumbeat announcing that a waterfront strike would send the economy into a tailspin. One study made in April predicted losses of $1-2 billion a day. The study was made by a Lancaster, Pennsylvania management consultant firm, Martin Associates, and paid for by the PMA. During the lockout, those figures were often quoted in the press as a measurement of actual losses, not predicted ones.

After US District Court Judge William Alsup invoked Taft-Hartley, using those numbers as a justification, Patrick Anderson of the Anderson Economic Group made another study. He was only able to document actual losses of $1.67 billion, or $140 million a day. The higher figure, he said, was "closer to the economic impact of sinking the ships than delaying them." By then, however, the original figures had already justified Federal action.

At the beginning of October, the men and women of the docks went back to work, after having been locked out for 12 days. They returned, not voluntarily, as they had offered to do from the beginning, but under the Federal injunction won by the shipping corporations. Bargaining continued for another month, therefore, under the Taft-Hartley Act's 80-day "cooling off" period.

On the surface, it seems incomprehensible why the association would need a Federal order to open the gates of the closed terminals. After all, they'd shut them themselves, and could have opened them at any time. But the resumption of work was never really the issue. Instead, the PMA wanted two things. It wanted a guarantee that dockers would be forced to continue unloading ships through the peak shipping season, when goods traveling from the sweatshops of the eastern Pacific rim are en route to stores for the Christmas rush. And it wanted to make the union so vulnerable that it would be unable to put any pressure on employers during negotiations.

After work resumed, the PMA continued to accuse the union of slowing the pace as a means of threatening to invoke further Federal intervention. "The ILWU is playing games with the U.S. economy, and inflicting economic pain and hardship on scores of companies and their employees," said Joe Miniace, PMA director. "Given the extreme urgency of keeping the goods moving through our ports, I cannot fathom why the union would deliberately take these slowdown actions."

Longshore wages were never the primary issue. The hourly rate on the docks, prior to the new contract, ranged from 27.68 to 33.48 -- about the same as a plumber or electrician. These are good wages in terms of the US industrial average, but the shipping companies never claimed poverty, and in fact are making large profits.

At the root of the dispute was the PMA's decision to try to end an arrangement that successfully allowed the introduction of advanced technology onto the docks for the last 40 years. In 1960, the union agreed that employers could introduce the first container cranes, the giant machines that now move cargo containers on and off the huge ships built specially to carry them. Even though this change cost the jobs of tens of thousands of west coast dockers, the union agreed that so long as its members did the new jobs technology produced, it would not try to stop it.

Over the coming two decades, the companies want to automate shipping far beyond the use of automated scanners and tracking devices. In their vision of the future, cranes and dockside machines will eventually be operated by remote control, perhaps by people miles away from the wharves. That day, however, is further in the future than the expiration of the present contract. The definitive battle to determine whether the philosophical framework of the 1960 agreement still holds -- technology for jobs -- was not fought to a conclusion this time around.

What did surface, however, was the new interventionist attitude of the Bush administration, justified in the name of national security. And while a contract is in place, the new Republican-dominated Congress could still implement the threats made by Bush when negotiations started. One possible move might place the union under the Railway Labor Act, eliminating its right to strike. Even under Clinton, with Democrats in control of the Senate, Congress placed Federal Express under the RLA, effectively ending efforts by its workers to organize. A Republican Congress might also break up the ILWU's coastwide contract into separate agreements in every port, making strikes pointless, since employers would be able to ship goods to working ports while workers struck in others.

Agreeing to a six-year contract was designed to forestall that possibility. "We think it will help avoid legislation coming after us," said Stallone. "By showing labor stability on waterfront, we're hoping that problem won't resurface after Congress convenes in January."

But the Bush administration, which also used back-to-work orders against employees at Northwest and United Airlines last year, has now established a new precedent. Interruptions of economic activity, this new doctrine says, are a threat to national security. As a result, other workers in months to come may see the Federal government intervene forcefully on their employer's side.