The Power of the Strike Threat and Dicey Dynamics of the “Tentative” Labor Agreement

The threat of a strike is one of the most powerful tools labor unions can weld when it comes to contract negotiations. And even when a “tentative” agreement is reached, that threat may again rear its head if union members decide to reject it.

The power of the strike threat

As we noted last week, UPS Teamsters workers were on the verge of a potentially economy-crippling strike after months of negotiations failed to meet workers’ demands.

Despite the financial hardship it would mean for workers, union members were ready and willing to step away from their jobs and join picket lines around the country to get the terms they were after. In fact, their efforts to “practice picket” and the visuals created seemed to have a significant effect as negotiations came down to the wire.

The authors of a Labor Notes post captured the power of a potential strike as an effective tool in the UPS negotiations.

“The profound seriousness of the strike threat, light-years from the dynamic in 2018 bargaining, is why the Teamsters have won so much already,” they wrote. “And if they reach a deal by the deadline, this will be the reason why—that UPS knew, Wall Street knew, the workers knew, everybody knew how very ready they were to walk.”

Indeed, they did reach a tentative deal by the deadline — and not just any deal, but what the UPS Teamsters referred to as a “historic” tentative contract for its members.

“Today, the Teamsters reached the most historic tentative agreement for workers in the history of UPS, protecting and rewarding more than 340,000 UPS Teamsters nationwide,” the Teamsters announcement said. “The overwhelmingly lucrative contract raises wages for all workers, creates more full-time jobs, and includes dozens of workplace protections and improvements. The UPS Teamsters National Negotiating Committee unanimously endorsed the five-year tentative agreement.”

“…The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it,” said Teamsters General President Sean M. O’Brien in the statement. “UPS has put $30 billion in new money on the table as a direct result of these negotiations. We’ve changed the game, battling it out day and night to make sure our members won an agreement that pays strong wages, rewards their labor, and doesn’t require a single concession. This contract sets a new standard in the labor movement and raises the bar for all workers.”

As we noted last week, some believe the dynamics involved may have an impact on other labor negotiations — and there are a growing number of them in play.

A growing list of contract negotiations

It seems the headlines are regularly reporting on labor negotiations that are in process in various industries.

For example, in recent weeks, Hollywood has been upended as both writers and actors hit the streets with their picket signs.

In mid-September, union contracts will expire for 144,000 auto workers at Ford, General Motors, and Stellantis (formerly Chrysler). According to Labor Notes, a strike in some form is possible there, too.

And then there are the ports.

On the U.S. West Coast, labor negotiations between the International Longshore & Warehouse Union (ILWU) and Pacific Maritime Association (PMA) have been up and down since the expiration of the contract in July of last year. Stakeholders have been so worried about the potential impact of a walkout that some started shifting their business to East Coast ports, rather than deal with yet another major supply chain disruption.

After more than a year of negotiations, the two parties issued a joint announcement on June 14 that they had reached a tentative agreement.

“The Pacific Maritime Association and the International Longshore and Warehouse Union today announced a tentative agreement on a new six-year contract covering workers at all 29 West Coast ports,” the statement said. “The deal was reached with assistance from Acting U.S. Secretary of Labor Julie Su. The parties will not be releasing details of the agreement at this time. The agreement is subject to ratification by both parties.”

That last line underscores the meaning of “tentative.”

As ILWU President Willie Adams noted in a statement issued on June 15, it will take some time for the agreement to be finalized.

When “tentative” agreements fall apart

To the north, Canada’s West Coast ports have been experiencing contract negotiation issues of their own — the dynamics of which underscore the fact that tentative agreements are not a done deal.

The description for a July 19 Supply Chain Dive article captured a bit of the recent contract-negotiating dance between the British Columbia Maritime Employers Association (BCMEA) and the International Longshore and Warehouse Union (ILWU) Canada: “Maritime employers had already ratified a deal when an ILWU Canada division rejected it, leading longshore workers to again walk off the job on Tuesday.”

“Longshore workers in Canada are once again on strike after a union division rejected a tentative deal with maritime employers that had ended a 13-day work stoppage earlier this month,” wrote Managing Editor Edwin Lopez.

Lopez cited a July 18 news release from Rob Ashton, President of ILWU Canada in which he announced that things had once again come to a grinding halt.

“The ILWU Canada Longshore Caucus has voted down the Mediators Recommended Terms of Settlement,” Ashton said in the statement. “The ILWU Canada Longshore Caucus does not believe the recommendations had the ability to protect our jobs now or into the future.”

Noting that the “term of the collective agreement that was given with today’s uncertain times, is far too long,” Ashton said the ILWU Canada “must be able to readdress the uncertainty in the world’s financial markets for our members.”

He ended the statement with a notice of yet another strike: “On July 18, 2023, as of 16:30 the ILWU Canada Longshore Division will be back on the picket line for a fair and negotiated collective agreement.”

“The new strike action comes after the contract bargaining teams from ILWU Canada and the British Columbia Maritime Employers Association agreed on a tentative deal, and initially recommended approving it to their members,” wrote Lopez. “However, the tentative deal required ratification from members.”

He also cited a July 18 joint statement from Canada Labour Minister Seamus O’Regan and Transport Minister Omar Alghabra in which they expressed their frustration with the decision.

In a separate post, Lopez notes that the day after ILWU Canada went on strike on the evening of July 18, the Canada Industrial Relations Board ruled the strike illegal, since a 72-hour notice hadn’t been provided. Although the union disputed the decision, members returned to work and issued “a separate notice alerting maritime employers of an upcoming strike on July 22,” Lopez says.

In the post, he provides a timeline of the overall negotiations, which includes a subsequent cancellation of the strike — seemingly in the midst of additional talks — and a July 21 announcement from ILWU Canada that they “will recommend the tentative settlement to members during a stop work meeting on July 25.”

But things fell apart once again, as Lopez notes in his timeline. After additional activity and further negotiations, he notes that on July 30, the BCMEA and ILWU Canada agreed on a new tentative deal “days after union members’ ‘NO’ vote, restarting the ratification process.”

“The maritime employers say the two sides are now planning to recommend the terms of the revised deal to their members,” Lopez adds. “The BCMEA also acknowledged the Canada Industrial Relations Board helped the parties reach a tentative deal.”

Although that sounds like good news, all of the back and forth and seemingly last-minute rejections have put supply chain stakeholders on edge.

In a July 31 CNBC post, Lori Ann LaRocco’s headline captures the angst: “Canadian port fears remain elevated ahead of uncertain union vote on deal.”

“The clock is ticking for the International Longshore and Warehouse Union of Canada to conduct an all-union vote to gain approval for a tentative deal with port management that was agreed to on Sunday,” she writes. “Fears are still running high throughout a supply chain already upended by two weeks of striking at Canada’s West Coast ports.”

At the time, LaRocco noted that although the Canada Industrial Relations Board had called for an August 4 deadline for the vote, the ILWU Canada hadn’t provided any details about the voting process.

But on August 1, ILWU Canada’s Ashton announced there would be “a Stop Work meeting for the 0800 shift to recommend the Terms of Settlement to the membership.”

The same day, another announcement was issued to members about the vote itself: “On Thursday, August 3, and Friday August 4, 2023, voting will take place to ratify the new collective agreement. Please contact your Local for times and locations to vote.”

Only time will tell if the most recent “tentative” agreement will finally become a done deal.

Hoping for better results

On the U.S. East Coast, stakeholders are hoping for better results — which is why they’re getting a head start.

As the WSJ noted in a February 7 article, “Union locals that represent dockworkers at 36 ports from Maine to Texas have opened contract talks with employers well ahead of the current multiyear agreement’s expiration next year. Maritime-industry officials say the early start to negotiations is a signal that both sides are eager to get a new contract amid a period of strained labor-management relations across industries, including at U.S. West Coast ports that compete for shipping trade.”

“The International Longshoremen’s Association, which represents East Coast and Gulf Coast dockworkers, in September asked its locals to open talks with regional employer groups,” the WSJ said, citing James McNamara, an ILA spokesman. “Mr. McNamara said the aim was to resolve or identify local issues by the middle of February so that the ILA can move on to negotiating a master agreement with the United States Maritime Alliance, which represents ocean carriers and terminal operators across Gulf Coast and East Coast ports. The current contract expires Sept. 30, 2024.”