“EMERGING TRENDS IN EMPLOYMENT AND 

 LABOR LAW: LABOR-MANAGEMENT 

RELATIONS IN A GLOBAL ECONOMY” 

HEARING

BEFORE THE 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS 

OF THE 

COMMITTEE ON EDUCATION AND 

THE WORKFORCE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

HEARING HELD IN WASHINGTON, DC, OCTOBER 8, 2002 

Serial No. 107-84 

Printed for the use of the Committee on Education 

and the Workforce

82-896 pdf 

For sale by the Superintendent of Documents, U.S. Government Printing Office 

Internet: bookstore.gpo.gov Phone: (866) 512-1800; DC area (202) 512-1800 

 FAX: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 
ii

COMMITTEE ON EDUCATION AND THE WORKFORCE 

JOHN A. BOEHNER, Ohio, Chairman 

THOMAS E. PETRI, Wisconsin GEORGE MILLER, California 

MARGE ROUKEMA, New Jersey DALE E. KILDEE, Michigan 

CASS BALLENGER, North Carolina MAJOR R. OWENS, New York 

PETER HOEKSTRA, Michigan DONALD M. PAYNE, New Jersey 

HOWARD P. “BUCK” McKEON, California ROBERT E. ANDREWS, New Jersey 

MICHAEL N. CASTLE, Delaware TIM ROEMER, Indiana 

SAM JOHNSON, Texas ROBERT C. “BOBBY” SCOTT, Virginia 

JAMES C. GREENWOOD, Pennsylvania LYNN C. WOOLSEY, California 

LINDSEY O. GRAHAM, South Carolina LYNN N. RIVERS, Michigan 

MARK E. SOUDER, Indiana RUBEN HINOJOSA, Texas 

CHARLIE W. NORWOOD, JR., Georgia CAROLYN McCARTHY, New York 

BOB SCHAFFER, Colorado JOHN F. TIERNEY, Massachusetts 

FRED UPTON, Michigan RON KIND, Wisconsin 

VAN HILLEARY, Tennessee LORETTA SANCHEZ, California 

VERNON J. EHLERS, Michigan HAROLD E. FORD, JR., Tennessee 

THOMAS G. TANCREDO, Colorado DENNIS KUCINICH, Ohio 

JIM DeMINT, South Carolina DAVID WU, Oregon 

JOHNNY ISAKSON, Georgia RUSH D. HOLT, New Jersey 

BOB GOODLATTE, Virginia HILDA L. SOLIS, California 

JUDY BIGGERT, Illinois SUSAN DAVIS, California 

TODD RUSSELL PLATTS, Pennsylvania BETTY McCOLLUM, Minnesota 

PATRICK J. TIBERI, Ohio VACANCY 

 RIC KELLER, Florida 

 TOM OSBORNE, Nebraska 

 JOHN ABNEY CULBERSON, Texas 

 JOE WILSON, South Carolina 

 Paula Nowakowski, Chief of Staff 

 John Lawrence, Minority Staff Director

 SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS 

 SAM JOHNSON, Texas, Chairman

JIM DeMINT, South Carolina ROBERT E. ANDREWS, New Jersey

JOHN BOEHNER, Ohio DONALD M. PAYNE, New Jersey 

MARGE ROUKEMA, New Jersey DALE E. KILDEE, Michigan 

CASS BALLENGER, North Carolina LYNN N. RIVERS, Michigan 

PETER HOEKSTRA, Michigan CAROLYN McCARTHY, New York 

HOWARD P. “BUCK” McKEON, California JOHN F. TIERNEY, Massachusetts 

THOMAS G. TANCREDO, Colorado HAROLD E. FORD, Jr., Tennessee 

PATRICK J. TIBERI, Ohio 

JOE WILSON, South Carolina 
iii

Table of Contents 

OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, SUBCOMMITTEE ON 

EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE 

WORKFORCE ............................................................................................................................... 2

OPENING STATEMENT OF CONGRESSMAN DALE KILDEE, SUBCOMMITTEE ON 

EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON EDUCATION AND THE 

WORKFORCE ............................................................................................................................... 4

STATEMENT OF KATHRYN LAVRIHA, SENIOR VICE PRESIDENT OF GOVERNMENT 

AFFAIRS, INTERNATIONAL MASS RETAIL ASSOCIATION, ARLINGTON, VA.............. 5

STATEMENT OF MAX VEKICH, PRESIDENT, INTERNATIONAL LONGSHORE AND 

WAREHOUSE UNION, LOCAL 24, COSMOPOLIS, WA ......................................................... 7

STATEMENT OF JOHN VICTOR JOKINEN, PRESIDENT, E.J. VICTOR FURNITURE 

COMPANY, MORGANTON, NC............................................................................................... 10

STATEMENT OF CHARLES I. COHEN, SENIOR PARTNER, MORGAN, LEWIS & 

BOCKIUS LLP, WASHINGTON, D.C., TESTIFYING ON BEHALF OF THE U.S. 

CHAMBER OF COMMERCE..................................................................................................... 29

STATEMENT OF DR. HERBERT R. NORTHRUP, PROFESSOR EMERITUS OF 

MANAGEMENT, WHARTON SCHOOL OF THE UNIVERSITY OF PENNSYLVANIA, 

HAVERFORD, PA....................................................................................................................... 31

STATEMENT OF KATHY L. KRIEGER, ASSOCIATE GENERAL COUNSEL, AFL-CIO, 

WASHINGTON, D.C................................................................................................................... 32

STATEMENT OF THOMAS E. FAIRLEY, PRESIDENT AND CEO, TRICO MARINE 

SERVICES, INC., HOUMA, LOUISIANA................................................................................. 35

APPENDIX A - WRITTEN OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE ON 

EDUCATION AND THE WORKFORCE................................................................................... 47

APPENDIX B - WRITTEN STATEMENT OF KATHRYN LAVRIHA, SENIOR VICE 

PRESIDENT OF GOVERNMENT AFFAIRS, INTERNATIONAL MASS RETAIL 

ASSOCIATION, ARLINGTON, VA........................................................................................... 53 
iv

APPENDIX C - WRITTEN STATEMENT OF MAX VEKICH, PRESIDENT, 

INTERNATIONAL LONGSHORE AND WAREHOUSE UNION, LOCAL 24, 

COSMOPOLIS, WA .................................................................................................................... 73

APPENDIX D - WRITTEN STATEMENT OF JOHN VICTOR JOKINEN, PRESIDENT, E.J. 

VICTOR FURNITURE COMPANY, MORGANTON, NC........................................................ 83

APPENDIX E - WRITTEN STATEMENT OF CHARLES I. COHEN, SENIOR PARTNER, 

MORGAN, LEWIS & BOCKIUS LLP, WASHINGTON, D.C., TESTIFYING ON BEHALF 

OF THE U.S. CHAMBER OF COMMERCE.............................................................................. 93

APPENDIX F - WRITTEN STATEMENT OF DR. HERBERT R. NORTHRUP, PROFESSOR 

EMERITUS OF MANAGEMENT, WHARTON SCHOOL OF THE UNIVERSITY OF 

PENNSYLVANIA, HAVERFORD, PA.................................................................................... 103

APPENDIX G - WRITTEN STATEMENT OF KATHY L. KRIEGER, ASSOCIATE 

GENERAL COUNSEL, AFL-CIO, WASHINGTON, D.C....................................................... 129

APPENDIX H - WRITTEN STATEMENT OF THOMAS E. FAIRLEY, PRESIDENT AND 

CEO, TRICO MARINE SERVICES, INC., HOUMA, LA ....................................................... 159

APPENDIX I – SUBMITTED FOR THE RECORD, LETTER FROM ROBERT J. VERDISCO, 

PRESIDENT, IMRA TO PRESIDENT GEORGE W. BUSH, OCTOBER 3, 2002 ................. 171

APPENDIX J – SUBMITTED FOR THE RECORD, LETTER FROM JOHN VICTOR 

JOKINEN, PRESIDENT, E.J. VICTOR FURNITURE COMPANY, TO CONGRESSMAN 

CASS BALLENGER, OCTOBER 5, 2002................................................................................ 175

APPENDIX K – SUBMITTED FOR THE RECORD, GREENHOUSE, STEVEN, “A UNION 

WINS THE GLOBAL GAME”, NEW YORK TIMES, OCTOBER 6, 2002............................ 179

APPENDIX L – SUBMITTED FOR THE RECORD, STATEMENT OF CONGRESSMAN 

JOHN BOOZMAN, 3RD DISTRICT OF ARKANSAS, U.S. HOUSE OF REPRESENTATIVES

.................................................................................................................................................... 185

APPENDIX M – SUBMITTED FOR THE RECORD, PRESIDENTIAL DOCUMENTS, 

EXECUTIVE ORDER 13275, OCTOBER 7, 2002................................................................... 189

APPENDIX N – SUBMITTED FOR THE RECORD, REPORT TO THE PRESIDENT, 

SUBMITTED BY THE PRESIDENT’S BOARD OF INQUIRY ON THE WORK STOPPAGE 

IN THE WEST COAST PORTS, CREATED BY EXECUTIVE ORDER, WILLIAM E. 

BROCK, CHAIRMAN, PATRICK HARDIN, DENNIS R. NOLAN, SAN FRANCISCO, CA, 

OCTOBER 8, 2002..................................................................................................................... 193
v

APPENDIX O – SUBMITTED FOR THE RECORD, ICFTU INTERNATIONAL 

CONFEDERATION OF FREE TRADE UNIONS CHART, (A) “WHY MULTINATIONAL 

BARGAINING NEITHER EXISTS NOR IS DESIRABLE”, HERBERT R. NORTHRUP, (B) 

CODES OF CONDUCT/FRAMEWORK AGREEMENTS CHART, (C) “THE 

INTERNATIONAL TRANSPORT WORKERS’ FEDERATION FLAG OF CONVENIENCE 

SHIPPING CAMPAIGN: 1983-1995, HERBERT R. NORTHRUP, PETER B. SCRASE, 

TRANSPORTATION LAW JOURNAL, VOLUME 23, NUMBER 3, SPRING 1996............ 201

APPENDIX P – SUBMITTED FOR THE RECORD, LETTER FROM THOMAS E. FAIRLEY, 

PRESIDENT AND CEO, TRICO MARINE SERVICES, INC., TO CONGRESSMAN SAM 

JOHNSON, OCTOBER 16, 2002............................................................................................... 281

APPENDIX Q – SUBMITTED FOR THE RECORD, LETTER FROM CONGRESSWOMAN 

CYNTHIA McKINNEY, TO AMBASSADOR ANTONIO DOS SANTOS FRANCA, 

SEPTEMBER 10, 2001 .............................................................................................................. 297

APPENDIX R – SUBMITTED FOR THE RECORD, LETTER FROM CONGRESSMAN 

WILLIAM J. JEFFERSON, TO THOMAS FAIRLEY, APRIL 24, 2001................................. 301

APPENDIX S – SUBMITTED FOR THE RECORD, LETTER FROM CONGRESSMAN 

GENE GREEN, CONGRESSMAN DAVID E. BONIOR, CONGRESSMAN NICK 

LAMPSON, AND CONGRESSWOMAN SHEILA JACKSON LEE, TO THOMAS FAIRLEY, 

FEBRUARY 9, 2001 .................................................................................................................. 305

Table of Indexes.......................................................................................................................... 308 
vi
1

HEARING ON "EMERGING TRENDS IN EMPLOYMENT AND LABOR LAW: 

LABOR-MANAGEMENT RELATIONS IN A GLOBAL ECONOMY" 

____________________

Tuesday, October 8, 2002 

Subcommittee on Employer-Employee Relations 

Committee on Education and the Workforce 

 U. S. House of Representatives 

Washington, D.C. 

 The Subcommittee met, pursuant to call, at 1:36 p.m., in Room 2175, Rayburn House 

Office Building, Hon. Sam Johnson, Chairman of the Subcommittee, presiding. 

 Present: Representatives Johnson, DeMint, Boehner, Ballenger, McKeon, Tancredo, Tiberi, 

Wilson, Andrews, Kildee, Rivers, and Tierney. 

 Staff Present: Stephen Settle, Professional Staff Member; Loren Sweatt, Professional Staff 

Member; Dave Thomas, Senior Legislative Assistant; Ed Gilroy, Director of Workforce Policy; 

Jo-Marie St. Martin, General Counsel; Kevin Smith, Senior Communications Counselor; Patrick 

Lyden, Professional Staff Member; and, Deborah L. Samantar, Committee Clerk/Intern 

Coordinator.

Peter Rutledge, Minority Senior Legislative Associate/Labor; Camille Donald, Minority Counsel, 

Employer-Employee Relations; Michele Varnhagen, Minority Labor Counsel/Coordinator; and, 

Dan Rawlins, Minority Staff Assistant/Labor.

Chairman Johnson. A quorum being present, the Subcommittee on Employer-Employee 

Relations will come to order. 
2

OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

 Good afternoon and welcome. We appreciate you all being here. As all of us know, 29 

West Coast marine terminals have not been operating over the past week. They closed because of a 

labor dispute between the Pacific Maritime Association and the International Longshore and 

Warehouse Union. This maritime association represents steamship lines and runs the terminals 

currently out of operation. The union exclusively represents all the labor used to load, unload and 

otherwise move cargo from the ships that dock at these terminals. 

 What does this mean, and why should we care? 

Each shipping container at these ports holds a part of the national economy, from produce 

to computers, spare auto parts to lumber, consumer electronics and retail items to grain and wheat. 

Any household good imported for an American store shelf can be found stuck in these containers. 

 It is estimated that many, if not most, Members of Congress represent businesses, retailers 

and industries that either have been or soon will be affected by the closure of these terminals. The 

dispute is estimated by some to cost America's economy as much as $1 to $2 billion per day. With 

so many workers laid off in the last year, why should it be up to one union and association to 

determine additional layoffs and unemployment? 

 This is about free enterprise. This dispute is a blatant attack against the freedom of all 

American workers and the benefits of the American economy. Constituents asking what, if 

anything, can Congress do to see that commerce returns to normal have personally contacted me. 

My guess is that most of you have been contacted, too. 

 Companies, small, medium and large, eagerly await their fall, winter and holiday 

merchandise, while agricultural goods spoil on the ships and docks. Businesses can't stock their 

shelves if they don't have the product. Unfortunately, some of these items have already been 

advertised, and now retailers have to explain to customers why they don't have the product. So is 

there anything we can do to ensure that Americans return to work and that our industries and 

economy no longer suffer? 

It goes without saying that Congress can pass legislation tailored to end this labor dispute. 

But as you know, the United States Congress has a long-standing precedent to remain neutral in 

disputes between employers and employees. That is why I am pleased that President Bush has 

used a provision under the National Labor Relations Act to set up a board of inquiry to look into 

the dispute. The board of inquiry, hand-picked, told the White House that the labor standoff 

between the West Coast longshoremen and shippers has no chance of ending soon, handing Mr. 

Bush the ammunition to seek a court injunction to end the shutdown. 

 If it is determined that the labor strike will “imperil national safety and health”, the 

President is authorized to direct the Attorney General to seek an injunction that would provide an 
3

80-day cooling off period, commonly referred to as the Taft-Hartley injunction. Members of 

Congress continue to struggle to get more facts about the impact that this labor dispute is having on 

our national economy and the safety and health of all our citizens. 

 Having said that let me share with you what we hope to learn today.

Now that the President has used his authority, many of us want to know whether this type of 

action is enough, or whether Congress needs to contemplate additional action to ensure a free flow 

of commerce. The benefits of this economy must not be broken because of the interests of a few, 

whether it is labor or management. Understandably, it is prudent that responsible legislators 

recognize before we act whether Congressional action will be effective or needed. 

 We will begin the process of getting those answers with the information provided by our 

first panel. Our second panel today has the opposite concern with labors' failed attempt to 

unionize; they have redirected their efforts overseas. Today’s hearing originally stemmed from 

questions regarding domestic labor disputes and how international pressure points are increasingly 

used to force employers to agree to labor demands, even if it means putting our laws on trial in 

foreign countries. 

 It is no secret that corporate campaigns have recently become the key weapon in the AFLCIO's recommended arsenal of tactics. Unlike more traditional elements of the bargaining process, 

corporate campaigns center on image management; that is, the objective of these companies is to 

make the employer look bad in the public eye. Their goal is to move the targeted employer toward 

an unfavorable image with very high visibility. We will learn more about these general smear 

tactics, but our true interest is how these negative campaigns have spread into the global 

marketplace. 

 In the 1930s, 40s and 50s, when most of our labor laws were written, the use of 

international boycotts or international public relations campaigns as a tool to influence bargaining 

and organizing were unheard of. Now, thanks to the Information Age, they are common. I believe 

this is something Congress needs to learn more about and perhaps find out if it is an issue that 

demands legislative action or not. 

WRITTEN OPENING STATEMENT OF CHAIRMAN SAM JOHNSON, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, COMMITTEE 

ON EDUCATION AND THE WORKFORCE – SEE APPENDIX A 

Chairman Johnson. I thank both panels of our fine witnesses who have come today. 

I would now yield to Mr. Kildee for any comments he might like to make. 
4

OPENING STATEMENT OF CONGRESSMAN DALE KILDEE, 

SUBCOMMITTEE ON EMPLOYER-EMPLOYEE RELATIONS, 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

Thank you, Mr. Chairman, for yielding to me. I want to welcome today's witnesses on 

behalf of the Ranking Member, Mr. Andrews, whom we expect shortly, and myself. I especially 

want to thank Max Vekich on the first panel and Kathy Krieger, who will be on the next panel, for 

being here this afternoon on rather short notice. 

 We will hear from two panels today on two different subjects. The first panel will discuss 

the West Coast dock lockout, a labor dispute in which a conglomeration of international employers 

has locked out American dock workers on the West Coast in order to obtain a contract that will 

give the union no voice at all as to how much work will be available to its members. 

 The second panel will discuss concerns by American employers that efforts by international 

unions in support of American unions, even in instances where the American workers in question 

have been denied any meaningful ability to organize, are somehow unfair or dangerous. 

Mr. Chairman, I cannot help but be struck by the obvious contradiction that the two panels 

present. International employers are to be defended in their efforts to undermine the wages and 

living standards of American workers, and American workers are to be criticized for seeking 

international support to raise their wages and living standards. The only consistency about this 

hearing would seem to be our desire to undermine the wages and living standards of American 

workers.

 I look forward to today's testimony. Both issues under discussion today raise serious 

questions that will have significant ramifications for what kind of future American workers will 

face. While it is very probable that my own position on these issues is quite different from those of 

Chairman Johnson, nevertheless I think we are performing an important service by publicizing 

these alternative visions of our future. 

 Mr. Chairman, I yield back the balance of my time. 

Chairman Johnson. Where else but in America can we agree to disagree? 

Mr. Kildee. That is right. It is a great country. 

Chairman Johnson. Yes, it is. 

 I am going to limit the opening statements to the Ranking Minority Member, and myself 

and if other Members have statements, they can be included in the record. With that, I ask 

unanimous consent for the hearing record to remain open 14 days to allow Members' statements 

and other extraneous material referenced during the hearing to be submitted. 

 Hearing no objection, so ordered. 
5

 In addition, I have a letter here from Congressman Boozman of Arkansas that I would like 

to enter into the record. Without objection, so ordered. 

 We have two panels, and I will begin by introducing the first panel. Our first witness today 

is Ms. Katherine Lavriha. She is Senior Vice President of Government Affairs for the International 

Mass Retail Association. Our second witness will be Mr. Max Vekich. Mr. Vekich is a member of 

the International Longshore and Warehouse Union. 

 I will now yield to the gentleman from North Carolina for the purpose of introducing our 

last witness on the first panel. Mr. Ballenger, you are recognized. 

Mr. Ballenger. Thank you, Mr. Chairman. 

I am pleased to introduce today Mr. John Jokinen, Chief Executive Officer of E.J. Victor 

Furniture Company, a furniture manufacturer from my “neck of the woods”, Morganton, North 

Carolina. Privately owned, E.J. Victor employs about 300 talented artisans and associates. E.J. 

Victor readily adapts to market changes while manufacturing the highest quality furniture, handcrafted to perfection. Mr. Jokinen is well qualified to enlighten the Subcommittee about the 

economic impact of the West Coast port shutdown, and we are delighted to have him with us today. 

 Thank you. 

Chairman Johnson. Thank you, Mr. Ballenger. I appreciate the introduction. 

 Before the witnesses begin their testimony, I would like to remind the Members they will be 

asking questions of the witnesses after the complete panel has testified. In addition, Committee 

Rule (2) imposes a 5-minute limit on all questions and a 5-minute limit on your testimony. You 

will see a green light, and with one more minute left a yellow light. Having said all that, Ms. 

Lavriha, you may begin your testimony. 

STATEMENT OF KATHRYN LAVRIHA, SENIOR VICE PRESIDENT OF 

GOVERNMENT AFFAIRS, INTERNATIONAL MASS RETAIL 

ASSOCIATION, ARLINGTON, VA

Good afternoon. My name is Katherine Lavriha, and I am the Senior Vice President of 

Government Affairs for the International Mass Retail Association. Thank you for the opportunity 

to come before you today and discuss the impact that the closing of the West Coast ports has had 

on the mass retail industry. 

 IMRA is the leading alliance of retailers and their product and service suppliers. IMRA 

members represent over $1 trillion in sales annually and operate over 100,000 stores, 

manufacturing facilities and distribution centers nationwide. 
6

 Virtually all of IMRA's members depend on global commerce and the maritime 

transportation system. Trans-Pacific trade is essential to the consumer goods industry. Retailers 

and their suppliers import finished products and food; suppliers and consumer product 

manufacturers import parts for production. In addition, many IMRA members, both retailers and 

suppliers, export consumer products and food to markets abroad and to Alaska and Hawaii. 

 Over the last 20 years, the consumer goods industry has made a significant investment in 

just-in-time delivery of parts, finished products and food products. In fact, driving time out of the 

supply chain has been a major focus of cost-cutting efforts of U.S. industry. Today manufacturers 

regularly keep no more than 2 weeks of critical parts on hand. Retailers, especially those in the 

fashion business, can no longer afford to carry large inventories. Their suppliers face strict 

delivery deadlines and can face lost orders if delivery dates are not met. 

 For this reason, the current situation on the West Coast stocks has become a problem in 

more ways than one. U.S. West Coast ports are significantly less efficient than their counterparts 

overseas. The Port of L.A.-Long Beach, for instance, may be the world's third largest port, but it 

does not even rank in the top 10 in terms of throughput. As trade expands, there are open questions 

as to whether our ports can adequately manage the growth without serious congestion and pollution 

side effects. I should also add that our seaports face a major new challenge in the face of the events 

of September 11th in securing water borne commerce. One essential part in meeting these 

challenges is the use of information technology. To date, many of the processes at our Nation's 

ports use paper and pencils instead of hand scanners and computers because of the contract 

between the PMA and the ILWU.

So it comes as no surprise that terminal operators, as represented by the PMA, have insisted 

on changes in the current labor contract that would clear the way for the introduction of new 

information technologies. For the ILWU, of course, new technologies potentially mean fewer jobs 

and loss of jurisdiction. By now you are well aware of how the negotiations have progressed and 

the reasons for why the PMA initiated the lockout. 

What makes this struggle so problematic for those of us who are port customers is that it is 

being waged coast wide by two entities that have monopoly control over the supply chain from 

Asia. I am not an expert in labor relations, so I do not know how we came to this situation where 

only one labor contract covers commercial terminals in all 29 ports on the West Coast. Thirty 

years ago, the last time we had a strike on the West Coast, this monopoly posed a significant 

problem, but it hardly brought the economy to its knees. 

Today that is no longer the case. This dispute, now in its second week, not only threatens to 

take the U.S. economy into a double-dip recession, but also could well touch off a serious recession 

in Asia. Let me address the impact on the retail sector. My written statement addresses some of the 

other sectors being harmed as well. 

 The retail industry is virtually certain now to have a poor holiday season. Even if the ports 

are reopened today, enormous costs have been incurred and will be incurred in the air shipping of 

critical holiday merchandise. Other merchandise will miss its in-store delivery dates, meaning that 
7

holiday merchandise will arrive late just in time to be marked down. 

 There are only two ways to reopen the ports: First, the private parties in this dispute could 

agree to a new contract. Second, that a second method for reopening the ports is the use of the TaftHartley Act, which the President is moving forward with. 

 In closing, this situation raises some serious issues that Congress must address in the future. 

The maritime transportation system must receive more attention on Capitol Hill. IMRA has no 

specific legislative recommendations at this time, but it strikes me that a labor contract that covers 

every port on our West Coast poses significant future risks to our economy. The government 

regularly disciplines this kind of monopoly power, and we would urge Congress to consider 

whether there are some actions that are needed in this case. 

 Labor contracts on the East Coast are not structured in this manner. If we had a labor 

dispute on the East Coast, it would affect only a single port and provide alternatives that would not 

shut down commerce entirely. 

 I thank you for this opportunity to present our views to you today. Thank you. 

WRITTEN STATEMENT OF KATHRYN LAVRIHA, SENIOR VICE 

PRESIDENT OF GOVERNMENT AFFAIRS, INTERNATIONAL MASS RETAIL 

ASSOCIATION, ARLINGTON, VA – SEE APPENDIX B 

Chairman Johnson. Thank you. We appreciate your testimony. 

Mr. Vekich. 

STATEMENT OF MAX VEKICH, PRESIDENT, INTERNATIONAL 

LONGSHORE AND WAREHOUSE UNION, LOCAL 24, COSMOPOLIS, WA

Thank you, Mr. Chairman, and Members of the Subcommittee on Employer-Employee 

Relations. My name is Max Vekich, and I am here on behalf of my 10,500 locked out brothers and 

sisters of the International Longshore and Warehouse Union. I am President Of Longshore Local 

24 in Washington State. 

It has been 11 days since our employers locked the gates to the West Coast ports and 

refused to allow us to go to work. Our employer, the PMA, is a conglomeration of maritime 

corporations. Ninety percent of PMA members are foreign companies. We are incensed that the 

PMA has such low regard for American workers, consumers and businesses, that they would bring 

shipping to a standstill and threaten the U.S. economy for no good reason. 
8

 As you know, the President has begun the process of invoking Taft-Hartley. We are 

opposed to the implication of Taft-Hartley. We had hoped that the President would have signaled 

his support for the collective bargaining process. The PMA started negotiations last May by 

repeatedly threatening to lock out our members if we do not capitulate to their demands. Their 

whole bargaining strategy centered on presidential intervention. If we allow them to get away with 

this cynical strategy, then collective bargaining in this country is imperiled. 

 Last Sunday the PMA reneged on tentative agreements they made the previous day on the 

issue of technology and the role of workers and the implementation of that technology. The 

Federal mediator, on behalf of President Bush, tried to broker a deal to get the ports open while the 

ILWU and the PMA continue to negotiate. The ILWU accepted a 7-day extension of the old 

contract without preconditions. The PMA rejected the mediator's deal. The members of the ILWU 

want to get back to work. We do not want to see any more workers, consumers or businesses 

harmed by the PMA's irresponsible lockout of American workers. The PMA apparently believes it 

can get this administration to do what it cannot accomplish at the bargaining table. This is the only 

reason they continue to refuse to deal honestly with the union. 

 Last week, the union achieved some success in terms of moving cargo. The union 

successfully pressured the foreign-dominated PMA to move United States military cargo for our 

troops overseas. The union pressured the PMA to move cargo and essential supplies to Alaska and 

Hawaii, two States completely dependent on ocean transportation. 

 And right now the ILWU is asking the PMA for the same for Guam. The ILWU bypassed 

the Stevedoring Services of America when they refused to dispatch longshore workers to help 

move baggage from stranded cruise vessel passengers. We helped move the baggage for these 

stranded passengers anyway. The ILWU is also placing pressure on the PMA to move agricultural 

products, particularly perishable items and grain. The PMA does not care how much our farmers 

are suffering due to their irresponsible lockout of American workers. They are only interested in 

achieving their negotiating goals. 

 The PMA has demonstrated its complete disrespect for workers and the American people 

by not taking this process seriously. They went so far as to bring armed thugs to a Federal 

mediation session. They refused to meet the union halfway on technology and jobs. They 

attempted to gain leverage in return for moving essential cargo. This is not bargaining in good 

faith.

 For the two years preceding contract negotiations, the PMA repeatedly said that the ILWU 

would slow down work when the contract expired in order to gain bargaining leverage. My 

brothers and sisters had other ideas. In a sign of good faith and a great concern for the economy, 

we did not slow down. ILWU members set records for cargo movements in the West Coast ports 

in June, July and August. 

 As a consequence of the increased cargo volume, the number and severity of accidents on 

the job increased. In response to the high number of accidents, the ILWU instituted a safety 

program that urged members to adhere to all safety regulations in our safety code that was part of 

the current contract. The critical safety regulations were agreed to by the PMA and the ILWU. 
9

The CEO of the PMA reportedly threw a temper tantrum and decided to shut down West Coast 

commerce because of the safety program. 

 Five of my union brothers, Rudy Acosta, Richie Lopes, Jr., Dick Peters, Mario Gonzales, 

and John Prohorroff, were killed on the job over the course of the last seven months. They did not 

go home to their families at the end of the workday. In 2001 there was not one fatality involving 

longshore workers in West Coast ports. In 2002 there has been five to date. Yet the ILWU is 

accused of a slowdown, and West Coast commerce is brought to a halt in response to a safety 

program? 

 Our job is the second most dangerous in the country, right behind mining. We have a 

strong union and we have been able to negotiate good contracts for the working men and women of 

the ILWU. We do not apologize for raising the standard of living for working families, but one 

needs to be accurate when we talk about the average salary of a longshore worker. The PMA 

claims to the media that the average longshoreman makes $106,000, but on page 62 of their 2001 

report, they listed the average income as $80,088. 

 On September 20th, 2001, the union's Labor Relations Committee proposed that the union 

employer work together to beef up security at West Coast ports as a result of the new threats of 

terrorism to our Nation's ports. The employer group has objected to every program that the union 

has proposed to truly enhance port security. The union proposed that all marine terminals institute 

and build on the kind of security for containers that the American President Lines performs. On the 

other hand, marine terminals managed by the Stevedoring Services of America, including terminals 

that handle China Ocean Shipping Company vessels, perform no security checks of containers. We 

think it is vital to the American people to check containers. Our employers are desperately trying to 

kill any user fee to help pay for the security that they have failed to provide for the American 

people.

 Finally, we ask Members of Congress to recognize who has done their duty here - American 

workers. The working men and women of the ILWU stayed on the job until they were locked out. 

The ILWU worked in good faith with the Federal mediator and agreed to his suggestions, like the 

7-day extension. All American workers will be hurt if President Bush invokes Taft-Hartley. These 

injunctions ostensibly promote a cooling-off period between workers and management, but in most 

cases presidential interference only adds to a heating up of the conflict. 

 It is the members of the PMA that needed to be shamed into opening the docks to the 

American workforce. The ILWU has acted responsibly. Thank you. 

WRITTEN STATEMENT OF MAX VEKICH, PRESIDENT, INTERNATIONAL 

LONGSHORE AND WAREHOUSE UNION, LOCAL 24, COSMOPOLIS, WA – 

SEE APPENDIX C 
10

Chairman Johnson. Thank you, sir. We appreciate your testimony as well. 

 Mr. Jokinen. 

STATEMENT OF JOHN VICTOR JOKINEN, PRESIDENT, E.J. VICTOR 

FURNITURE COMPANY, MORGANTON, NC

Good afternoon Mr. Chairman and Members of the Subcommittee. My name is John Victor 

Jokinen, and I am President of E.J. Victor Furniture Company, a small manufacturing company 

located in Morganton, North Carolina. At the outset, I would like to express my appreciation to the 

Subcommittee and to Representative Cass Ballenger for allowing me this opportunity to share our 

company's concerns about the current labor dispute affecting ports on the West Coast. 

 About a dozen years ago, two business partners and I set out to establish a furniture 

manufacturing company that would provide an alternative to the growing trend in our industry 

towards high-volume manufacturing that too often minimizes the importance of hand 

craftsmanship. When we founded E.J. Victor in 1990, we created a company that would be 

committed to preserving time-honored construction methods used to create exquisite furniture for 

the home. 

 We began with 33 employees, and we initially offered 15 pieces of wood and 10 pieces of 

upholstered furniture in the style of English reproduction. Today we employ more than 250 

associates in three plants, covering more than 360,000 square feet of manufacturing space. Our 

current product selection includes wood furniture commonly known as "casegoods" in our industry 

that is, dining room and bedroom furniture, upholstery, and smaller items known as occasional 

furniture, such as coffee tables and end takes. 

 At E.J. Victor meticulous attention is paid to handpicking premium materials that go into 

making our casegoods and upholstery items. Only the finest grade of hardwood solids and veneers, 

finishing materials, fabrics and custom made hardware are used in our manufacturing process. As 

a result, our products have found their way into homes not only here in the United States but also 

abroad, particularly in Japan, Taiwan, Turkey, Saudi Arabia, Kuwait, Italy and Russia. We have 

also been very fortunate to supply an assortment of furnishings to American embassies and 

ambassadors' residences around the world, thanks to procurement opportunities available through 

the U.S. State Department. 

 Despite our export distribution channels, the unrivaled work of our skilled artisans and our 

strong commitment to manufacturing the highest quality furniture, we are not immune from 

competition. The global economy that imports from the Pacific Rim and other sources has exerted 

tremendous pressure on smaller manufacturers like us who are often torn between preserving a 

dedicated local workforce and bringing in furniture products from offshore sources in order to 

remain competitive. 
11

 As a business decision, we concluded that the best way to remain competitive and retain our 

employees, particularly as the economy slid towards recession, was to begin importing a small 

segment of our product line made up of those occasional pieces that I mentioned earlier, as well as 

a collection of decorative accessories such as lamps, wall art and ceramics. Today imports 

represent roughly 25 percent of our overall product line, with the remaining 75 percent 

manufactured in our three North Carolina facilities. It is because our company depends on both 

imports and exports that I am appearing before you today to discuss current work stoppages 

affecting ports on the West Coast.

The situation is made all the more critical for the domestic furniture industry, because this 

dispute comes at a time when thousands of home manufacturers like us are preparing for the fall 

International Home Furnishings Market, which begins next week in High Point, North Carolina. If 

you are not familiar with what Market is all about, I can tell you that the twice-annual trade show is 

the single most important event for the furniture industry. More than 3,000 home furnishings 

manufacturers gather in High Point each April and October to exhibit their new products to more 

than 83,000 retail store owners, interior designers, architects and other design professionals from 

all 50 States and 110 foreign countries. Because almost half of the U.S. furniture sales are derived 

from products imported from abroad, especially from the Pacific Rim, numerous manufacturers are 

depending on their market samples to arrive in time for this major trade event. Failure to do so will 

most assuredly be reflected in a marked decrease in sales orders. As a result, the furniture industry 

can ill afford a prolonged disruption in the flow of goods both into and out of our Nation's ports. 

We at E.J. Victor are especially concerned about the situation, because we roughly do 25 

percent of our business at Market. That translates to nearly $3 million in finished furniture 

products that we will not be able to ship over the course of the next 6 months. If our clients are not 

able to see these Market samples firsthand, for example, we will not be able to ship our 

domestically manufactured dining room tables, sideboards and china cabinets without the 

accompanying chairs, which are brought in from overseas. What's more, we have just completed 

construction of an additional 8300 square feet of display space at our permanent showroom in High 

Point at a cost of $1.4 million. Without being able to transport our incoming samples from Long 

Beach, California to High Point, the new addition will have little practical use when market opens 

next week. 

 At the same time, our export operations are at stake in this dispute. At this time, we have 

shipments of furniture products waiting to be loaded in Long Beach in outbound ships headed for 

China and Japan. Exports contribute more than $2.5 million in receipts each year and are an 

integral and growing part of our company's business. 

Mr. Chairman, ours is a proud company. Our employees are dedicated professionals who 

love their work and who put themselves into every piece of furniture we make. We are a small 

company, among the few that have not closed down in Burke County, a rural area where 

unemployment and limited economic development are already a challenge, and we feel very 

strongly about remaining a predominantly domestic manufacturer, but we are not invincible. We 

do not enjoy profit margins that will allow us to absorb the kind of losses that are certain to result 

from a prolonged shutdown in West Coast port operations. Furniture manufacturing and retailing 

is a very competitive business, one that requires us to constantly strive to innovate and modernize 
12

and adjust to every change in business consumer preferences. Because we operate in such a highly 

competitive environment where consumers can choose from so many manufacturers, my greatest 

concern is that if this work stoppage continues in its current form with no meaningful resolution in 

sight, we will more likely face the unpleasant task of having to reduce our workforce, a step none 

of us wants to take in our close-knit community. 

 It is my sincere hope that the Administration's decision to step in and assess the economic 

consequences of the work stoppage will convince both parties involved that this dispute needs to be 

resolved quickly before the cost of the national economy becomes larger and more pertinent. I will 

admit, Mr. Chairman, that, too, I am not a labor relations expert, and I do not presume to have a 

long-term solution to the particular dispute. What I am skilled at is running a manufacturing 

business that employs dedicated, hard-working artisans and crafts people who use time-honored 

techniques to create truly exceptional residential furniture. It is on their behalf that I ask for your 

bipartisan support for bringing this dispute to a peaceful, productive and, might I add, quick 

resolution.

WRITTEN STATEMENT OF JOHN VICTOR JOKINEN, PRESIDENT, E.J. 

VICTOR FURNITURE COMPANY, MORGANTON, NC – SEE APPENDIX D 

Chairman Johnson. Thank you for your testimony. 

I wonder if I could ask a question of the unions. You indicated that salaries are much lower 

than everybody says. Is it true your benefits package doesn't cost your employees anything and 

that it averages around $42,000 a year? 

Mr. Vekich. I think you will find that some of the benefits were counted twice in the calculations 

and portrayal. We have a good benefits package, and we do not have a co-pay. But if I could 

explain how we got there. 

Forty years ago we made an agreement with our employers to embrace technology, called 

the M&M agreement, or mechanization and manpower. In return for us adopting technology and 

labor-saving devices, the employers made a promise to us that they would pay for health care for 

the life of all the workers and their beneficiaries. 

Chairman Johnson. Are they doing that? 

Mr. Vekich. Yes, they are. 

Chairman Johnson. Okay, but I understand that technology increases are part of the fight that is 

going on right now. Why are you fighting technology improvements when some of the foreign 

ports can unload at four, five, six, twelve times the rate you do? 
13

Mr. Vekich. Well, I think it has been overstated how many foreign ports actually can load faster 

than we can. 

Chairman Johnson. Well, let me ask the question differently. Is there technology out there that 

would allow us to unload faster? 

Mr. Vekich. The employer right now in our current contract can implement technological 

changes. He can do it on his own, unilaterally. What we are asking for is not that we don't want 

technology, because really technology has been our friend. It has allowed us to make money, 

allowed our families to have good livings, allowed us to raise our standard of living. 

 At the same time we went from 100,000 people to 10,000 people in the last 40 years. So we 

are not afraid of technology. You know, we have a lot of smart people that are very able, and I 

haven't seen a person on the docks use a pencil and paper for 5 years. So most people I see are 

busy punching in computers and using scanners. That is what I see as technology on the docks. 

Chairman Johnson. What is the difference between our ports and Hong Kong that they say can 

move four times what we do? 

Mr. Vekich. Well, I think I have crane operators that I know in L.A. who can load as fast as 

anybody in Hong Kong. Part of the problem is the skill levels of people. We haven't trained 

enough workers, I don't feel, to do the real, highly skilled jobs, and there is a lot of competition for 

those folks. It takes a while to learn how to move container cranes so you can load 50 loads in an 

hour. You know, it takes some skill there to do that, and we have not had the training to keep up 

with the demand. 

 Things are exploding in L.A. That place is booming. I work there and we are a very 

mobile workforce. We work up and down the coast, and we go to wherever the work is. I would 

think if you put a Hong Kong longshore worker group and an L.A. longshore worker group 

together, I think we could show you we can load just as fast. 

Chairman Johnson. Well, but the statistics don't indicate that you are doing that. 

Mr. Vekich. Some of that is infrastructure, Mr. Chairman. Some of that is infrastructure and 

much-needed improvements to the port. As far as the congestion in the port of L.A.-Long Beach 

goes, a lot of that has to do with the roads and the rail-put getting out. It is hard. We need to invest 

in our infrastructure. We need to invest a lot, and that is the major problem for more cargo and 

throughput in the L.A.-Long Beach area. 

Chairman Johnson. Do you ever consult with your brother unions like the Teamsters, for 

example, who drive the trucks? I know they too are suffering from your walkout. Have you talked 

to them about this? 

Mr. Vekich. We have talked to the Teamsters. I am not International President. I couldn't tell you 

what the conversations were, but we have had a lot of support from them. We would like to see 

them also organized and unionize and those truck drivers given some benefits and be beneficiaries 
14

of the international trade, which isn't happening to date to a far enough extent. 

Chairman Johnson. I would like to ask both of the others, when you knew this was coming why 

didn't you try to arrange for an earlier shipment or a different kind of shipment? Is there some 

reason? 

Ms. Lavriha. Number one, we did inform our retailers of this, and so some of them were able to 

increase some of their shipments, but as I reference in my testimony, we are trying to cut costs and 

be more efficient with the just-in-time system so that we can pass on savings to consumers and be 

more efficient. So we have pared down our inventories. We have pared down our warehouses to 

save consumers' prices, and so to say that we can stock a lot of stuff, we don't have anywhere to put 

it. And so it is a very different system than it was.

Chairman Johnson. Yeah. I understand the warehousing problem, but could you see this 

coming? 

Ms. Lavriha. We did see this coming. We did predict it. We alerted many of our members, but 

many of their ships had already left the ports in Asia, and many of our ships are sitting out there in 

the harbor with goods on them that are waiting to be unloaded. So the stuff that we had hoped to 

get in is not available. 

Chairman Johnson. Mr. Jokinen? 

Mr. Jokinen. We anticipated some of the problems, and we got some of the goods that we had for 

Market shipped on earlier shipments. But our only other solution would be to pay exorbitant 

airfreight and these are sometimes fairly bulky items that just would have been too cost prohibitive.

So we rolled the dice and hoped that the settlement would be finalized by then. 

Chairman Johnson. And there is no alternative transportation mode, I understand? 

Ms. Lavriha. Well, we have one apparel retailer that has already spent well over a million dollars 

to airfreight their goods in, because as you full well know, apparel fashion turns very quickly, and 

so you have to move it very quickly. So they have already spent beyond what they are waiting on 

the ports for in merchandise dollars to try and fly some stuff in. And other products are just too 

heavy and just too expensive to do that. 

Chairman Johnson. How about foodstuffs? Is there any way to rectify the problem of it rotting 

on the dock? 

Ms. Lavriha. That is a major challenge as well, and at this point we are trying to improve that, but 

we have no solution for that at this time. 

Chairman Johnson. Do you have any idea what the Congress could do to help? You know, 

making a law doesn't always helps things. Sometimes it hurts. 
15

Ms. Lavriha. We are not here to ask you to make a law. We are here to urge the two parties, the 

PMA and the ILWU, to get back to the table, to settle their differences, get a good contract and 

reopen the ports so we can move our goods and put goods on the shelves for Christmas. That is all 

we are here to ask you for today. 

Chairman Johnson. Well, that is essentially what the board is going to recommend to the 

President, but an 80-day cooling off period doesn't necessarily make things happen. Will you 

engage in a slowdown if you have to go back to work? 

Mr. Vekich. I think most of our members are happy to get back to work and they are looking 

forward to the opportunity to get working again. 

Chairman Johnson. At full speed? 

Mr. Vekich. I am assuming so, Mr. Chairman. I am assuming so. 

Chairman Johnson. I figured you would answer that way, and that is the right answer. Thank 

you. I appreciate your testimony. 

I will yield now to Mr. Kildee if he has questions. 

Mr. Kildee. Thank you, Mr. Chairman. 

Mr. Vekich, who bargains for the PMA, since most of its members are foreign-owned 

companies? Who determines PMA's bargaining strategy and contract offers? 

Mr. Vekich. Well, I am not an expert on the PMA, but to the best of my knowledge it appears that 

the PMA is a nonprofit employer association, and they handle the bargaining along with an 

executive committee and a board of directors. Now, foreign shipping companies dominate the 

board of directors. 

Mr. Kildee. Did the PMA improve its contract offers during the failed bargaining or mediation 

process? 

Mr. Vekich. It actually slipped. Their position slipped, and the last one we received was a lesser 

offer. And so it has been eroding. 

Mr. Kildee. What are the key remaining issues of the dispute now in the lockout? 

Mr. Vekich. Well, you know, the union has offered basically to move ahead on technology issues. 

Now, we are probably putting an end to up to 400 of our people's jobs through attrition and 

retirement, and what we would like to secure is future jobs with technology.

There are basically about 50 to 100 planning jobs that we think should come to us that are 

in the technological chain right now. We think those should be our jobs, because they are shiprelated, and we normally have done all the ship work. And so that is what we are after, but it is 
16

important, I think, for us to secure our future, even though it is a much lesser, more diminished 

future.

But jobs are going to be lost in the long haul. We realize technology is going to change and 

is going to reduce the need for our marine clerks, and we have accepted that. Our marine clerks 

have accepted that. In fact, they have engineered the program that was put on the table to discuss 

the technological changes on the docks. 

Mr. Kildee. The General Motors Corporation several years ago in my district completely rebuilt 

an assembly plant, and it was a very high-tech plant, and they had joint committees with the United 

Auto Workers and General Motors to work that out. Has PMA worked closely with you involving 

your members in the technological changes? 

Mr. Vekich. First, they relied on us to put the technological changes on the table. We kept asking 

them what they would like. We would welcome working, Mr. Kildee, with the PMA in the future 

for our industry. We would like to be at the table and jointly agree and jointly move forward on 

technology. It is our future. We recognize that. 

Mr. Kildee. I think that is true, the ILWU did the same thing, too. I think unions recognize that 

technology is here, and it is generally good if management sits down and involves the workers. 

Very often the workers see things on a day-by-day basis and know what technology will help both 

labor and management, and the UAW and GM have had a good record on that, and I would hope 

that they could replicate that in your situation there. 

Ms. Lavriha, in your testimony you state that the workers should agree to a day-to-day 

contract extension. I think this weekend the workers agreed to a 7-day extension, but the PMA 

refused. Do you know why the PMA refused that 7-day extension? 

Ms. Lavriha. I do not. 

Mr. Kildee. Mr. Vekich, do you have any idea why? 

Mr. Vekich. I couldn't speak for the PMA, but I think they felt they had a superior bargaining 

position. At that point in time, I think they wanted to push it into presidential intervention. 

Mr. Kildee. They may from the beginning have hoped that the Taft-Hartley injunction would be 

imposed and that would be the solution rather than acting in good faith collective bargaining. 

Mr. Vekich. That is how it looks on the docks. 

Mr. Kildee. Okay.

Ms. Lavriha, the PMA has locked down the workers and shut down the West Coast ports 

right now, and you suggest that we should consider forbidding the union from having a single 

contract on the West Coast. Shouldn't we, if we were going to consider that, consider requiring 

each port to be separately and independently owned? I mean, you have one contract, and it is not 
17

just the union. When you have a labor dispute, it is both union and labor-management involved in 

the dispute. Is it your contention that it is only collective activity by workers that poses a threat and 

not collective action by employers? 

Ms. Lavriha. I don't really feel that I can respond to that, other than that we feel that really both 

sides should have the opportunity to decide what is best for them, and at this point we are not 

taking a position on either side. We don't know enough about it, but we think that both sides 

should be able to work out how they want to operate the ports on the West Coast. 

Mr. Kildee. Well, I will conclude, Mr. Chairman. But I really feel that when management 

recognizes that there are long-term interests, it is better to settle through the collective bargaining 

process rather than bring the Federal Government, and the Federal courts into it. It is really in the 

long-term interest of the country too, rather than having an imposed settlement and an injunction. 

So I would hope PMA would try to use the collective bargaining system in a better way. 

 Thank you, Mr. Chairman. 

Chairman Johnson. Thank you.

Mr. Boehner, you are recognized. 

Mr. Boehner. Thank you, Mr. Chairman. 

As most of my colleagues on this panel know, I am one who doesn't really believe that 

government ought to involve itself in a dispute between labor and management, that in the end the 

two have to work together and come to some resolution. But I have read the report from the 

President's board of inquiry with regard to this work stoppage, and I quote, “We believe the seeds 

of distrust have been widely sown, poisoning the atmosphere of mutual trust and respect which 

could enable a resolution of seemingly intractable issues. For example, the parties have been 

unable to agree even on such matters as the length of a proposed temporary contract extension, 

although both know that their standoff costs the Nation billions of dollars. We have no confidence 

that the parties will resolve the West Coast ports dispute within a reasonable period of time.” 

 I think that is the point here. It is not about who is right or who is wrong. Our slightly 

growing economy is being damaged severely, and millions of American workers, union and 

nonunion, are about to see their own livelihoods come to a halt unless something is done to resolve 

this issue to reopen the ports. And therefore, I am hopeful that the President will in fact invoke 

Taft-Hartley to get the ports open again and allow the parties such time as needed to try to come to 

some resolution of this. 

 Let me also say thank you to the three witnesses for coming here and sharing experiences in 

terms of how this is affecting you. Mr. Vekich do we see any resolution here? 

Mr. Vekich. Congressman, we have had labor peace on the West Coast docks for 30 years, and we 

have always managed to reach a contract settlement. We haven't always liked each other, but we 
18

have always gotten a contract. So I am optimistic. 

Mr. Boehner. With this work slowdown, and now possible lockout that is underway don’t you 

feel that you are holding the rest of the American economy at hostage? 

Mr. Vekich. We didn't start this fight. We were the ones locked out, and I think the media hasn't 

gotten it quite right. They keep talking about a strike. There are no workers striking here. There 

are workers who are locked out. 

Mr. Boehner. Are you suggesting there wasn't a slowdown before the lockout began? 

Mr. Vekich. You know, there are problems that various employers have with various employees, 

and I really don't know. In my port, there was no slowdown that was going on. We were working 

as normal. 

Mr. Boehner. What do you think the prospects are for coming to an agreement? 

Mr. Vekich. I think it is possible. I don't think they were that far apart. It sounds like they were 

worlds apart, but my feeling was there wasn't that much separating them. I heard one amount of 

money, $20 million that was separating the two parties. 

Mr. Boehner. Over what period of time? 

Mr. Vekich. On the technology issue, which seemed to be the major sticking point. 

Mr. Boehner. If the President were to impose a Taft-Hartley back to work order, do you think that 

would improve the prospects for coming to some agreement? 

Mr. Vekich. I was a senior in high school when Richard Nixon imposed Taft-Hartley on my 

family. We had been on strike for 90 days, and then we were out of work after the end of the TaftHartley cooling off period for an additional 3 months. It didn't seem to help at that point in time. 

 I want to say, though, that my side, the union, felt very good about the Federal mediation 

efforts. You know we really felt the Federal mediator, who was a Republican, had done a heck of a 

job and had done his best to try to help things along. We had never gone to mediation before. You 

need to know, this was a big change for us. We have always been a union that felt we could take 

care of ourselves and we didn't need any of them. But going to mediation was a change. It was a 

change into the modern era. You know, we are not afraid of technology, and now we are not afraid 

of mediation. 

Mr. Boehner. Well, if the President were to impose a back to work order, how would the union 

look at this action? 

Mr. Vekich. Well, I don't think there are any illusions here. I think we think it is coming. 
19

Mr. Boehner. But how would you feel about it if it happens? 

Mr. Vekich. We are hoping that we can still use the Federal mediator, that he can still be 

informed, because we think that that showed some prospects and some promise. 

Mr. Boehner. You suggested earlier in your testimony that you believed that you are locked out 

and you want to go back to work. If the President were to put you back to work, I have to think that 

would make you very happy. 

Mr. Vekich. If it prolongs this dispute further, and it puts us way past who knows when, and sides 

tend to get more upset and more entrenched, it seems to me that prolonging the dispute doesn't 

help. We would have stayed at the table and kept mediating and kept negotiating. 

Mr. Boehner. But don't you and the PMA understand that the rest of the Nation's economy is at 

risk while you are sitting there arguing? 

Mr. Vekich. That is why we set records for cargo movement in the period of time I talked about, 

June, July, August, because we are sensitive to the economy, and we are sensitive to our fellow 

American workers. 

Mr. Boehner. Thank you, Mr. Chairman. 

Chairman Johnson. I would like to remind the gentleman that we are at war, and it is not a very 

good time to be having a strike or a work stoppage. The lockout and a strike are synonymous with 

Taft-Hartley and can be used in either case. You know that. 

Mr. Ballenger, would you care to question? 

Mr. Ballenger. Thank you, Mr. Chairman. 

Mr. Jokinen, you are a businessman. Basically I am a businessman, and I would like to ask 

a question about problems like this. I don't know whether it makes sense, but if you had a chair leg 

that you could produce in your own factory and you had a chair leg that you were having made in 

China, recognizing that the labor costs are substantially different, why wouldn’t you get that chair 

leg manufactured in Colombia, which would be an East Coast port? I realize it is hard to back off 

and change your source of supply in a short period of time, but doesn’t the idea that this settlement 

80-days from now may not be any better than it is right now make you think about that? 

Mr. Jokinen. Well, Mr. Ballenger, we bring most of our things in ocean freight into East Coast 

ports, even from China. The only time we utilize the Long Beach port is to utilize tandem trucking 

opportunities, where it takes an ocean liner to go from Hong Kong to L.A. about 10 days and then 

about 3 days to be trucked across the country. 

 When the time element is not such an essential ingredient as it is today because of Market, 

we generally get goods in about 33 days all the way from China to Charleston and then trucked 
20

across the Southeast. 

Mr. Ballenger. Is it basically cheaper, then, to go through the Canal? Is that what you do? 

Mr. Jokinen. Well, we are not a huge importer. We don't bring in 200 containers a year like some 

furniture manufacturers do. Our contracts are more lucrative for the shippers, and we just have to 

rely on the best time frame to get them. I don't know how many of them use the Panama Canal, 

honestly.

Mr. Ballenger. But you are shipping across the Pacific to East Coast ports? 

Mr. Jokinen. We are. 

Mr. Ballenger. Ms. Lavriha if your organization would look at it very seriously for some certainty 

in delivery, it might make some sense on your part to do what Mr. Jokinen is doing and pay a little 

bit more to use a port on the East Coast that has many union contracts so that you would have a 

variation in possibilities of delivery. In case you had a strike at New Orleans, you could come into 

Charleston. With a truck in Charleston, you could come into Baltimore. Does that make sense? 

Ms. Lavriha. It certainly makes sense, and as we were preparing for this inevitability, we did 

move some things to the East Coast ports. Right now, though, with the length and time that the 

West Coast has slowed down, the East Coast ports have refused any further shipments. So in a 

sense, we really have no place to go. 

Mr. Ballenger. You say they are full? 

Ms. Lavriha. They are absolutely full, and they are moving as fast as they can to empty the 

containers and move them across the country. But you have to understand with L.A. and Long 

Beach and the West Coast ports, that is a lot of containers that move through there. So it has been 

very, very challenging to find a place to take the containers that we have. 

Mr. Ballenger. Mr. Vekich, you said PMA is foreign owned. Who are they? Are they Chinese? 

Who are they? 

Mr. Vekich. There are 83 or 84 members of the Pacific Maritime Association. I believe 7 to 9 are 

U.S. companies, and the rest are foreign; Chinese, Japanese, Korean, and European. 

Mr. Ballenger. It seems to me it would behoove us somehow when you can see a bottleneck 

building, that somewhere along the line if I were an investor or a port manager, if I can't get 

delivery of my product in a pretty solid manner, common sense says the best thing to do is to find 

service somewhere else. Hutchinson I know is buying ports all over the country, and I don't know 

whether they are involved in PMA. They may be. 

I don't know whether the PMA thinks about that or the longshoremen think about that. I 

represent a part of the country loading for textiles, and somewhere along the line we found out that 

if people can buy the product somewhere else, they will do it. I am sure Ms. Lavriha that sadly you 
21

buy a great deal of your products in China, that you used to buy it in the United States. If I were a 

longshoreman, I would start reading the handwriting on the wall. The same thing could happen to 

you that has happened to our textile industry. 

Mr. Vekich. Mr. Ballenger, unfortunately for trade in this country even when this dispute is 

solved, and I am sure it will be favorably solved for both sides, you are still going to have problems 

at the West Coast and East Coast ports. And part of the problem is created by this great idea of 

just-in-time delivery. The warehouse now is the container, and there needs to be more incentive to 

move those containers along. The retailers like to store the containers on the dock, and there isn't a 

big hurry to push them off a lot of times. And that has added to the congestion in our West Coast 

ports.

Mr. Ballenger. Let me say one thing. If Mr. Jokinen thinks very seriously about what is going on, 

I might even be for your strike. You could generate new business in the furniture industry in North 

Carolina where you wouldn't have to buy anything overseas, and think of all the textile industries 

that we could rebuild in North and South Carolina. If you just stay out on strike a little bit longer, 

you might regenerate the jobs that we have lost. 

 Thank you, Mr. Chairman. 

Chairman Johnson. We are going to strike more and more cotton in Texas, too. 

 The Chair recognizes Mr. Andrews. Do you care to question? 

Mr. Andrews. I do. I want to thank Mr. Kildee for his indulgence in attending the first part of this 

hearing. I know he has left now. I was involved with the matter that is on the floor with respect to 

the situation in Iraq. I also thank the Chairman, Mr. Johnson, for his indulgence, and I apologize to 

the witnesses for not being here to hear their testimony. 

Mr. Vekich, are your members on strike? 

Mr. Vekich. We are locked out, Mr. Andrews. 

Mr. Andrews. And it is my understanding that the amount of cargo that your members handle 

went up rather significantly in the 3 months prior to September the 1st. Is that right? 

Mr. Vekich. That's right. Actually from January on, in each region of the West Coast, there are 

increasing volumes every month. 

Mr. Andrews. And when did negotiations begin on this agreement that is in dispute, or this 

possible agreement that is in dispute? 

Mr. Vekich. May 16th. 

Mr. Andrews. So negotiations began on May the 16th. Between May 16 and September the 1st, 

did your members handle more cargo or less cargo than they had in a similar period of time last 
22

year?

Mr. Vekich. My understanding is more cargo. 

Mr. Andrews. Now, what happened on the 1st of September? 

Mr. Vekich. On the 1st of September, we had continued to negotiate. We raised the issue about 

safety concerns with the employers. We were on 1-day extensions from July 1st, and on

September 1st it wasn't getting anywhere. We thought we would be 1-day extensions into infinity, 

and it was time to give attention to this issue. Five of our members have been killed on the job. It 

was time to reinstitute our safety program and stop pressure because of the contract situation, and 

go back to the normal way of enforcing safety regulations on the docks. That is what happened. 

Mr. Andrews. Did your members stop handling cargo on September 1st?

Mr. Vekich. Not at all. 

Mr. Andrews. In your opinion, and I realize this would be subject to some dispute, did they 

violate the terms of the agreement that existed in any way? 

Mr. Vekich. Not in my opinion. 

Mr. Andrews. Well, tell me the kinds of things that they did. It has been described by one of the 

witnesses as work to rule. I don't think you used that phrase probably. But tell me some of the 

things that your members changed or insisted on after September the 1st. 

Mr. Vekich. Well, one of the big problems is the speed limit on the docks in the container ports. 

You know, a lot of times it is 15 miles an hour in many places, and 20 in some. But because of the 

volume of traffic, we are encouraged and pressured to drive 40 to 45 miles an hour pulling a 40-

foot container. And the problem with our industry really is everything is so big now. The cargo 

containers are big, the vehicles move fast, the pieces of equipment that move the big cargo 

containers are huge. I mean if there is a mistake, there just isn't a whole lot of room for error. If 

you are hit by something, you are really messed up. 

Mr. Andrews. Now, there is a Federal mediator involved in this dispute; is there not? 

Mr. Vekich. That is right. 

Mr. Andrews. When did the Federal mediator become involved in the discussions? 

Mr. Vekich. My understanding was the Thursday or Friday. He has been monitoring the 

discussions, and he had been on site, and he has had informal talks with the parties before he 

actually entered into mediation. 

Mr. Andrews. So the Thursday or Friday after September 1st? 
23

Mr. Vekich. I will have to get that information to you. I don't know the exact time line. 

Mr. Andrews. Okay. But it has been a few weeks. 

Mr. Vekich. Yes. 

Mr. Andrews. Now, I assume that both sides have met with the mediator and tried to discuss a 

solution to the problem; is that right? And I think you told us in your testimony that the mediator 

proposed a 7-day extension of the existing contract. When did he propose that? 

Mr. Vekich. It was last weekend. 

Mr. Andrews. And did the union accept that proposal? 

Mr. Vekich. Yes. We accepted it without condition. 

Mr. Andrews. So the union agreed that it would work under the terms of the existing contract for 

7 days, I assume continue to meet with the employer and with the mediator during the 7 days, and 

try to work something out. 

Mr. Vekich. That is correct. 

Mr. Andrews. What was the employer's response? 

Mr. Vekich. It was, as I understand, a flat refusal. 

Mr. Andrews. I don't dispute the testimony on the economic consequences that we have heard 

from either of the other witnesses. Clearly the amount of cargo and the importance of the cargo 

that flows through the west coast ports are awfully important to this country's economy. But I 

would put on the record my own concerns about the indication of this extreme Federal remedy to 

interfere in the collective bargaining process where it appears that one of the parties, the union, has 

agreed to keep working during this time, at least for 7 days, and continue the discussion. And I 

would urge the parties involved in the dispute to take another look at that 7-day period. Thank you. 

Chairman Johnson. Thank you. I would hope they could get together as well. 

 The Chair recognizes Mr. McKeon. 

Mr. McKeon. Thank you, Mr. Chairman. 

 I have been a member of a union, and I have been on the other side negotiating with the 

unions, but I have never been in this kind of a situation where it impacts the economy of the Nation 

as a whole. I understand the President's reluctance to invoke Taft-Hartley, but it seems to me the 

pressure is building with the economy. After reading this report I understand that at 4 o'clock today 

he is going to have a news conference and take steps to invoke Taft-Hartley, and I would support 
24

him in that. 

 I think, given the nature of the problem, the poisoning of the atmosphere and so forth, it 

probably is good to have a cooling off period, and I hope that both sides will come together in the 

spirit of trying to work this out for the good of themselves and the country. 

 That is an important part of this meeting, but also we want to focus on the economic impact 

for the retailers and manufacturers that haven't been able to move their products, which we have 

heard could have a $2-billion-a-day impact on our economy. Ms. Lavriha, how long do you think it 

will take to catch up in the retail industry if the injunction is issued and work resumes on the 

docks? 

Ms. Lavriha. For every day that the port is closed, it takes 5 to 7 days to clear up the backlog. We 

are getting precariously close to the holiday season, and we are looking at a number of weeks and 

possibly months to get this port cleared and reorganized to operate at total efficiency. I think what 

Mr. Vekich is saying is the fact that with things backed up there now, we are hearing that 

containers are put in places just to stack them, and that will be a safety issue if things don't reopen. 

Mr. McKeon. Were they taking them off the ships and then just putting them wherever they could 

fit on the dock, or did everything stop? It sounds like you are saying that partly it stopped and 

partly it didn't. 

Ms. Lavriha. There are ships waiting in the harbor to be unloaded. 

Mr. McKeon. I understand that. If everybody gets in line, I don't know why there would be an 

inordinate amount of containers on the docks that are backed up if they stopped everything evenly 

at the same time. 

Ms. Lavriha. They had a slowdown. Nothing was loaded. And so during a slowdown, when you 

went to a 50 percent productivity rate, a lot of things just backed up. 

Mr. McKeon. So if the President orders the Attorney General to go to the court this afternoon, 

when will we begin working again on the docks? 

Mr. Vekich. I am not an attorney. I couldn't tell you how this all plays out. My understanding is 

that hiring halls are staffed, and we have been ready. We have been ready for 11 days to go back to 

work. All they had to do was order gangs. And we loaded military cargo. We have been loading 

Alaska and Hawaii. We have been loading as this has been going on. 

Mr. McKeon. So if he does order this, this afternoon, you could go back to work tomorrow? 

Mr. Vekich. I would think that is possible. 

Mr. McKeon. And if that happened, would you resist that? 
25

Mr. Vekich. We have been trying to be part of the process here, and we want to resolve this 

problem. We want a contract. This is all about a contract. That is what we want, to protect our 

members, to ensure our jobs. 

Mr. McKeon. And I think that would be our position. I think that would be the President's 

position. I think that would be to the benefit of all.

So if you went back to work tomorrow, you could still get a lot of these goods in for 

Christmas. Manufacturing, you are behind on that already. But the retailers, the merchandise that 

is there, the food stuffs and things like that, the perishables, they are going to be gone, but the hard 

goods that are there you could get in time for Christmas. 

 I would think it would be beneficial to all of us if the President would invoke this, if you 

would get back to work tomorrow and let those who were handling the bargaining get back to what 

they are doing and move toward improving the outlook for the holiday season. 

 Before I came to Congress, I was a retailer, and I have been through strikes. We were in the 

western wear business, and I can remember telling people, sorry, we are out of sizes. We can't get 

them for you. And that was before we went to this type of retailing where you have it on the spot, 

you wait and it comes. We had to wait. Our normal delivery was late. This just made it that much 

worse.

 But I hope that you will be able to get this resolved and move quickly back to work. I 

understand both sides feel that they are under a lot of pressure, and it will play out to one or the 

other's advantage. I hope that it will play out to both their advantages and get it resolved for the 

better of the country. Thank you. 

Chairman Johnson. Thank you, Mr. McKeon. 

 Let me insert a question here before we go on. I would like to ask both Ms. Lavriha and 

Mr. Vekich, why it is going to make a difference if the President puts you back to work and you 

start negotiating. Is the negotiating problem with the foreign aspect of that board that controls 

PMA? One. And, two, do you think that we should protect our ports by requiring all American 

participation in running those things?

Ms. Lavriha. Our bottom line is that we want the ports reopened, and we want both parties to 

come back to the negotiating table. We felt that Taft-Hartley was the last resort, and we really 

don't feel that that is where we wanted to be. We just want them both to get back to the table and 

move forward. 

Chairman Johnson. But Taft-Hartley doesn't have any influence on foreign participation. I’d like 

to hear from you, Mr. Vekich. Do you have trouble negotiating because of the foreign input that is 

in that organization? 

Mr. Vekich. It would appear we have trouble in negotiating with all of them. 
26

Chairman Johnson. Okay. That is the answer I was looking for. You don't think it makes a 

difference, in other words? 

Mr. Vekich. You know, I don't think that “black hats” are one nationality or the other. It seems to 

me the difficulty is collective. 

Chairman Johnson. How many people are on that board? 

Mr. Vekich. Ten, twelve. I will tell you, Mr. Chairman, next time I do this I am going to bone up 

on PMA and know a lot more about it. 

Chairman Johnson. We should have had them here. And we may do a follow-up hearing on 

them. 

Mr. Andrews. Mr. Chairman, if the Chairman would just yield, if I could add a follow-up, 

because the Chairman and I had a discussion about this. 

 One of the concerns that I have, any of you can react to this, is that the principle behind 

Taft-Hartley is that everyone at the bargaining table has a stake in the U.S. economy. We all have a 

stake in the U.S. economy, and some extraordinary things sometimes have to be done in the context 

of a labor dispute. If a significant majority of the employer board here is not American firms, their 

stake in the U.S. economy is a little narrower than Taft-Hartley would contemplate. 

 Now, clearly they have an interest in moving the goods through the port to receive whatever 

compensation, but the ripple effect that the rest of us are concerned about, that Ms. Lavriha has 

testified to, is very true. Most domestic employers would have a stake in it because it would be 

their customers and employees and so forth, and that is not the case here. And I do think it merits 

some consideration as to whether Taft-Hartley remedies should be different when the employer on 

the other side of the table is not a domestic employer. 

Chairman Johnson. Mr. Tiberi, do you wish to question? 

Mr. Tiberi. Yes. 

Chairman Johnson. You are recognized for 5 minutes. 

Mr. Tiberi. Yes, Mr. Chairman. 

Mr. Chairman, I would like to submit an article from the October 6th edition of the New 

York Times, “The Union Wins the Global Game” for the record. 

Chairman Johnson. Without objection. Hearing no objection, so ordered. 

Mr. Tiberi. Mr. Vekich, I will read a paragraph from this article, and I would like you to comment 

on it: 
27

“In the past, management has often surrendered to the demands of dock workers, granting 

them fat wages and benefits instead of enduring a strike or a slowdown. This time, officials with 

the PMA, which represents port operators and shipping lines, shut 29 ports last week and locked 

out the workers after complaining that the workers were engaged in a slowdown. The association 

wants the right to introduce new technology to speed cargo handling, while the international 

longshoremen want the remaining jobs to be under its jurisdiction.” 

 Can you comment on that? 

Mr. Vekich. Yes. Right now the Pacific Maritime Association has the right to introduce new 

technology unilaterally. It is in the contract. They have that right under the existing contract. The 

question about some of the jurisdiction areas is what we are trying to work out. And as far as the 

shipping companies giving anything that longshore workers wanted, part of the dynamic on the 

docks is, of all those companies, they compete with each other. So a lot of the benefits that flow to 

one group of workers or another has to do with those companies competing to get the best crane 

operators, the best drivers. So they have been more willing, I think, in that regard to pay more for 

talent, and that has driven some of this dynamic. 

Mr. Tiberi. You mentioned, in answering a question from Mr. Andrews, I believe it was, that it is 

about the contract. Isn't it about jobs outside the longshoremen and many union jobs as well? 

As of yesterday my figures show a tally here of 5,400 American workers that have been laid 

off thus far. In a California newspaper, it says that if the shutdown lasts another week or two, it 

could take more than a month to unsnarl the backlog of idled or ruined goods, a delay that could 

torpedo the holiday sale plans of a variety of retailers; within 3 weeks of a shutdown, it could force 

companies in America to lay off nearly a quarter of a million jobs. 

 Knowing the current workers that are laid off, and the projected layoffs, isn't Taft-Hartley 

the only way to go to save employees' jobs? 

Mr. Vekich. You know, we were locked out, and we regret that those 5,400 people were laid off, 

and it wasn't our call, and we didn't do that. And so we absolutely think that is part of the problem, 

and we think it is a shame that that happened. We think it is a shame that our 10,500 people got 

locked out also. So it looks to me like the PMA is responsible for 15,900 people unemployed right 

now. That is my opinion. 

Mr. Tiberi. If you were President, though, Mr. Vekich, and you were facing not only an economy 

but also goods and services that over the next couple of months were going to be impacted, in 

addition to possibly 250,000 employees around the country many of them your union brothers 

losing their jobs because of this shutdown, what other options are there? 

In front of you today is the board of inquiries report, which Chairman Boehner read. The 

last line reads, “We have no confidence that the parties will resolve the west coast ports dispute 

within a reasonable time.” What other option is there when this three-member board of inquiry 

report is pretty direct, and you have on the other side over 5,000 layoffs so far and maybe another 
28

200,000 in the coming weeks. What other option is there? 

Mr. Vekich. Well, Mr. Tiberi, as far as me being President, I spent eight years in the Washington 

State Legislature, and I got my fill of politics there, and I have no illusions about answering 

difficult problems. And any unemployed worker, any laid-off worker, any worker who is 

underemployed, I think it is a tragedy, and it is a waste of a valuable asset in this country. 

 I am not qualified to comment on the rest of your statement. I see the world from my little 

point of view and from my limited experience. Smarter people than I need to deal with that. 

Mr. Tiberi. Mr. Chairman, can I have 30 more seconds for one last question? 

 Sir, this is something maybe within your purview. If what we have heard today is true, and 

the President is going to ask that Taft-Hartley be invoked, what can we assume or what assurances 

can you give as an official with the union that efficiency levels and worker productivity will 

continue at an adequate level in the next 80 days? 

Mr. Vekich. My feeling is a lot of my brothers and sisters want to get back to work. They don't 

like it. When there have been beefs on the jobs, unofficially I will tell you, it is hard to get our 

people to slow down, really. It really is. They have a work ethic that is, I think, unsurpassed. And 

I think that we want a contract, and our workers want to be treated with respect. And that is the 

bottom line. And I think we would like to see negotiations resume, and hopefully we can get a deal 

before this 80 days expires. That is my hope. 

Mr. Tiberi. Thank you. 

Chairman Johnson. Thank you. I think we have discussed this as much as we can at this point, 

and I have no further requests for questions for this panel. 

 I just want to thank you all so much for answering, and frankly I hope that we have 

increased your understanding of what the United States Congress does. We are not here to chastise 

anybody. We are interested in getting the facts and seeing if there is any reason for us to try to 

legislate differently than we have. And, you know, the point of turning our ports over to a foreign 

authority is something we may look into. I appreciate your comments, all three of you. Thank you 

so much for being with us today. 

 Will the second panel please take their seats? Thank you for joining us today. I know that 

you heard me talk about the timer lights, so I presume you are familiar with the green, yellow, and 

red.

 The first witness on the second panel is the Honorable Charles Cohen. He is a Senior 

Partner at Morgan, Lewis & Bockius. Mr. Cohen is testifying on behalf of the United States 

Chamber of Commerce. Our next witness is Dr. Herbert Northrup. He is Professor Emeritus of 

Management at the Wharton School of the University of Pennsylvania. The next witness is Ms. 

Kathy Krieger. She is the Associate General Counsel for the AFL-CIO. And our final witness 
29

today is Mr. Thomas Fairley. He is President and CEO of TRICO Marine Services, Incorporated. 

 Mr. Cohen, you may begin your testimony now. 

STATEMENT OF CHARLES I. COHEN, SENIOR PARTNER, MORGAN, 

LEWIS & BOCKIUS LLP, WASHINGTON, D.C., TESTIFYING ON BEHALF 

OF THE U.S. CHAMBER OF COMMERCE 

Chairman Johnson and Members of the Committee, I am pleased and honored to be here 

today. Thank you for your kind invitation. 

 By way of introduction, I was appointed by President Clinton and served as a member of 

the National Labor Relations Board from March 1994 until my term expired in August 1996. 

Before becoming a member of the Board, I worked for the NLRB in various capacities from 1971 

to 1979, and as a labor lawyer representing management in private practice from 1979 to 1994. 

Since leaving the Board in 1996, I have returned to private practice and am a Senior Partner in the 

law firm of Morgan, Lewis & Bockius LLP. I am a member of the Labor Relations Committee of 

the U.S. Chamber of Commerce and Chair of its NLRB Subcommittee, and am testifying today on 

behalf of the U.S. Chamber of Commerce. 

 The National Labor Relations Act was enacted in 1935 and has been substantially amended 

only twice, once in 1947 and once in 1959. Nonetheless, the Act continues to strike the balance in 

labor relations that its drafters intended. The Act guarantees important rights to employees, 

employers, and unions. The fundamental precept in industrial democracy is premised on a majority 

of employees in a collective bargaining unit freely selecting a union as their bargaining 

representative. Because all employees in that unit are bound by the decision of the majority, it is 

especially important that the employees are informed about the possible consequences of their 

choice, and that their right not to be represented by a union be respected. Once a union is duly 

designated, the Act provides a framework for both sides to work out, through collective bargaining, 

the terms and conditions applicable to employees and collective bargaining units. 

 Recent times, however, have seen a remarkable shift caused in the labor relations landscape, 

a shift caused in large part by the need for U.S. corporations to remain competitive in a global 

economy. Although unions remain strong in many traditionally unionized industries, union density 

has decreased precipitously to the point where only about 9 percent of the American private sector 

workforce is represented by a union. Union leadership has been unable to combat this trend 

through traditional methods, namely, union organizing campaigns and NLRB secret ballot 

elections. Therefore, union leadership has turned to two other approaches. 

 The first approach unions have taken to combat their decreased density in American 

industry is the use of corporate campaigns as a way of obtaining and then exerting their influence 

over employees and over management. The corporate campaign is an alternative approach to the 

traditional forms of expression by unions representing employees or by unions seeking recognition, 
30

namely, collective bargaining, picketing, and strike activity. Corporate campaigns take many 

forms, but typically involve unions' attempts to enlist the media and public interest groups to 

influence public opinion and to rally support for union organizing and other union causes.

Corporate campaigns often attempt to have the target company and its officials portrayed as villains 

by investors, customers, vendors, employees, and the public at large. 

 The second approach used by unions to stem the tide of their declining membership is the 

use of a so-called bargaining to organize strategy, resulting in neutrality agreements and especially 

card check recognition agreements. The term “neutrality agreement” is an umbrella term, and like 

corporate campaigns generally represents the national labor movement's attempt to jumpstart union 

organizing by having one-sided organizing campaigns and eliminating secret ballot NLRB 

elections.

 Neutrality agreements contain built-in provisions designed to ensure union success in 

organizing, including automatic recognition of the union based on authorization card designations 

as well as requirements that the neutrality provisions apply to corporate affiliates of the company 

that actually enters into the neutrality agreements. 

 To the extent unions are successful in getting neutrality clauses and card check agreements, 

the NRLB is almost entirely removed from the process. The consequences to the labor relations 

process, however, can be startling. Free choice by employees with respect to union representation 

is a basic tenet of labor laws. Corporate campaigns conducted with the aim of securing neutrality 

agreements, card check agreements, or other procedural concessions from the employer with the 

ultimate goal of obtaining representation status without a fully informed electorate and without a 

secret ballot election, in fact, undermine the right of free choice. 

 Particularly troublesome is the TRICO Marine situation about which you will hear much. 

We see there the three legs of the stool of avoiding our established procedures for accepting or 

ejecting union representation: One, a corporate campaign; two, pressure to accept the neutrality 

agreement and card check recognition; and, three, international pressure, including a lawsuit in a 

Norwegian court to permit a crippling of TRICO's international operations. Indeed, I intend to 

testify next month in a Norwegian court on behalf of TRICO Marine to explain to the Norwegian 

court our finely balanced labor laws as that court considers whether a boycott of TRICO Marine 

should be sanctioned in Norway because of TRICO's actions in Louisiana. Thank you. 

WRITTEN STATEMENT OF CHARLES I. COHEN, SENIOR PARTNER, 

MORGAN, LEWIS & BOCKIUS LLP, WASHINGTON, D.C., TESTIFYING ON 

BEHALF OF THE U.S. CHAMBER OF COMMERCE – SEE APPENDIX E 

Chairman Johnson. Thank you, sir. 

Dr. Northrup, would you care to testify? 
31

STATEMENT OF DR. HERBERT R. NORTHRUP, PROFESSOR 

EMERITUS OF MANAGEMENT, WHARTON SCHOOL OF THE 

UNIVERSITY OF PENNSYLVANIA, HAVERFORD, PA

Let me start off talking about this question of international corporate campaigns. They are 

not really new. They are much more effective now than they have ever been, but there are 

organizations that used to be called international trade union secretariats, which are now called 

global union federations, which affiliate unions in their field around the country. I have provided a 

list of the important ones to the Committee. They act as coordinators and bring together the 

various unions from around the world to talk about “common problems” and things like that so that 

the various unions in the AFL-CIO, for example, know the people in these other unions. 

 Now, American employers have also been affected by multinational government 

organizations, including the International Labor Organization and the Organization of Economic 

and Cooperation Development, OECD, which have passed what amount to be statements claiming 

how industrial relations should be maintained and so forth. The ILO also issues a number of what 

they call conventions, which are tripartite majority agreements on things in a particular area or 

industry. They have to be approved by the Senate before they become effective in the United 

States, but, as you know, if the Senate approves them, they become law in the United States and 

substitute for any laws that exist in that area. 

 The United States has not approved a number of them for a very significant reason, and that 

is we don't agree with some of these conventions which protect the right of supervisors and 

management people to unionize, and we don't agree with the requirements that public employees 

should have the right to strike, and so this has blocked our approval of them. As a result of this, the 

Norwegians, at the AFof L-CIO instigation, are now saying that our laws are inadequate, and 

therefore they should substitute their laws and boycott a company like TRICO, which has not 

violated any law over here, and which the unions have failed to organize and can't even get enough 

cards to hold an election, 30 percent. I am not an authority on the TRICO situation, I know those 

few salient facts, that is all, but you will undoubtedly hear more about it. 

 At the same time this is occurring, the unions are using laws including one passed, I don't 

know, a couple of hundred years ago, which pertain to slavery elsewhere to sue unions because of 

the misbehavior in some countries, particularly in Myanmar, which used to be called Burma, and 

which is misbehaving, there is no question about that. The question is what will it do, for example, 

if UNACOL is forced to give up its operations there? And the answer, I think, is: Little good. 

First of all, it could deprive people over there of much better work and working conditions 

than they have elsewhere. And, second, knowing Japan and European countries, particularly like 

Germany or France, they will be delighted to have the work. And all this because we don't agree 

we should approve a convention that alters our labor law without any vote of the Congress or the 

people of the United States. 

 You must understand that these international labor organizations by and large do not have 

members as such. They have affiliations like American unions that have members. But nobody 

gave them a blanket instrument to say to the world, like apparently in their great estimation: And 
32

this is what we have coming in Norway. 

 So you have this double whammy going. On the one hand the claim is made that our unions 

are aiding and abetting, misbehaving, and some seriously misbehaving governments, but maybe 

some that aren't really misbehaving; and second of all, that our labor laws are inadequate so that we 

can't be trusted to deal abroad. And, of course, there are a lot of people over there in Europe that 

would be delighted not to have American competition. 

 And, finally, the research on these conventions and what good they do and what actions like 

that do don’t find any substantial benefit resulting just from them, and there is a good summary of 

those in an OECD publication which I will submit later for the record. 

 In closing, I want to apologize for not having a paper ready, but I couldn't get assurance 

until last week that you were going to hold the hearing. And, really, I haven't time to put together a 

paper that isn't going to be used in a hearing that wasn't held, so I sat on it until I finally got word, 

and here I am. 

WRITTEN STATEMENT OF DR. HERBERT R. NORTHRUP, PROFESSOR 

EMERITUS OF MANAGEMENT, WHARTON SCHOOL OF THE UNIVERSITY 

OF PENNSYLVANIA, HAVERFORD, PA – SEE APPENDIX F 

Chairman Johnson. Thank you for your testimony. We appreciate it, Doctor Northrup. 

 Ms. Krieger, you may begin your testimony now. 

STATEMENT OF KATHY L. KRIEGER, ASSOCIATE GENERAL 

COUNSEL, AFL-CIO, WASHINGTON, D.C.

Good afternoon. And thank you, Mr. Chairman, Members of the Committee and staff. As 

you know, I am Kathy Krieger, and I am a member of a law firm based here in D.C., a labor and 

litigation law firm, James & Hoffman, and as part of my work there, I represent the AFL-CIO. 

And I am one of their associate general counsels, and it is in that capacity that I am appearing this 

afternoon.

 I don't claim to be an expert on international law or the types of conventions that Professor 

Northrup has raised, but I am going to try to share, I guess, my perspective on why I don't think 

there is an issue of concern to this Committee and what has been happening either with TRICO or 

with any of the other international solidarity campaigns that are going on all the time. 
33

 My written testimony lays out in detail, I think, the points that I would like to make here, 

and I would just like to shortcut it for the panel. I want to start with the point that I totally agree 

with Dr. Northrup. There is absolutely nothing new about international solidarity, global alliances, 

communications, and solidarity actions among labor and other organizations all around the world.

And he is correct that the acceleration of technology, the information age, has perhaps made 

communication faster. 

 When you go back and look at the archives of union conventions in the 19th century and the 

turn of the century, people were coming over on slow boats to meet with each other at union 

conferences and meetings. They were sending telegrams. Now we have Websites where all the 

major labor organizations in the world can post on a day-to-day bulletin board news of what is 

happening in every country, their positions on all the issues. There is a one-stop information 

clearinghouse, if you will, at your fingertips for anybody who can use the information technology. 

 And I guess I would respectfully disagree with Dr. Northrup that anybody has to be 

instigated by anybody else to take solidarity action. All you have to do is look at facts, look at 

opinions, look at what is circulating as information, and then make up your own mind. 

 What has been happening with the TRICO situation, I think Mr. Fairley will probably speak 

on it in detail, and I don't want to get into who did what to whom in details today, but there is 

litigation going on, and more importantly, I guess there are discussions and disputes in the court of 

public opinion around the world. 

 One of the laws that unions certainly do use along with their allies around the world that is a 

couple of hundred years old is the first amendment, and the first amendment happens to protect, in 

our country at least, the ability to criticize, to bring truthful information, to express opinions, to 

communicate with your allies. It also protects the freedom of association; that is, the freedom not 

just of individual employees to get together, but also of their organizations to talk to other 

organizations, to work together on common policies and programs. And it also protects the right to 

petition our government. 

 Now, there are many ways in which United States standards are the acme, if you will, of 

responsibility and fairness. And we have always done our best, I think, both politically, 

economically, and as a labor movement to try to promote best practices around the world. 

 It is an everyday occurrence that the conduct of actors all around the world, including 

corporations who do business here and globally, is held up to judgment in our court of public 

opinion and before our members and is found wanting. And we come to the aid of brothers and 

sisters around the world in solidarity support, whether it is for human rights purposes, whether it is 

to promote democratic political change as in South Africa and Poland, or whether it is to work on 

common interests that affect all of us in a global economy. 

 What is happening at TRICO is the flip side of that situation. That is, a corporation that 

does business in the United States and that does business abroad is being held up in the court of 

public opinion, if you will, in other countries and by the likes of the union members in those 

countries and the organizations who are used to a type of labor relations that is much different from 
34

the United States adversarial model, is found wanting in its behavior. And I will get into detail in 

just a minute as to how this played out, but what you had was not any kind of high-tech corporate 

campaign, but a very old-fashioned fact-finding mission whereby the mariners union that is 

organizing the Gulf of Mexico invited its counterparts from various countries of the world to come 

to south Louisiana and to witness for themselves the conditions under which the mariners worked 

and the obstacles that they faced in trying to organize. Then they took what they saw and what they 

viewed and what they recorded on videotape, back to their own forums to decide in good faith what 

they wanted to do in the way of protests, aid, and assistance to their U.S. mariner counterparts. 

 Now, that is nothing new. The only thing different in this situation is perhaps that we are 

on the other end of the stick. Our laws perhaps and our practices are being held up and found 

deficient by the standards of union members in other countries. 

 Is there a reason why that is the case? One of them Professor Northrup mentioned is that, 

for example, supervisors under the National Labor Relations Act do not enjoy the protection of the 

labor laws. It is not illegal for them to organize, it is not illegal for them to associate and seek to 

get collective bargaining representation, but they are not protected from retaliation by employers 

when they do. 

 One of the issues that is front and center in this campaign is that boat captains working for 

many of the companies doing business in the Gulf of Mexico have been the most eager to get 

together and organize unions, but they are not protected from retaliation, coercion, discriminatory 

discharge when they do. They are among the 32 million workers that the GAO in a recent 

September 2002 report estimates do not enjoy the protection of the U.S. labor laws. Approximately 

8.6 million, the GAO report estimated, are frontline supervisors, not people with management 

responsibilities in the company, but people who are the direct frontline working supervisors. 

 So, here we have a situation where a good number of people would like to organize. They 

are not protected from retaliation by U.S. law when they try to organize. Their counterparts all 

around the world enjoy decent collective bargaining representation and cooperative labor relations 

with the same employers who operate nonunion in the Gulf and who would deny those rights to the 

workers in the Gulf. And so the foreign unions are saying, what is good enough for us is good 

enough for our brothers and sisters in the United States, and we have the right to express our 

opinion and to take action if we feel that justice is not being done to these workers.

Thank you. 

WRITTEN STATEMENT OF KATHY L. KRIEGER, ASSOCIATE GENERAL 

COUNSEL, AFL-CIO, WASHINGTON, D.C. – SEE APPENDIX F 

Chairman Johnson. Thank you. I appreciate your testimony. 

Mr. Fairley, can you elaborate on your situation? 
35

STATEMENT OF THOMAS E. FAIRLEY, PRESIDENT AND CEO, TRICO 

MARINE SERVICES, INC., HOUMA, LOUISIANA 

Thank you, Chairman Johnson and the rest of the distinguished Members of the 

Subcommittee. 

 My name is Thomas Fairley. I am the President and Chief Executive Officer and one of the 

founders of TRICO Marine. TRICO is an offshore service vessel company that services the oil and 

gas industry on a global basis. Our principal offices are in Houston, Texas, and Houma, Louisiana. 

 My personal history is that I began work on a vessel of the type that we operate today. I 

worked my way up through the ranks to the level of captain in the Gulf of Mexico as well as South 

America and East Africa. Through good fortune and opportunity, I was able to form a boat 

company with my colleague Ron Palmer in 1980, and we called that company TRICO. 

 For almost 2-1/2 years, TRICO and its employees have been the subject of a harassing and 

propaganda-based corporate campaign to organize TRICO's U.S. employees. A federation of U.S. 

maritime unions called the Offshore Mariners United, or OMU, which is supported by the AFLCIO Center for Strategic Research, Department of Corporate Affairs, spearheads it. This 

campaign, which is essentially a membership drive, is directed at the approximately 70 offshore 

vessel companies operating in the Gulf of Mexico which serve the oil and gas industry. There are 

different types of boat companies here. That may be important later on. 

 TRICO Marine has become the target company for this campaign. After 29 months, neither 

TRICO employees nor the employees of any other vessel company in the Gulf of Mexico has 

chosen to be represented by the OMU, nor has the National Labor Relations Board petition for a 

secret ballot election been filed by the OMU, not one, a process that requires only 30 percent of a 

company's employees. 

 Throughout this campaign, TRICO has honored our Nation's laws. In the past 29 months, 

TRICO has received one unfair labor practice charge, which was discharged by the NLRB. I am 

also proud to say that TRICO has a very good wage and benefit program for its employees. 

Through 2001, vessel personnel averaged wage increases of 20 percent per year for the last 5 years.

What makes this campaign against TRICO unusual is that after the failure to persuade TRICO's 

U.S. employees to enlist, the OMU has recruited international unions to continue the attack on 

TRICO's operations and customers throughout the world, including Singapore, Brazil, Trinidad, 

Nigeria, the U.K., and particularly in Norway. 

 On October the 18th of 2001, the Norwegian Oil and Petrochemical Workers Union 

(NOPEF), a union which we are not associated with or have any collective bargaining agreements 

with whatsoever, filed a lawsuit under a Norwegian boycott statute against TRICO Supply ASA, 

which is our Norwegian subsidiary. This union represents the dock and platform rig workers in the 

North Sea. Three maritime unions represent TRICO Supply’s employees. Our own employees' 
36

unions have protested this boycott, but to no avail. This case is filed in the small town of Volda, 

Norway, and a 3-week trial is scheduled to begin on November the 4th. NOPEF seeks court preapproval of an announced boycott against TRICO Supply's vessels that are operating in the North 

Sea. The only issue at trial will be TRICO's conduct here in the U.S. during this campaign. 

 The U.S. unions are trying to accomplish in Norway something that they could not legally 

do in the U.S., a secondary boycott. 

 Principal to TRICO's defense in Norway is the fact that it has observed and honored U.S. 

Labor laws. In response, NOPEF has launched an attack in their pleadings against the National 

Labor Relations Act. NOPEF is asking the court in Volda to rule that TRICO's compliance with 

U.S. law does not offer a defense to the boycott since the U.S. labor law does not adequately 

protect U.S. citizens. The AFL-CIO is providing a witness to support this point. 

 NOPEF is contending that U.S. labor law is defective by the standards of the International 

Labor Organization Conventions 87 and 98, which are not ratified by the U.S. These deal with the 

right to organize and the freedom of association. NOPEF also contends that U.S. labor law does 

not meet European humanistic standards. Of particular interest to this Committee, I would think, is 

that NOPEF in its pleading has argued that the National Labor Relations Act is less protective of 

workers' rights than the labor laws of Afghanistan, Burma, and the banana republics which have 

ratified these two conventions. 

 An adverse ruling would become precedent in Norway. Any U.S. company operating in 

Norway but involved in a domestic or international labor dispute or a membership drive could be 

boycotted even when in compliance with U.S. labor law without a pretrial determination. Since the 

vast majority of U.S. corporations operating in the offshore oil and gas industry in both the Gulf of 

Mexico and the North Sea are nonunion in their Gulf operations, a successful boycott against 

TRICO will likely spawn more boycotts against U.S. companies that operate in both locations. 

 I have been told that an adverse ruling against TRICO might be used in context beyond the 

labor field. For example, the European Union might seek to use the case to argue that the United 

States environmental laws are deficient because the U.S. Government does not ratify the Kyoto 

Convention; therefore, the EU has the right to impose countervailing duties on U.S. products to 

level the playing field for EU companies that might pay higher prices for products like oil that 

contribute to greenhouse gas emissions. 

 TRICO alone is shouldering the responsibility of defending our Nation's labor laws. We 

have sought the assistance of the U.S. State Department to defend U.S. Labor law, but have been 

told that the United States Government is not prepared to intervene in the case at this stage. 

 Our best hope to end the Norwegian legal proceeding, and the boycott threat lies here in the 

U.S. before the NLRB. In July and August of 2001, TRICO filed an unfair labor practice charge 

against the U.S. unions, alleging an illegal secondary boycott under U.S. law for their open and 

active roles in the U.S. and Norway in organizing and implementing the current boycott created in 

Norway. I am told there is strong evidence and legal precedence to support action by the general 

counsel. At this time the charges are still pending before him. We believe that action by the 
37

NLRB and the U.S. would lead to an end to the Norwegian boycott case against TRICO. 

 Thank you very much. I would be pleased to answer any questions. 

WRITTEN STATEMENT OF THOMAS E. FAIRLEY, PRESIDENT AND CEO, 

TRICO MARINE SERVICES, INC., HOUMA, LA – SEE APPENDIX G 

Chairman Johnson. Thank you, sir. We appreciate your testimony. 

 Mr. Cohen, Ms. Krieger argued there is nothing new about union solidarity, implying 

TRICO's situation is common. Would you agree or disagree with that? 

Mr. Cohen. I would not ultimately agree. There is nothing new about union solidarity. And Ms. 

Krieger talked about the court of public opinion. That, I submit, is a different court than the 

Norwegian court where the lawsuit has been instituted to basically put on trial the U.S. labor laws 

and whether they adequately defend workers' rights. That is something that in my years of practice 

and experience I have never heard of. 

Chairman Johnson. Well, we have a strong States rights viewpoint here in this country, and 

wouldn't you be abrogating the State authority to some degree if you took a foreign court into 

view? 

Mr. Cohen. I think that is right, both from the States rights perspective as well as the Federal 

perspective. We, of course, have right-to-work laws in our country which permit individuals to not 

financially support a labor organization, and there is no way of knowing whether the Norwegian 

court could attack that States rights issue itself as part of a determination that the U.S. labor laws do 

not measure up. 

Chairman Johnson. Dr. Northrup, do you want to comment? 

Dr. Northrup. Yes. I disagree that this is nothing new.

The solidarity business is something that existed, but it was mainly leafleting and issuing 

statements and claiming big action when action couldn't be found. In fact, I started in the very 

early 1970s to study the international labor situation because I was working with a chemical 

company. The head of the international chemical and energy company claimed his work had caused 

the company to settle a dispute. Well to start with, the company had never heard of him before, 

which was a problem for many of these multinational companies during this period. And second of 

all, the dispute wasn't settled according to the union's demands at all. And I figured that something 

was goofy and yet a lot of writers in this company had just copied the union propaganda without 

talking to the employer and issued articles and things that sought to support these claims when they 

were nonsense. 
38

 But actions like the Norway union is taking is a new turn in events that is quite different and 

quite serious, and it determines whether an American company can live up to American laws and 

be charged with a boycott because “American laws are inadequate”. I mean, who the devil are they 

to tell us our laws are inadequate? That is a pretty serious thing. 

Chairman Johnson. No kidding. I totally agree with you on that. 

 Can you tell me also why both of you think the TRICO case might signal more international 

boycotts?

Dr. Northrup. Well, if the Norway unions get away with this, it will encourage others to do the 

same. And here you have a case in which the unions have failed to unionize the company. Section 

7 of the National Labor Relations Act emphasizes that employees have the right to join unions 

without discrimination of any kind, or to refrain there from, and these employees are exercising 

that right. And here we have some organization that has no authority and no real claim to speak, 

and it says, these poor workers aren't unionized, and it is because American laws are inadequate. 

Really, that is quite a stretch. And you must realize that the International Labor 

Organization is European-dominated to start with. We weren't in that for many years. 

Chairman Johnson. It used to be synonymous with Communism, too. When I was in Vietnam 

that is all I heard. 

Dr. Northrup. Now, they did admit the Russians, finally, when they were still under the Stalin 

bloc, and you had a tripartite organization. Where the unions are really part of the State apparatus, 

you don't have a tripartite organization, period. But if you will study what countries validate and 

agree to these conventions, you will find that many of them have no desire, wish, or whatnot to live 

up to them, like Arab countries. 

 Now, we have a different attitude toward unions. In Europe, in most countries, a union is 

good per se. Over here, we say unions are fine if employees want them. And we provide election 

machinery by secret ballot, and the Board has done a good job of making sure the ballots are secret 

and so forth by and large. The Clinton board had to be reminded a few times by the circuit courts, 

but by and large you have to say they have done a good job on that, and that is what the law says. 

Chairman Johnson. Thank you, sir. 

 Do you have a quick comment? 

Mr. Cohen. Yes, just very quickly. I think Dr. Northrup had it exactly correct; that if this effort is 

successful, it will encourage more of this kind of situation, and could easily expand to 

environmental and other aspects of our law which would be under scrutiny there, and indeed under 

our law. And that is why I spent a little bit of time in my opening statement on this notion that a 

majority of the workforce wanting the union expressed through a secret ballot election is so 

important. This is an alternative end run to that procedure. 
39

Chairman Johnson. Thank you. 

Mr. Andrews, do you care to comment? 

I will give you a chance, Ms. Krieger. 

Mr. Andrews. I will. 

 First of all, I am sure that the labor history that Ms. Krieger has talked about is substantially 

totally different from that of Stalinist Russia. She was referring to an entirely different historical 

dynamic. I want the record to reflect that. 

 I know there are a lot of passions involved in the TRICO case. It is obviously something 

people feel very, very strongly about. My experience has taught me that to extrapolate from the 

specific to the general and make new law based upon those specific cases is usually a mistake, and 

I offer no opinion as to who is right or who is wrong in the TRICO case. That is not my function. I 

would note for the record that it is the function of the National Labor Relations Board, and I 

assume it will offer its opinion. 

 If I understand, Mr. Fairley testified that there are two complaints that are pending before 

the Board now, and I assume they will be resolved one way or the other. Is that right, Mr. Fairley? 

Mr. Fairley. One. 

Mr. Andrews. There is one. 

Mr. Fairley. I am sorry. One has been resolved. That was an access charge, which the Board 

gave the OMU the choice of withdrawing, or they were going to rule against them. 

Mr. Andrews. Okay. So that was resolved. And then there is a second one that is pending right 

now.

Mr. Fairley. That is correct. 

Mr. Andrews. And who initiated that? 

Mr. Fairley. That was initiated by TRICO. 

Mr. Andrews. Okay. So that is your complaint that is pending. 

 The other thing I would note is that to the extent that there is something wrong or unfair 

about what is going on in Norway, you feel strongly that there is; I am sure others think that there 

isn't. That is a statute that the Government in Norway has enacted. And if they have enacted a 

labor law that is unduly broad or unfair, we have some international treaty considerations we ought 

to make, but I am not sure of the exact connection to our own labor law. 
40

 Which leads me to the point I have for Mr. Cohen, because you do talk more generically 

about corporate campaigns and the problems that they raise. I read your testimony, and with the 

exception of the bottom of page 2 and top of page 3, I can't find any description that you give us 

about what happens in corporate campaigns other than this: 

 “Corporate campaigns take many forms, but typically involve unions' attempts to enlist the 

media and public interest groups to influence public opinion and rally support for union organizing 

and other union causes. Corporate campaigns often attempt to have the target company and its 

officials portrayed as villains by investors, customers, vendors, employees, and the public at large.” 

 I don't read anything in those statements that isn't an exercise of people's first amendment 

rights, and to the extent that there is something that crosses the line and is false, there is a whole 

body of tort law and defamation that would seem to me to cover that. I mean, what needs to be 

changed in the labor law to address that problem? 

Mr. Cohen. Thank you, Mr. Andrews. 

 Much of what goes on in corporate campaigns does indeed rise to the level of protections 

under the first amendment, but a couple of things are quite important. One, we are here in part, I 

believe, to acquaint the Congress with what I regard as a sea change in labor relations, and the fact 

that the use of corporate campaigns has increased so dramatically represents that change. 

 Second, certain aspects of corporate campaigns can indeed spill over and be unlawful under 

the secondary boycott laws, under recognition picketing laws, and things of that kind. 

Mr. Andrews. But if I may, don't those laws already prohibit that kind of conduct? 

Mr. Cohen. They prohibit certain conduct that is right. But as to defamation matters, the Supreme 

Court has basically said defamation doesn't exist in labor disputes. They have been very, very 

restrictive in applying the New York Times v. Sullivan standard. 

Mr. Andrews. Well, with all due respect, I think that is an overstatement of what the Court has 

said. I think that what they have said is when there are issues in motivation that take place in the 

context of a labor dispute, they might be viewed differently than in other commercial contexts. 

 Let me ask you another question. Can you analytically identify for me conduct that is not 

protected by the first amendment and not prohibited by existing labor laws that you think has taken 

place in corporate campaigns that needs to be addressed by a new statute? Give me some 

examples. 

Mr. Cohen. Well, again, I am not here today to say that Congress needs to pass a statute. What I 

am here to say is that there is a great deal of pressure which is being placed on companies. Rather 

than organizing the employees the so-called good old-fashioned way, and convincing them that 

they wish to be represented by a union, and having a secret ballot election to make that 

determination, instead we have it from the top down. We have it from the pressure tactic down. I 

think there could be theories that could be espoused, depending on the given circumstances, that 
41

would give rise to a violation, even in the TRICO situation, where it is my understanding there are 

secondary boycott allegations pending before the general counsel. 

Mr. Andrews. Okay. I want to be sure that I understand then. When you say on page 2 that the 

techniques that you describe, which are the corporate campaigns and the neutrality agreement-type 

dynamics, have serious implications for the future of labor relations, and they warrant the attention 

of the U.S. Congress, you were not advocating necessarily that we change the law? 

Mr. Cohen. That is correct. 

Mr. Andrews. Okay. Thanks very much. 

Chairman Johnson. Thank you, Mr. Andrews. 

 The Chair recognizes Mr. DeMint. 

Mr. DeMint. Thank you, Mr. Chairman. 

 I am not an expert at all on labor relations, but I have worked a fair amount on the macro 

level of the economy and trade. And I guess as we discuss who is right and who is wrong on the 

labor management issue here, there is a more global issue that concerns me. 

 Mr. Cohen, I just would like your perspective on this, because I know that our ports have 

become the gateway to our economy. Many manufacturers in this country depend on raw materials, 

and component parts to manufacture what they make, as well as depending on open ports to ship 

their products all around the world. And as we have seen here on the west coast it appears that, 

despite who is right or who is wrong, we have been able to shut down a large part of the economy 

at least short term, and a relatively few number of people have been able to do this. 

 My biggest concern and the alarm I sense in listening to the testimony is that both the port 

management, as well as the union workers have significant offshore interests, and the international 

campaigns, no longer domestically based, can attack a company and shut down our ports. I have 

become seriously concerned, as I have listened to the testimony of a much bigger issue. Are we at 

risk here in this country because of the way we are managing our ports, and the relatively few 

number of people who can close our doors? 

Mr. Cohen. I will be happy to try to express a view on that. It is somewhat of a daunting 

question.

 There is a certain irony here. Multi-employer bargaining under our labor laws occurs as a 

result of consent on the part of the employers to get together and have multi-employer bargaining, 

and consent on the part of the union to have multi-employer bargaining. In my experience, there is 

only one exception to that principle, and it dates back to an NLRB decision in about 1937 involving 

the ports on the west coast. In that particular decision, the NLRB in its wisdom said that even 

though there was not consent, they were forcing all of the employers into the same collective 
42

bargaining unit to deal with the union. 

 And as we look with 65 years of hindsight at that, I see that that is where the consolidation 

of power has come from in terms of one unit and one collective bargaining relationship coast wide.

And I think that is a terribly significant ruling, and I think it may well be the genesis of what could 

well be a problem. 

Mr. DeMint. Thank you. 

 Thank you, Mr. Chairman. 

Chairman Johnson. Mr. Tierney? 

Mr. Tierney. Thank you, Mr. Chairman. 

 In view of the conversation that went back and forth between Dr. Northrup and Mr. 

Andrews where you conclude that there is no particular law that you are advocating be changed or 

instituted, whatever, I am at a little bit of a loss as to what we are doing today other than probably 

covering some ground directly that could have been covered with a written letter or a letter to the 

editor or something. 

 But let me just ask this, Ms. Krieger, just to give you a shot at this. In your opinion, tell us 

whether or not you believe the national labor relations laws are adequately protecting the rights of 

workers today. 

Ms. Krieger. That is a subject for a separate hearing, and counterparts in the Senate began that this 

summer. Some of our mariners went to that hearing to testify actually on what happened when 

they tried to organize. 

 The range of improvements that would be needed, I think, starts with one of the key issues 

that we are talking about here, which is coverage. It is well and good to talk about the protection of 

the National Labor Relations Act and filing for union elections, but when the key employees who 

want to organize don't have the right to file elections and get certified in bargaining, I think it 

behooves employers to complain that the unions haven't come and asked for an election. So 

extending the coverage of the act to low-level supervisors, being less draconian in the way people 

are excluded from statute might well be a major improvement, and it is one of the key issues that I 

think have been identified for years in ILO reports. 

 As a matter of fact, in 1999, the United States itself, when reporting on its progress under 

the ILO conventions and under the more important Declaration of Fundamental Rights, which is 

binding on everybody regardless of whether you signed the convention, the United States endorsed 

that fundamental right of effective collective bargaining and said there are many ways in which our 

laws probably are deficient and could deserve some scrutiny. And I would encourage perhaps this 

Committee at some point to take up the broader issue of improvement in the laws. 
43

 The ability of employers to hold captive-audience meetings, to coerce employees, in effect, 

by saying basically you have no choice but to listen to antiunion propaganda, these are all issues 

that have been debated, I think, for years in all kinds of forums, and again would deserve a hearing 

before one of the committees, certainly one of the subcommittees. 

 Certainly in our experience down in the Gulf, four out of five workers who talked with 

union reps before a broad campaign of coercion and suppression started among the employers were 

eager to join and signed up and said we could really use the benefits of organizing collectively.

And then what happened is that the employers, through their own coalition group, the Offshore 

Mariners Marine Service Association, or OMMSA, brought in a consultant to basically show the 

employers how to make sure that no union would ever get a foothold in the Gulf. They took it on 

themselves to make sure that south Louisiana and the Gulf industries remain union-free. And my 

testimony includes the manifesto, if you will, that: We are taking on the fight to make sure that no 

employer gets unionized and, if they do get unionized, that no employer caves to a collective 

bargaining agreement. 

 All those things are issues, I think, that deserve looking at, because they certainly pose 

major obstacles to the ability of any employee who is covered by the law to effectively exercise his 

or her rights of choice. 

 But again, here at TRICO we are talking particularly about people who don't even have the 

choice under the law if their employer chooses to fire them for union activities or to otherwise 

discriminate against them. And what happened here, again, there was a fact-finding mission. The 

Norwegians, the British mariners, and the Australians came and took their own tour of the south 

Louisiana industry, and what confronted them, I think, just appalled them, because they had an idea 

that America was different in their romanticized view of what democracy and free speech meant. 

 You know, they showed up at the shipyards, and they showed up at the ports to try to just 

talk to mariners, and armed guards met them. Armed policemen met them. They were tailed in 

scenes that are reminiscent of the movie Mississippi Burning. They were followed wherever they 

went by police cars. Nine police cars descended on them and stopped their vans at the side of the 

road, took their passports, detained them for up to an hour, you know, forced them to, in effect, 

suffer a reign of terror just because they had the gall to come down to south Louisiana with some 

union people and try to look around. 

 One of TRICO's own employees from Norway tried to deliver a letter at TRICO 

headquarters and again was met by the same armed force, if you will, turning them away. And this 

was all witnessed. It was filmed. The Norwegian trade unionists found this really something that 

they were startled by. So when they went back, showed the footage, talked to their counterparts, 

the only thing that was novel about their act of protest is that they actually went to court first to get 

a declaratory judgment of permission before they did the boycott. For years, unions who react to 

perceived abuses have just gone out and done the boycotts or the strikes in their own home 

countries under their own laws without asking court permission first. 

 So, I mean, I am not sure what the Committee is asking. Should the Norwegian oil workers 

simply have gone off and done it, as they lawfully can do, without going to court first? Would that 
44

have made my colleagues here on the panel happier? I am not sure. That is the only novel twist. 

By the way, TRICO itself was the first to bring a legal action in the British courts on this same 

subject.

Mr. Tierney. Well, as I mentioned, this panel, as far as I know, doesn't have jurisdiction over 

things in Norway or England or anywhere else, and I was at a bit of a loss as to what we were 

doing here today, except that you have now shed some light on some things that maybe we should 

be doing on this Committee. And maybe if the Chairman has listened carefully, he might think of 

some future hearings about some subjects that may need attention in terms of amendments or 

changes in the law that we would all benefit from today. So thank you for your testimony. 

Chairman Johnson. Thank you, Mr. Tierney. 

 I wonder if you could follow up, Ms. Krieger, and just tell us, what we can do to fix our 

own law, if anything? And why weren't these issues brought up in the United States first? 

Ms. Krieger. Well, they have been brought up in the United States, and they have been the 

subjects of a lot of publicity. I believe that people's oxen were gored perhaps, as I said, by the 

thought that some foreign unions would pass judgment on them as well as being criticized here in 

the United States by American unions. 

 I myself am not certain, you know, as I say, what is so novel about the TRICO situation that 

calls for this investigation, but I do think, again, improving the coverage of the National Labor 

Relations Act, which is under-inclusive, particularly as to the mariners who are trying to organize, 

would be a major step in dealing with some of the ability of employers, as I say, to hold employees 

effectively captive to antiunion propaganda, certainly would be two issues that are front and center 

on the agenda of the U.S. trade union movement. 

Chairman Johnson. Mr. Cohen, would you care to comment? 

Mr. Cohen. I would like to very much, Chairman. 

 In terms of the question about why it wasn't brought up here, it is my experience that while 

unions have often avoided the representation procedures of the National Labor Relations Act, they 

have not at all been shy about filing unfair labor practice charges against employers. I think it 

speaks volumes that a 29-month campaign has given rise to one unfair labor practice charge, which 

was withdrawn after the charging party was told that it was going to be dismissed. So if there is 

egregious bad conduct, certainly we already have laws on the books that would have covered the 

situation, and it hasn't been utilized here. 

 Next, we have heard a lot about the coverage of supervisors, that somehow supervisors need 

this right to engage in union activity. Our laws are premised on supervisors being part of 

management. Under the National Labor Relations Act, the employer is responsible for the conduct 

of all of its supervisors, first level and above, so that if the individuals engage in unfair labor 

practice conduct in connection with unionization, which is quite easy to do, the employer is 

responsible for those actions. So I think our law wisely, as it was amended in 1947, creates a 
45

bright line distinction. I think our laws do not need adjusting there. 

 Lastly, in terms of the so-called captive audience speeches, while I certainly was not there, 

it is my understanding that no employees of TRICO were required to sit in on any antiunion 

messages that were given to them by the employer; that they had the option of opting out. But even 

if captive audience meetings do go forward and employees are required to attend, that is not 

unlawful under our system, and I don't think it should be unlawful under our system. 

 What we are trying to have is a system of industrial democracy that respects the right of 

employees to either engage in union activity or not engage in union activity, and to have neutrality 

agreements which put a gag order on the part of the employer in terms of having only a one-sided 

campaign, I don't think that would be healthy or is healthy at all. 

Chairman Johnson. Thank you, sir. 

Mr. Andrews? 

Mr. Andrews. Mr. Chairman, the only request I have is that earlier in the first panel there was 

some discussion of a board of inquiry report on the west coast dock. We would request a copy of 

that, if that were available. Some of the Members made reference to it. The Minority has not yet 

seen that, and we would ask that we be provided with a copy. Otherwise I thank the witnesses for 

their participation. 

Chairman Johnson. Certainly. 

 Thank you so much for joining us today. We appreciate your testimony and your frankness. 

Thank you. 

 If there is no further business, the Subcommittee stands adjourned. 

Whereupon, at 3:59 p.m., the Subcommittee was adjourned. 
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Table of Indexes 

Chairman Johnson, 1, 4, 5, 7, 10, 12, 13, 14, 15, 17, 19, 21, 23, 25, 26, 28, 30, 32, 34, 37, 38, 39, 

41, 42, 44, 45 

Mr. Andrews, 21, 22, 23, 26, 39, 40, 41, 45 

Mr. Ballenger, 5, 19, 20, 21 

Mr. Boehner, 17, 18, 19 

Mr. Cohen, 37, 38, 40, 41, 44 

Mr. DeMint, 41, 42 

Mr. Fairley, 39 

Mr. Jokinen, 5, 14, 19, 20 

Mr. Kildee, 4, 15, 16, 17 

Mr. McKeon, 23, 24, 25 

Mr. Northrup, 37, 38 

Mr. Tiberi, 26, 27, 28 

Mr. Tierney, 42, 44 

Mr. Vekich, 7, 12, 13, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28 

Ms. Krieger, 42, 44 

Ms. Lavriha, 14, 15, 16, 17, 20, 24, 25