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Judge angry with EGT, port over murky language in lease contract

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EGT grain terminal

The EGT terminal at the Port of Longview.

Legally, the dispute between EGT and the International Longshore and Warehouse Union boils down to a simple question: Does EGT's 30-year lease agreement with the Port of Longview require the company to hire union longshore workers to operate the terminal?

The agreement is not a model of clarity, and it will be up to the federal courts to decide who is right. Friday, U.S. District Judge Ronald Leighton blasted the muddiness of the contract language, saying that both EGT and the port left the labor requirements vague just so they could complete a deal on the $200 million project.

"There's nothing plain about this language in the contract. None. (The port and EGT) wanted to massage an issue to get to an agreement, bring in an economic engine and get jobs, and decide later what they didn't agree to," Leighton said.

He added, "You have confounded me and probably a lot of other people with your efforts to reach this agreement. We'll parse it out and see what we can make of it."

Leighton said he would rule within a week on the critical issue — whether the port's labor agreement with the International Longshore and Warehouse Union applies to EGT. He could also decide to let the matter go to trial before a jury, which is scheduled for next April.

Both sides have hired high-powered Seattle law firms to argue their case: Graham & Dunn for the port, and Corr, Cronin, Michelson, Baumgardner & Preece for EGT.

Through August, the port's attorney's fees in the battle over the labor dispute already had cost the public $305,900.

The legal briefs are veritable histories of negotiations between EGT and the port that started in 2006 and concluded with a lease agreement signed by the company and the Port of Longview Commissioners on June 1, 2010. The history is key to proving intent or, from the port's view, that it was clear throughout that the port never wavered in its demand that EGT hire union dockworkers.

By late last year, trouble was already was brewing. Local 21 of the International Longshore and Warehouse Union told port officials that EGT would not employ Local 21 workers at the $200 million grain terminal. Then, on Jan. 12, EGT filed suit in federal court, asking the court to declare it was under no obligation to hire the union.

The briefs show that the hiring of union longshore labor was contentious from the very start and that EGT never intended to use longshoremen to run the terminal. At times the two sides seemed to talk past one another.

Port officials clearly were sweating out this conflict. They were stuck between their zeal to land a major new tenant on the one hand and their longstanding, historical commitment to union longshore labor on the other. The EGT court brief, for example, reports on a conversation between EGT negotiator Rob Creswell and Port Director Ken O'Hollaren in October 2008.

O'Hollaren, the port's chief negotiator, told Creswell that the port commissioners were "very concerned and nervous about the labor relations as we move forward with our project. ... I told him I understood his situation since all three of his board members are or were involved with unions. However, we are not allowed by law to discuss with any union jurisdictional issues and we will not be doing that."

The briefs also occasionally betray a sense of frustration. "What is it about the word ‘requiring' that EGT doesn't understand?" the port's lawyers lament in their brief.

The fight centers mostly over one short paragraph dubbed "Section 6.3/ Warranty of Labor." It makes reference to the port's labor agreement with the ILWU. The battle here is simple. Does the "warranty" obligate EGT to use the ILWU, as the port contends, and did EGT consent to incorporate the labor agreement into the contract? EGT says it didn't, and therefore the labor agreement is not binding on the company.

The tug of war on this issue continued up to the very week the lease was signed. Eventually the language was worked out. What remains to be decided was whether it is an ironclad agreement obligating EGT to use ILWU labor, or an ambiguous hodgepodge that frustrated Leighton Friday but which may keep EGT off the hook.

To a layman, at least, the language of the contract is anything but definitive. Nevertheless, today we present the relevant portions of it along with summaries of the legal briefs in the dispute. 

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