South Carolina and Georgia Governors Join Forces to Preserve Port Jobs and Operations

Governors McMaster and Kemp Urge U.S. Supreme Court to Rule Against Longshoremen’s Boycott of Port Terminal

Governor Henry McMaster of South Carolina and Governor Brian Kemp of Georgia have filed a brief in support of the S.C. State Ports Authority’s (SCSPA) petition for a writ of certiorari in S.C. State Ports Authority v. National Labor Relations Board. The Governors’ brief urges the U.S. Supreme Court to grant the petition, correct the lower court’s ruling, and end the International Longshoremen’s Association’s (ILA) ongoing “secondary boycott” of SCSPA’s Hugh K. Leatherman Terminal in North Charleston, South Carolina, which threatens to interfere with port-related investments and operations in both South Carolina and Georgia.

On December 16, 2022, the National Labor Relations Board (NLRB) issued a split decision reversing an Administrative Law Judge’s earlier ruling that the ILA’s “secondary boycott” was unlawful. The ILA’s “secondary boycott” has prevented carriers from calling on the Leatherman Terminal unless and until SCSPA gives all lift-equipment work at the facility to ILA members, including the work traditionally and consistently performed by state employees. For decades, both SCSPA and the Georgia Ports Authority (GPA) have used a hybrid labor model, with state employees operating all of the state-owned cranes at the States’ ports. After the Fourth Circuit issued a 2-1 decision earlier this year affirming the NLRB’s decision, on September 25, 2023, SCSPA filed a petition for a writ of certiorari asking the U.S. Supreme Court to review and reverse that ruling.

“The Leatherman Terminal is a state-of-the-art facility and a critical part of South Carolina’s economic-development portfolio and continued competitive advantage,” said Governor Henry McMaster. “I will not stand idly by and allow unions and their unlawful boycotts to hold our State’s resources, jobs, and supply chain hostage as out-of-state labor bosses seek to advance their own interests at the expense of state employees. South Carolinians have worked hard to earn our prosperity, and we must continue to preserve it and enhance it, not bargain it away under threats of labor union boycotts and coercive pressure campaigns. Particularly at a time when the Southeast is leading the nation in both population and job growth, I appreciate Governor Kemp joining me in this fight to maintain and advance our States’ shared interests in protecting our ports and enhancing our regional supply chain.”

“The success of the Georgia Ports Authority speaks for itself, with the ports supporting hundreds of thousands of Georgia jobs and billions of dollars in revenues statewide,” said Governor Brian Kemp. “To continue that momentum, it’s essential the port retains the authority to decide the appropriate operating model that secures long-term performance and benefits the consumer. By taking this action alongside our partners in South Carolina, we aim to support the future prosperity of our ports and the role of GPA in shaping that future.”

“Unless this Court grants SCSPA’s petition and corrects the Fourth Circuit’s mistake, South Carolina will not be able put its $1.5 billion investment to use fully unless it caves to the ILA’s indirect demands, allows the ILA to ‘consum[e] all the jobs at the Leatherman Terminal,’ and abandons the State’s longstanding decisions about how it will operate its ports and how it will guarantee South Carolinians the right to work free from union coercion,” the brief argues.

The brief also notes that, like South Carolina, “Georgia faces the same challenges with its port-expansion plans.” “Absent correction by this Court, the Fourth Circuit’s authorization of indirect union coercion threatens to disrupt similar infrastructure investments and economic-development initiatives in Georgia.” The brief continues, “Permitting unions to threaten and thwart decades of state investment strategies will chill infrastructure maintenance and enhancement, stifle economic development, and disincentivize supply-chain improvements.”

Background:

• In operating the Port of Charleston, SCSPA has for decades used what is known as a hybrid division of labor, utilizing state employees to operate state-owned cranes and lift equipment to load and unload container ships that call at the Port’s terminals, while ILA-represented employees perform the remainder of the longshore work at the Port.
• As the State was close to opening the Leatherman Terminal, the U.S. Maritime Association (USMX), whose members include maritime container carriers, sent SCSPA a letter informing SCSPA that USMX’s collective bargaining agreement with the ILA might prohibit USMX’s members from calling at the Leatherman Terminal because some jobs there were performed by state employees, rather than union members. The ILA demanded that SCSPA give all jobs at the Leatherman Terminal to union members. SCSPA insisted on continuing to use the labor model that SCSPA had successfully employed for 50 years.
• Less than two weeks after the first ship called at the Leatherman Terminal in April 2021, the ILA sued USMX and the shipping line in New Jersey state court for $300 million. Other shipping lines soon began requiring that their ships call at other SCSPA terminals, for fear of also being sued by the ILA.
• SCSPA and the State, along with USMX, filed unfair labor charges with the NLRB, claiming that the lawsuit in New Jersey violated multiple provisions of federal labor law because the ILA was trying to gain, rather than preserve, union jobs and because it sought an unlawful, secondary aim beyond pressuring the other party to the collective bargaining agreement.
• The Administrative Law Judge ruled for SCSPA, ordering the ILA to drop the New Jersey lawsuit, but a divided NLRB panel reversed that decision. The SCSPA appealed the decision to the Fourth Circuit.
• On April 7, 2023, Governor McMaster’s counsel filed an amicus curiae (or “friend of the court”) brief in support of SCSPA.
• On June 6, 2023, the Fourth Circuit heard oral arguments in S.C. State Ports Authority v. NLRB in Baltimore, Maryland.
• On July 28, 2023, the Fourth Circuit issued a 2-1 ruling affirming the NLRB’s decision. The Fourth Circuit’s majority opinion held that the ILA’s actions did not constitute a secondary boycott prohibited by the National Labor Relations Act but instead were allowed by an exception for “work preservation.” The dissenting judge strongly disagreed with the majority’s conclusion, insisting that the ILA could not possibly be preserving any jobs because the ILA had never operated the lift equipment at the Port of Charleston.  Among other things, the dissenting opinion highlighted comments by an ILA officer, who stated that the union wanted “100 percent” of the work at the Leatherman Terminal and that the ILA was “interested in consuming all the jobs.”
• On September 25, 2023, SCSPA petitioned the U.S. Supreme Court for a writ of certiorari.
• Like the SCSPA, GPA has also historically and consistently used a hybrid labor model, with state employees operating all of the state-owned cranes at Georgia’s ports, and Georgia recently announced similar port-expansion plans, which the ILA’s secondary boycott may disrupt unless the U.S. Supreme Court corrects the Fourth Circuit’s decision.
• On October 30, 2023, Governor McMaster’s counsel, joined by Governor Kemp’s counsel, filed an amici curiae (or “friend of the court”) brief on behalf of the Governors in support of SCSPA’s petition.
• Governor McMaster is represented by counsel for the Office of the Governor (Thomas A. Limehouse, Jr., Chief Legal Counsel; Wm. Grayson Lambert, Senior Litigation Counsel; Erica W. Shedd, Deputy Legal Counsel), and Governor Kemp is represented by his Executive Counsel, David B. Dove.

The Governors’ brief is available here.

The U.S. Supreme Court’s docket is available here.