A courtroom of the 3rd US Circuit Court of Appeals in Philadelphia, which was the latest venue where the International Longshoremen’s Association and New York Shipping Association tried to cut the Waterfront Commission of New York Harbor out of their hiring practices.

A federal appeals court has ruled against the International Longshoremen’s Association and its employers in their challenge of the Waterfront Commission of New York Harbor’s oversight of dockworker hiring at the US East Coast’s largest port.

Tuesday’s decision by the 3rd US Circuit Court of Appeals is a potential landmark that strengthens the Waterfront Commission’s hand in applying antidiscrimination measures in hiring ILA members at the Port of New York and New Jersey.

The appeals court refused to overturn a federal district court’s dismissal of a lawsuit filed in late 2014 by the ILA, the New York Shipping Association, and the Metropolitan Marine Maintenance Contractors Association.

The ILA and employers claimed the Waterfront Commission had overstepped its statutory authority and illegally interfered in hiring procedures established under ILA-employer collective bargaining agreements.

The 3rd Circuit rejected those arguments, and said the bistate compact that created the commission in 1953 was intended to apply to racial discrimination as well as other corrupt hiring practices such as job-selling and kickbacks that were prevalent at the time.

The ILA and employers argued that racial discrimination wasn’t mentioned in the congressionally approved bistate compact that created the commission. The appeals court disagreed, saying the compact’s legislative history showed that “the eradication of racial discrimination in hiring was one of the original purposes.”

“The commission’s actions in requiring certification that prospective employees were selected in a nondiscriminatory manner certainly further the compact’s purposes of rooting out corrupt hiring practices such as racial discrimination,” the 3rd Circuit said. “Therefore, the commission’s certification regulation cannot be viewed as an improper intrusion into appellants’ collective bargaining rights.”

The Waterfront Commission called the decision “a significant victory for the Waterfront Commission and, more importantly, for the port,” and said the 3rd Circuit had sent a “clear and unmistakable message” that hiring discrimination won’t be tolerated.

“This lawsuit was just one more desperate attempt to attack the Waterfront Commission’s efforts to ensure that hiring on the waterfront is done in a fair and non-discriminatory manner,” the commission said in a statement.

The union and employers deny discriminatory hiring practices, and accused the commission of interfering with implementation of their collective bargaining agreement, which sets aside 51 percent of new hires for military veterans.

Commission-industry disagreements over job referrals have raged for years and complicated the hiring of dockworkers at the port. Unlike at other ports, longshoremen at New York-New Jersey must be vetted and registered by the commission.

A wildcat strike that closed the port last Jan. 29 was blamed on ILA anger at the commission and complaints from ILA President Harold Daggett that the commission was harassing ILA members. The commission questioned dozens of ILA officials and members in an effort to identify the strike’s ringleaders.

Much of the friction between the commission and the union and its employers has centered on the commission’s effort to use its hiring oversight as a lever to break up what it sees as an inbred waterfront culture that encourages criminal activity.

In late 2010, the commission held a series of hearings highlighting side deals that allowed a “privileged few” ILA shop stewards and timekeepers to stay on the clock as much as 27 hours in a 24-hour day and collect more than $400,000 a year. Daggett defended the workers’ pay, telling the commission, “I wish all the members earned more than $400,000. These guys work their asses off out there."

Disagreements over job-referral practices have complicated the hiring of new workers at the port. The ILA and employers complained bitterly when the commission began closely vetting job candidates under the ILA-NYSA contract signed in 2013.

The commission has sought to ensure that ILA-referred candidates weren’t filling the slots designated for veterans or NYSA-referred candidates, that the ILA’s candidates weren't being hired first in order to maximize their seniority, and that new hires were diverse.

In its statement following the 3rd Circuit decision, the commission said the NYSA and MMMCA had failed “to represent the interests of their members and to fight for the employers’ right to have a say in who they hire, and for instead standing united with the ILA to fight the commission’s efforts to ensure fair hiring.

“By joining in this lawsuit, the NYSA, in particular, definitively demonstrated that it no longer represents the interests of its terminal operator members but, rather, that of the ILA,” the commission said.

ILA and NYSA officials told JOC they were studying the 3rd Circuit’s 32-page opinion and had no immediate comment.

In addition to their court challenge of the commission’s hiring oversight, the ILA and employers have sought state legislation to abolish the agency or restrict its authority.

In New Jersey, where 85 percent of the port’s cargo is handled, the union and employers are seeking again to pass legislation that would remove New Jersey from the commission and transfer the agency’s duties to the state police.

A similar bill was vetoed last year by New Jersey state Gov. Chris Christie, Republican. Commission officials say the legislation would be unconstitutional.

Newark Mayor Ras Baraka has joined the fray, demanding that the union hire more of his predominantly black city’s residents for port jobs. Baraka and commission officials say some port locals, including checkers and mechanics, are disproportionately white and male, and include relatively few residents of Newark, where one-fourth of the port is located.

The ILA and NYSA note that the percentage of minorities in the port-wide workforce is in line with that of the New York metropolitan area, and is rising as new hires are brought in. In response to Baraka’s complaints, Daggett also said many Newark residents who join the port workforce move to the suburbs soon after they start drawing ILA wages.

Contact Joseph Bonney at joseph.bonney@ihsmarkit.com and follow him on Twitter: @JosephBonney.