Ruling on American Airlines' Contracts Delayed Until June 29

Date: June 22, 2012
Type: Media Article

Source: Star-Telegram
Author: Andrea Ahles

American Airlines' pilots, flight attendants and mechanics will have to wait a little longer to learn the fate of their labor contracts.

On Thursday, U.S. bankruptcy judge Sean Lane postponed until June 29 his ruling on the Fort Worth-based airline's request to reject its union agreements. The ruling was originally scheduled for today.

The delay, requested by both American and the Allied Pilots Association, was granted so they could continue discussing the latest contract offer, which includes pay increases, furlough protection, profit-sharing and an equity stake in the airline after parent company AMR Corp. emerges from bankruptcy.

The Association of Professional Flight Attendants and the Transport Workers Union have already ended negotiations and are waiting for the judge's ruling, which could let American implement restructuring proposals that include layoffs and changes in benefits and work rules.

"We're willing to sit down with the APFA and TWU to resume good-faith negotiations at any time," American spokesman Bruce Hicks said.

Hicks said the delay of the ruling does not change the terms of the airline's last offer to the pilots union. The union's board declined to send the proposal to its members for a vote, saying the six-year contract lacked details.

While the "final" offer remains the same, the "extension will give the APA board more time to better understand our proposal and make a decision that is in the best interests of our pilots," Hicks said.

American said the offer includes:

A claim for a 13.5 percent equity stake in the new company when AMR emerges from bankruptcy;

No pilot furloughs, a change from the 400 pilot layoffs in the initial offer;

A 4 percent raise on the signing date and 2 percent raises at the end of the first, second, fourth and fifth years; the third year would have an industry pay rate adjustment or a 2 percent raise, whichever is greater;

An increase in regional jets that can be flown by third-party airlines and under domestic code-sharing agreements; and

A freeze of the pilots' "A" retirement plan and termination of the "B" retirement plan, replacing it with a defined-contribution plan.

The airline is seeking more than $1 billion in employee-related concessions as part of its bankruptcy restructuring. But it has recently been revising its proposals to unions because US Airways, which wants to merge with American, signed tentative agreements with the unions. American has reached deals with five of the seven work groups in the Transport Workers Union; mechanics and store clerks voted against the last offer.

The pilots union said the extra week gives its board more time to deliberate on American's offer.

Union spokesman Tom Hoban said that after management addresses the union's concerns, the board will vote again on whether to approve the offer as a tentative agreement. The judge requested the board vote to occur no later than Wednesday afternoon, he added.

Service agents expect ruling on union vote

Separately, a Fort Worth-based federal judge said he will rule today on American's request to block its passenger service agents from voting on union representation.

U.S. District Judge Terry Means heard oral arguments Thursday by the airline and the National Mediation Board about the election, which had been scheduled for June 21 to Aug. 2. The Communication Workers of America is trying to organize American's 9,700 customer service and gate agents.

American says the union did not collect authorization cards from 50 percent of workers, as required by a law enacted in February. The mediation board argued that the previous standard, 35 percent, should be used since the union filed the election application in December.

Means initially allowed two hours for each side to present its case but decided Thursday to allow short oral arguments instead.

He demonstrated a grasp of the case when he instructed American's attorney, Roger Diseker, not to rehash all of the facts.

"I don't need a factual reset," Means said. "I've heard it. I've read it. I've dreamed it. I think I've got it."

Diseker argued that federal agencies are required to apply the law in effect at the time of the decision. In April, after the law had changed, the board issued its ruling that an election should occur.

The board noted that the 35 percent threshold was over 30 years old and that American did not raise the issue in previous appeals during the board's scrutiny of the union's application. "No harm will come to them when an employee punches their code in and votes 'yes' or 'no,'" mediation board attorney Peter Wechsler said, referring to the phone and Internet voting process during a union election.

The judge asked American repeatedly how the airline would be harmed if an election was held.

Diseker said employees would have to work on a union campaign, which would take them away from other job duties.

"I don't think you're answering my question," Means told Diseker. "What is the harm to you by the ringing of this bell?"

A few dozen members of the communications workers union, wearing red shirts, demonstrated outside of the courthouse, saying they just want the right to vote. Some entered the courtroom for the hearing but were instructed to turn their shirts inside out to prevent the judge from seeing the pro-union slogan on them.

"As a front-line employee, we are the only group that is not unionized, and we want a voice in our future," said Rosemary Capasso, an agent at Dallas/Fort Worth Airport who attended the hearing.

American spokeswoman Missy Cousino called the demonstration a publicity stunt, adding that the company is seeking judicial review of the issue.

"We will continue to stand up for our employees and respect their right to decide whether or not to seek union representation, but want to ensure the correct law was applied in our case," Cousino said.

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