APA,APFA & TWU

[Frank Szabo]

I'd say binding arbitration is a bit of a risk. There's nothing to prevent an arbitrator ruling, settling the contracts, and the company continuing to proceed with a S1113 abrogation.

Just because the company would agree to binding arbitration doesn't mean the agreements would be sustainable, and the only thing the company would need to prove in the S1113 proceedings is that voiding the newly arbitrated agreement is still in the economic interests of the estate if it is to restructure.

That, too, could backfire, but since we appear to be playing "Lawyering With The Stars" lately, you need to look at this as a game of chess, and not a game of checkers or dominoes...

Question for you, E (or anyone else that cares to answer) - if the company were to accept the request for binding arbitration, wouldn't that then constitute the company's "last, best offer"? If the contracts were then abrogated and the company's "last, best offer" installed by the judge, what would be the point? They'd be the same thing, at that point.

The suit brought by the the APA is steaming into uncharted seas and, like it or not (regardless of one's position), will have to be ruled on by the judge (hopefully, without the judicial activism rampant in the courts these days). This request for bindinarbitrationon may well be part and parcel to the ongoing chess game - if so, it'll be the first time I've seen all three of AA's unions cooperate on anything, part of the workers' problems in dealing with the company. If AMR's position re: wages, salaries and benefits for its non-elite are really necessary and as defensible as Horton would have us believe, acceptance of the request shouldn't be an issue for the company as it would save a helluva lot of grief and hand-wringing for all concerned, not to mention giving all involved someone else to blame for their problems. I truly do not believe that would be the case, however. I believe an arbitrator would return a middle-of-the-road contract with respect to those installed at other airlines upon their emergence from bankruptcy - far more favorable to AA's workers than what's been "offered" thus far.

Allowing a third party to decide a position that both sides deem justified would really be ideal. AMR can't be in worse shape than the other airlines doing the standard strategic Chapter 11 protection thing. Actually, we're in far better shape and could be again rather quickly IF our management could see the toxic management/employee relationship they've held so dear for the last 10 years is not any way to win friends and influence people.

Regardless - the APA's motion that simply asks "who trumps who" re: jurisdiction over union contracts has to be answered first, I would think, as this has never before been considered nor is it dealt with anywhere in the CFR that I can find. At that point, if the company's position is as defensible as claimed, they'll have no choice but to accept the request/offer to save face.

Tune in tomorrow for the next episode of "As the Airline Churns".

 

[eolesen]

Frank, hard to say. Even if the two parties came to an agreement they thought was sustainable, before the judge approved it, it would likely have to be approved by the unsecured creditor committee first. Is APA going to approve something for the APFA or TWU that has provisions they don't have in their arbitrated agreement?

I just see too many worms if this request were granted serious attention...

In abrogation, the UCC has less of a say in the matter.

 

[Frank Szabo]

Frank, hard to say. Even if the two parties came to an agreement they thought was sustainable, before the judge approved it, it would likely have to be approved by the unsecured creditor committee first. Is APA going to approve something for the APFA or TWU that has provisions they don't have in their arbitrated agreement?

I just see too many worms if this request were granted serious attention...

In abrogation, the UCC has less of a say in the matter.

Regardless, E - won't the judge have to rule on the point of law rather than simply tossing the filing as is being hoped for by the suits? Something will have to be established as having precedence, since the question was "asked" of the court.

The old saying re: getting the worms back in the can requiring a larger can will most certainly apply to this.

 

[jersey777]

Here is the press release from the APFA:APFA asks NMB for Arbitration

In the following letter APFA asked the National Mediation Board to recommend to the parties final and binding arbitration to resolve the collective bargaining dispute. APA and TWU sent very similar letters. All three unions stated that they would agree to arbitration if offered by the Board.  This is not a proffer under Section 5 of the Railway Labor Act (RLA) which could trigger a 30-day cooling off period but rather a recommendation as provided for in Section 7 of the RLA.
 
Why arbitration and why now?
 
Binding arbitration “offers finality and an expedition resolution.”  It is a method that has been successfully used in the airline industry time and time again. Experienced labor arbitrators assess all the outstanding issues, issue a determination, and the matter is settled completely with neither party having the right to challenge the decision or escape its binding effect.
 
In comparison Section 1113 can leave the contract dispute unresolved indefinitely. In our case American has made clear that its proposal of $230m in additional concessions is its first and final offer. Only in bankruptcy would a company ever consider, no less actually invoke a “take it or leave it” approach to bargaining. If we don’t yield to this demand American will file a Section 1113 motion in which it will ask the court for  authority to reject our collective bargaining agreement.  
 
The most prominent risk of an 1113 motion is that the judge has to make an all or nothing decision and our membership would have to live under - what will in all likelihood would be painful terms and conditions of employment -  for what may be a very long time. 
 
Yet even if the Company’s motion is granted, it is a victory of questionable value. A rejected contract does not deliver finality to the contract dispute. In fact the law compels the Debtor to continue to negotiate with the unions. As long as that bargaining goes on without a resolution, the Debtors will be deprived of the certainty that is essential to a successful reorganization.   This may explain why no airline has ever emerged from bankruptcy without consensual agreements in place with all its unions.
 
As our letter states, we are at a critical juncture.  Assuming the NMB makes the proffer of arbitration, American will have a very clear choice. It can continue to believe that it can unilaterally force its workers to endure a $1.25b cut in their wages, working conditions and benefits.  It can pursue an illusory solution that offers no certainty and breeds only resentment among its employees.  
 
Or it can recognize that the morale of its workers is invaluable. It can realize that what it achieves in bankruptcy is less important than how it is attained. If it does so, it will readily accept binding arbitration as the method for reaching a fair and final settlement.   We hope that Tom Horton and his team make the right choice.   






In Unity,
Laura Glading
 

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[Bob Owens]

NMB and binding arbitration is the final procedure providing both parties agree that any settlement is word.. This is usually utilized as a last ditch effort to ward off bankruptcy or deadlocks..

After bankruptcy filing, it's evolves into a whole new game..

This is the companies game, rules and time frame.. Exactly why would the "home team" agree to an inferior position such as binding arbirtration?

Maybe the home team realizes they reached too far.

 

[aapitbull]

NMB and binding arbitration is the final procedure providing both parties agree that any settlement is word.. This is usually utilized as a last ditch effort to ward off bankruptcy or deadlocks..

After bankruptcy filing, it's evolves into a whole new game..

This is the companies game, rules and time frame.. Exactly why would the "home team" agree to an inferior position such as binding arbirtration?

This could be the Home Teams idea, that would explain why the twu was for it and not unlike the pension issue it would bring the contracts to a close without ever having to discuss the companies finances in public. with the PGBC out of the way and signed deals with all 3 labor unions AA could exit BK buy the end of the summer. We will know if the company agrees to arbritration or not.

Just saying!

 

[Buck]

Frank, hard to say. Even if the two parties came to an agreement they thought was sustainable, before the judge approved it, it would likely have to be approved by the unsecured creditor committee first. Is APA going to approve something for the APFA or TWU that has provisions they don't have in their arbitrated agreement?

I just see too many worms if this request were granted serious attention...

In abrogation, the UCC has less of a say in the matter.

Fine, but will the members have the ear of their respective unsecured creditors committee?

Will the members of the respective unions be able to vote on any form of agreement?

 

[AAOHNO]

Will the members of the respective unions be able to vote on any form of agreement?

Are you referring to a Binding Arbitration Vote??? If so, it's called binding arbitration for a reason. If not, it's the usual Buck speak.....

 

[eolesen]

Fine, but will the members have the ear of their respective unsecured creditors committee?

Will the members of the respective unions be able to vote on any form of agreement?

You and your peers already voted when you allowed the negotiating committee to take self-help actions, which unfortunately include accepting an offer of binding arbitration...

 

[BoeingBoy]

Regardless - the APA's motion that simply asks "who trumps who" re: jurisdiction over union contracts has to be answered first, I would think, as this has never before been considered nor is it dealt with anywhere in the CFR that I can find.

By providing a process by which labor contracts can be abrogated, which isn't in the NRLA anywhere, the answer to that question is obvious. Case history thoroughly confirms that a company in bankruptcy can abrogate labor contracts.

What the 3 unions have effectively done is give AA the possibility of a second bite at the apple. If arbitration is agreed to under the terms requested and the arbitrator awarded more than AA wanted to pay, abrogation is still a possibility since AA didn't get what it wanted. However, if the arbitrator awarded less than the unions want the members are stuck with an agreement.

Jim

 

[Overspeed]

Maybe the home team realizes they reached too far.

Kind of like the vote 'no' coalition did?

BK was just a threat. Our pensions will be better off, in fact we might get two. The judge will give us pay raises. Outsourcing at AA can't happen because there is a mechanic shortage. Etc...

I noticed that the Techs are getting to keep their pay raises they got in the TA in the term sheets plus the 1.5%. By voting no it looks like we are getting outsourcing, lost retiree medical, and 1.5% raise off the 2003 contract rates.

That vote no recommendation was awesome advice.

We should have listened to those who have been through BK already.

 

[AAOHNO]

Kind of like the vote 'no' coalition did?

BK was just a threat. Our pensions will be better off, in fact we might get two. The judge will give us pay raises. Outsourcing at AA can't happen because there is a mechanic shortage. Etc...

I noticed that the Techs are getting to keep their pay raises they got in the TA in the term sheets plus the 1.5%. By voting no it looks like we are getting outsourcing, lost retiree medical, and 1.5% raise off the 2003 contract rates.

That vote no recommendation was awesome advice.

We should have listened to those who have been through BK already.

Waaaaaaa Waaaaaa Waaaaaaaa :angry: WE VOTED! The majority said no, now Shut The f up or go private message Informer about it......And don't worry, TWU will be history soon enough.

 

[Buck]

Are you referring to a Binding Arbitration Vote??? If so, it's called binding arbitration for a reason. If not, it's the usual Buck speak.....

02/24/2012. AMR Bankruptcy Update. TWU. Local 514



[/quote As we pass our counter proposals, please note that on advice of our attorneys, such specifics, strategically and legally, will not be communicated. We are in the battle of our lives, and it will compromise our strategies before a tentative agreement is reached. Remember however, that International President James Little has assured the membership that they will vote on any tentative agreement reached with AMR, or, in the alternative, they will vote on the company’s last offer.


It would appear the Jim Little has already assured the membership concerning the vote.

AAOHNO. spin this anyway you want.

 

[limit]

There is no vote on a binding arbitration decision.Both sides are stuck with it.
There is no tentative agreement to vote on.
Its over and done, ...... for the unions at least.
Even if , for some really strange reason , the union members voted on it , the result of the vote would be irrelevant.

 

[Overspeed]

Binding arbitration more often than not favors parity. Isn't parity and precedent one of the guiding principles of arbitration. So that would mean 40% outsourcing, frozen pension (got that), and higher medical premiums. But maybe we will get a raise like Bob wants at the expense of a few thousand outsourced.

Doesn't the rest of the creditors committee have to agree?