Here is some interesting stuff!
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Case 2:08-cv-01633-NVW Document 591 Filed 07/17/2009 Page 15 of 22
F) Excluding Defendant’s exhibits: No. 1003 (Notice of Removal, because this would
have shown the ALPA West MEC attorney Freund describing Nicolau as merely a
bargaining proposal), No. 1048 (AWA MEC message, because this would have
shown ALPA pressuring the West to compromise Nicolau), No. 1055 (ALPA
West MEC attorney Freund’s post-hearing brief, because this would have shown
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Case 2:08-cv-01633-NVW Document 591 Filed 07/17/2009 Page 16 of 22
that ALPA Merger Policy had undergone a political process whereby
consideration of date of hire had been deliberately excised), No. 1068 (ALPA
West MEC attorney Freund’s email, because this would have shown that ALPA
considered East operations more profitable and thus a basis upon which East pilots
would reject voluntarily accepting the Nicolau award).
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Notice of Removal
Jeffrey Freund - Notice of Removal July 24, 2007
Thus, the “arbitration award” Plaintiffs purportedly seek to “vacate” is in actuality the proposed pilot seniority list developed through ALPA’s Merger policy that ALPA will adopt as its bargaining position to be presented to the Company, but which (like a union bargaining position in any matter) the Company is not required to accept. Application, Ex.1 at 2,9 (ALPA will present to the company the merged seniority list developed through ALPA’s Merger policy arbitration procedures, and “ALPA will use all reasonable means at its disposal to compel the company to accept and implement the merged seniority list”). Plaintiffs seek review of this ALPA bargaining position developed through ALPA Merger Policy, and, while couching it in the terms of “vacating” and “arbitration,” the relief they actually seek is a review of the product of ALPA’s Merger Policy, and, ultimately, alteration of ALPA’s bargaining proposal to the company…Plaintiff’s Application to “vacate” an “arbitration award” that does not establish any enforceable seniority rights in a collective bargaining agreement with the Company, but which merely sets out ALPA’s bargaining position to be presented to the company, is not a state law claim at all but rather an artfully pled Federal claim for breech of Duty of Fair Representation.
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Judge Emmet Sullivan - Memorandum Opinion November 30, 2007
“Ultimately, the ALPA Merger Policy generates a proposed seniority list, which ALPA promises to present to the merged airlines in an effort to persuade the merged airlines to adopt the list.” See Defs. Opp’n 3-4.
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"I think the pressures and risks are all on your side of the transaction, not the US Airways side. Here are my thoughts....The judge who has been sheparding US Airways along for the last three years and two bankruptcies will not let it collapse."
“Second, I believe that the company can operate without a transition agreement, but you can’t. You have scope protections, but keep in mind that the new company will be US Airways and will be flying under its certificate. While the two companies remain separate, there will be little to restrict the company from shifting flying from AWA to AAA or from allowing all the new flying to AAA without a transition agreement keeping flying separate.”
E-mail text from West Merger Attorney Jeff Freund to the America West MEC circa late August 2005.
I’ve been thinking about the status of the Transition agreement and its implications for seniority integration and I wanted to pass these thoughts on to you before the MEC decides how to proceed. I believe that it is very important that you finalize an agreement and do it soon. I think the pressures and risks are all on your side of the transaction, not the US Airways side. Here are my thoughts.
First, whatever you may think about the transaction, I believe that it will be approved and approved promptly. The judge who has been sheparding US Airways along for the last three years and two bankruptcies will not let it collapse. In any event, it will not be ALPA’s objection (assuming you don’t reach a transition agreement and ALPA files an objection) that will kill it. So you should assume it will promptly be approved.
Second, I believe that the company can operate without a transition agreement, but you can’t. You have scope protections, but keep in mind that the new company will be US Airways and will be flying under its certificate. While the two companies remain separate, there will be little to restrict the company from shifting flying from AWA to AAA or from allowing all the new flying to AAA without a transition agreement keeping flying separate.
Third, the implications of that fact to seniority integration are not good. If flying tips to AAA during the transition period, even if we get a “good” integration, AAA pilots will be in seats and a “no bump/no flush” provision will keep them there until a system bid allows seniority to operate unrestricted. That is not a good result for AWA pilots.
Fourth, in an event, as I have explained, to the extent your objections are to the absence of a no furlough clause, I don’t think you will ever get one and I don’t think you want one. You should want AAA pilots furloughed…
Finally, while I know you are trying to capture some additional economics, in these negotiations, this is not the time to draw the line on those issues. You will have other points of leverage during subsequent negotiations to press for those items. I’m not suggesting that you abandon your attempts immediately, just don’t get yourselves in a negotiating position where the deal craters over those issues. In short, I think you should not come out of the next round with the company without a deal.
Dan Atkins and I are intending to be at the meeting by conference call on Wednesday. Please let us know how and when we should do that.
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Project Zanzibar
At the May 9 session of the Joint Negotiating Committee, Scott Kirby, President of the Company, revealed to the assembled representatives of both pilot groups and ALPA National that he had headed a project code-named “Project Zanzibar” for AW in 2005 and that the legal papers for a Chapter 11 filing had been prepared and a plan developed for AW’s bankruptcy in the event that the merger failed to come to fruition. Project Zanzibar was AW’s only Plan B. It is now beyond dispute that the junior AW pilot, Dave Odell, and 300-400 other AW F/Os hired in 2002-05 would have been furloughed absent the US merger, as AW went into Chapter 11, perhaps never to emerge. In light of this new disclosure from the carrier’s President, there is clearly no support for the explicit premise of the Nicolau Award that these AW pilots had more job security and better promotional prospects than US pilots hired in 1988, including hundreds who had never been furloughed for a single day.
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TRANSPORT WORKERS UNION OF AMERICA, LOCAL 545’s POST HEARING BRIEF
According to the merged carrier’s own website, U.S. Air brought to the merger approximately twice the number of jet aircraft (280 - 139) as AWA and had more firm orders for additional aircraft than AWA (29 - 26). Tr. 101-03; Joint Ex. 1 (Merger News, “HP-US Comparison,” thehub.usairways.com). U.S. Air’s operating revenues were almost three times those of AWA ($7.1 billion - $2.25 billion), it served almost twice as many destinations (179-96) and carried approximately twice the number of passengers (41.3 million-21 million). Id. As of the end of the second quarter of 2005, approximately one month after the merger agreement was executed, U.S. Air had almost four times the amount of cash on hand as did AWA ($557 million - $116 million), had an $11 million advantage in net operating income for the quarter ($41 million - $30 million), had over twice the number of available seat miles (“ASMs”) (16.4 billion - 7.7 billion) and enjoyed significant advantages over AWA in Revenue/ASM (10.72¢ - 9.07¢) and Yield/Revenue Passenger Mile (14.11¢ - 10.25¢). Tr. 97-101; Local 545 Ex. 9 (Financial Condition Comparison, AWA and U.S. Air, June 30, 2005); see also Local 545 Exs. 1 and 10 (AWA’s SEC Form 10Q Report for Quarter Ending June 30, 2005).
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Dispatcher Decision Arbitrator Richard Bloch Award April 26, 2007: “Much of West’s claimed superiority over East, in terms of what it brought to the merger, is speculative.”
However, West’s claim that U.S. Airways emerged from bankruptcy “only because it [was] acquired by a stronger enterprise”10 is reflected neither in the KPMG audit report (cited by West) nor in any other portion of the evidence. Instead, each carrier had something to contribute. Airways, for example, was much larger. It served almost twice as many destinations as AWA and carried twice the number of passengers. Airways has substantially more cash on hand, following the merger agreement.
West characterizes the merger decision on AWA’s part as a one-way economic bailout. But there is no support for this in the record; surely, the respective companies did not endorse that view. AWA concluded, according to the statements of its CEO, that “…when we looked out at our future, what we saw wasn’t good…. Assuming we couldn’t go out and restructure or raise cash, it is possible that AWA would have been facing its own Chapter 11 at some point. Employees may like to think we “saved” US but the fact is we saved each other…
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US Airways MEC Presentation to ALPA Executive Council May 21, 2007
In view of the analysis set forth above, we believe the following quotation from Captain Jim Brucia’s Opinion at p. 3 is apt and accurate:
As a consequence of the Boards decision, America West pilot Odell, who was hired less than 2 months before the merger was announced, has been placed immediately senior to US Airways pilot Colello who was hired more than 16 years earlier and who had over 16 years of credited length of service. I disagree with this placement, which disregards Colello’s substantial service time.…
The Board did not adequately take into account the realities of the “new” airline, the return of furloughees that has already taken place and the much greater rate of age-based attrition at US Airways as compared to the rate at America West. The vast amount of agerelated attrition that has occurred within the US Airways pilot group caused the recall of over 300 US Airways pilots between March 2006 and the first week of January of this year. The pace of recalls is brisk and has continued. During the hearings we learned that additional recalls were taking place and there was testimony that stated at the current pace it was possible that all US Airways pilots would receive recall notices before the end of 2007.
