Proposed Seniority Integration (corr)

11-15463-shl
Doc 2133-3
Filed 04/03/12 Entered 04/03/12 13:17:51
of 7
c
Pg 1
Exhibit C
American Independent Cockpit Alliance, Inc.
- W o r k i n g
f o r
t h e
p i l o t s
o f
A m e r i c a n
A i r l i n e s -
– Chuck
Long
President
INTRODUCTION
Former TWA pilots stand in a unique position in these bankruptcy cases. To
save the estate costs, to avoid potential litigation, and to ensure equitable
treatment of former TWA pilots, a proposal is offered for consideration by
the Creditors Committee. The proposal would allow AA to proceed with
cost-reduction measures without the fear of litigation by restoring the
seniority of former TWA pilots while protecting junior pre-merger AA pilots
via the application of a no-bump, no-displacement policy.
BACKROUND
All former TWA pilots in the service of American Airlines are protected by
an amendment to the American Airlines collective bargaining agreement
(CBA) entitled “Supplement CC.” Supplement CC originated in the wake of
a merger between American Airlines and Trans World Airlines in 2001 and
effectively relegates former TWA pilots to a position on the American
Airlines seniority list differently and vastly inferior to that of “native”
American Airlines pilots (pilots that were on the AA seniority list prior to
the TWA asset acquisition). Supplement CC created a “Modified System
Seniority List,” which effectively strips former TWA pilots of their date-ofhire seniority. This grossly unfair treatment of the former TWA pilots
provoked no less than the United States Congress to legislate a process that
would prevent the recurrence of such an inequitable result. See McCaskillBond Amendment. 49 U.S.C. § 42112; Committee of Concerned Midwest
Flight Attendants For Fair & Equitable Seniority Integration, v. Int’l Bhd. of
Teamsters Airline Division & Teamsters Local 135, 2011 U.S. App. LEXIS
23785 (7th Cir. Nov. 30, 2011) (“this statute [McCaskill-Bond] grew out of
American Airlines’ acquisition of Trans World Airlines …”).
As a partial offset for this radical loss of seniority, Supplement CC provides
11-15463-shl
Doc 2133-3
Filed 04/03/12 Entered 04/03/12 13:17:51
of 7
c
Pg 2
former TWA pilot group certain limited protections. Moreover, these
limited protections are part of an organic whole that, according to the plain
terms of Supplement CC, cannot be altered without destroying the integrity
of the integration scheme it creates.
However, in its Section 1113 term sheet, the Debtor now proposes to
effectively eliminate Supplement CC and close the STL domicile. It claims
that doing so would save $11-13 million dollars per year.
However, by closing STL and abrogating Supplement CC, the Debtor also
abrogates the instrument creating the Modified System Seniority List. That
would leave former TWA pilots with no station protection and, according to
APA and the Debtor, no restoration of the former TWA pilots’ date of hire
seniority. Such an outcome would result in job destruction on a massive
scale, concentrated on former TWA pilots – a severe and unacceptable
scenario.
The APA has responded to AA’s Supplement CC elimination with a
proposal to arbitrate the issue, but not on terms that would be fair to former
TWA pilots because the jurisdiction of the arbitration panel is prejudicially
restricted and because former TWA pilots are excluded altogether from
participation in the arbitral process, an exclusion that renders the arbitral
process legally infirm.
Therefore, the TWA pilots are prepared to litigate any attempt to eliminate
the protections guaranteed by Supplement CC – in the absence of returning
the TWA pilots to an Unmodified System Seniority list, i.e., one that is
based on their TWA date of hire. It should be noted that the basis for such
litigation will be grounded in a long line of cases that recognize an employee
group’s right to bring a duty of fair representation (DFR) action against both
its union and employer where the employer has colluded in the DFR
violation. See, e.g., Price v. S. Pac. Transp. Co., 586 F.2d 750, 752 (9th
Cir. 1978) (joinder of the employer is permissible when, as in this case, the
employee alleges that the employer is implicated in the union’s breach of its
duty of fair representation); Steele v. Louisville & Nashville R.R. Co., 323
U.S. 192, 207 (1944) (carrier was joined as defendant in DFR action);
DelCostello v. Teamsters, 462 U.S. 151, 165 (1983); Hodges. v. Atchison,
Topeka & Santa Fe Ry. Co., 728 F.2d 414 (10th Cir.), cert. denied, 469 U.S.
822 (1984); Steffens v BRAC, 797 F.2d 442, 445 (7th Cir. 1986); Masy v.
N.J. Transit Rail, Inc., 790 F.2d 322 (3d Cir. 1986). Hence, such litigation
11-15463-shl
Doc 2133-3
Filed 04/03/12 Entered 04/03/12 13:17:51
of 7
c
Pg 3
would not be confined to an internal “union dispute.” The TWA pilots
recently prevailed in a class action lawsuit against its former union
representative – the Air Line Pilots Association (ALPA) – on the grounds
that ALPA violated its DFR obligations with respect to its role in the
seniority integration process. AA and APA only narrowly avoided liability
in this prior litigation based on the technicality that, during the relevant time
period, the TWA pilots were neither employed nor represented by AA and
APA, respectively. In the next round of litigation, this technicality will have
no application.
As an alternative to the Debtor and APA’s unfair Supplement CC proposals,
we the undersigned on behalf of the former TWA pilots, propose the
following seniority adjustment, which we believe can be accomplished at no
cost to the Debotor and will avoid litigation. (Note that each item is integral
to the whole).
PROPOSAL FOR SENIORITY ADJUSTMENT
• All former TWA pilots will be placed on the American Airlines
Unmodified System Seniority list (hereafter referred to as the list)
based on their TWA date of hire. This date of hire will be used to
create a “Occupational Date” using the same method used for “native”
AA pilots, DOH plus 48 days. The data for generating this list is
currently contained in the APA modified system seniority list as well
as records maintained by American Airlines.
• This list will be published, and a bid message generated to determine the
new four-part bid status (or its post-bankruptcy equivalent. However,
we will continue to use the term four-part bid status in this proposal)
that the former TWA pilots are entitled to, based on their positions on
the list.
• Those former TWA pilots who are currently on the property will then
occupy their four-part bid status with the following exception: No
former TWA pilot will be able to displace (bump) a junior AA pilot
from their current position. If a former TWA pilot can hold a different
four-part bid status based on his/her position on the list, they will be
awarded those positions as they become available due to attrition or
the acquisition of additional equipment. This will eliminate the costs
associated with displacing pilots currently holding those positions and
the costs of training the former TWA pilots to replace them.
11-15463-shl
Doc 2133-3
Filed 04/03/12 Entered 04/03/12 13:17:51
of 7
c
Pg 4
• Those former TWA pilots who are currently on furlough status and are
now furloughed out of seniority based on the list will remain
furloughed until recalled based on their seniority on the list. When
they are recalled, they will occupy the four-part bid status that their
position on the list can hold.
This seniority adjustment will remain in effect until all former TWA pilots
occupy the four-part bid status that their position on the list can hold, and all
former TWA pilots who are on furlough out of seniority are returned – but in
no case longer than a date two years from the signing of this agreement.
After that date, all former TWA pilots must be accorded the four-part bid
status that their positions on the list can hold, and all former TWA pilots
who are furloughed out of seniority based on the list must be returned to
active status and accorded their four-part bid status based on their position
on the list.
BENEFITS
This proposal will produce a cost savings to the Debtor during the time
frame that the former TWA pilots are returned to their Date of hire seniority.
When a Captain of a Boeing 777 aircraft retires, it generates a cycle of seven
(7) training events to replace the retiring pilot. (For example, a 767 Captain
bids for, and gets trained in, the vacant 777 Captain slot, then a 737 Captain
bids for and gets trained in the now vacant 767 captain slot and so forth
down through the Captain and First officer positions until finally a new pilot
is hired ‘off the street’ to fill the lowest position at American.) With this
proposal, as the former TWA pilots are returned to their Date of hire
seniority positions, they will jump training slots (positions in the normal
cycle) resulting in as little as three (3) to five (5) training events generated
from a 777 Captain retirement versus the seven (7) it takes now. At an
estimated $30,000 to $40,000 per training event, this cost savings to the
Debtor is significant.
The alternative to this proposal, i.e., closing SLT and leaving the TWA pilot
group with their current seniority, would generate extensive training costs.
This is so because senior 767 Captains would be required to retrain as MD80
or 737 Captains, and junior 767 Captains and below would require training
to assume their new positions as First Officers on 777 and other aircraft in
the American Airlines fleet, displacing the native First Officers who now
occupy those positions thereby creating additional training costs. Further, the
11-15463-shl
Doc 2133-3
Filed 04/03/12 Entered 04/03/12 13:17:51
of 7
c
Pg 5
Captain positions lost by the former TWA pilots would then be assumed by
“native” AA pilots creating a windfall for that group and require a cycle of
additional training events.
APA’s proposal for arbitration on the Supplement CC issue, pursuant to
which the arbitrators are prohibited from altering the current modified
system seniority list, would only substitute one failed integration scheme for
another inferior one, and would guarantee a legal challenge by the former
TWA pilot group with concomitant litigation costs and potential liability to
the reorganized company. As referenced above, the TWA pilots have
recently concluded a successful class action lawsuit against ALPA which
entitles them to damages and reimbursement of their legal fees. The federal
court’s recognition of the inequitable treatment suffered by TWA pilots, and
the imminent replenishment of the TWA pilots’ treasury, will galvanize our
pilot group to resist any further degradation of our seniority position.
We understand that, although our proposal is a cost saving solution to
American Airlines desire to close the STL domicile there will be resistance
from the Allied Pilots Association (APA) to this method. We will address
those concerns now.
It is important to note that Supplement CC was created by the APA and
American Airlines without either the input of, or approval by, the former
TWA pilot group, and over their strenuous objections. After Supplement CC
was implemented, the APA published a “Summary of Supplement CC.”
This was a document written by the APA mergers and acquisitions (M&A)
committee. This “Summary” states the APA’s objectives in creating
Supplement CC were that the seniority integration should be:
•
•
•
•
Mutually beneficial to members of the two pilot groups;
One that promoted unity in the combined pilot group;
Workable;
Fair;
By any objective standards, Supplement CC has failed to attain any of these
goals:
TWA pilots have borne the brunt of furloughs over the last ten years, due to
the fact that TWA Captains and First Officers with years of experience were
stapled on the modified system seniority list below AA new-hires. This can
11-15463-shl
Doc 2133-3
Filed 04/03/12 Entered 04/03/12 13:17:51
of 7
c
Pg 6
hardly be said to be “beneficial” to the TWA pilot group, in derogation of
the contractual commitment made to the TWA pilots by APA and AA in
Supplement CC.
Far from promoting unity in the combined group, the former TWA pilots
were locked into one domicile (STL) and denied Captains positions in other
AA domiciles even if their seniority on the modified system list could hold
those positions.
Finally, while the definition of “fair” is open to interpretation, it is a fact
that:
• Every AA pilot who held the position of Captain before the TWA asset
purchase still holds that position
• Other AA pilots who were not Captains before the TWA asset purchase
have upgraded to the Captains seat
• There are over 70 former TWA pilots who were Captains at the time of the
asset purchase that have not only been furloughed for years, but have
been relegated to the First Officer position for over ten years.
It cannot be argued that these facts constitute a fair integration. It is beyond
reason to argue that returning the TWA pilot group to their date of hire
seniority would constitute a windfall at the expense of “native” pilots.
Native pilots have remained employed for a decade whilst their TWA
counterparts, who were hired many years before them and reached the
pinnacle of their profession, were on the street searching for a job in the
same period. Further, any claim by the APA that Supplement CC protects
only Captain positions but not First Officers is false and flatly contradicts
the APA’s solemn representation to the Third Circuit Court of Appeals that:
The modified agreement “dovetailed” large numbers of TWA
LLC pilots with the incumbent AA pilots and also included
conditions and restrictions that protected the jobs, captain and
first officer positions and promotional opportunities for the
TWA LLC pilots at the sole remaining TWA LLC pilot base in
St. Louis. A0058-60, 0324-40. The modification, known as
Supplement CC, was executed by the APA and AA on
November 8, 2001. A0059-60. (p. 6, Brief of Allied Pilots
Associaton, 24 March, 2005, in Bensel v. APA, Case No. 041145) (emphasis added)
11-15463-shl
Doc 2133-3
Filed 04/03/12 Entered 04/03/12 13:17:51
of 7
c
Pg 7
In short, while the APA may have political reasons to oppose our methods
for eliminating the STL domicile and Supplement CC, those objections are
not based in reality and only seek another method to disadvantage the former
TWA pilot group and add significant costs to the AA bankruptcy process.
Their proposed system will create enormous additional training costs and
instability due to the guaranteed litigation by the former TWA pilot group.
This additional cost to the AA bankruptcy process can be avoided as
explained herein.
C.E. Long
President AICA