Q. When does the offer actually go into effect?

A. First, the court has to ultimately approve the five agreements. This is certainly expected to happen, but there is no time set for this to occur. Second, TWU and AA have an understanding that the new agreements, even after court approval, will not go into effect until all the other union labor groups, (including M&R and Stores,) have resolved their 1113 bankruptcy asks. The groups that voted yes will not have to experience the concessions until all contract groups have completed their 1113 process, either by ratifying a deal or by having their contract rejected. All groups will be treated equally as to the start time of any concessions.

Q. What happens if another group gets a better overall ask than the one to which our bargaining unit agreed?

A. Through the “me-too” clause contained in the ratified contracts as well as pursuant to the understanding we have with AA, each group who voted yes will receive the same percentage reduction in their total give back amount as does any other bargaining group. However, AA maintains that all groups must still meet their full ask amounts.

Q. While we await the outcome of the 1113 process for the remaining bargaining units, what working conditions and terms do we work under?

A. We will still operate under the current existing TWU contract that we have been working under for years. There is no change in the status quo.

Q. When will the 1113 process be completed?

A. While the court has announced it will issue a ruling in early June, there is no way to actually know when the judge will issue a final order with regard to AA’s 1113 motion to reject and cancel the contracts as to the other contract groups.

Q. Does our yes vote affect the pursuit of a possible US Airways merger by TWU and the other unions?

A. No, we remain very supportive of this possible merger.

Q. Will our TWU lawyers still present a case in bankruptcy court regarding the five units that voted yes?

A. No. By ratifying the last ask, each of those units ended the risk of the judge canceling their contract. New successor agreements have been tentatively reached awaiting court approval.

FOR THE TWO GROUPS THAT VOTED NO AND REJECTED THE LAST OFFER:

Q. Are the TWU lawyers still presenting the union case contesting AA’s 1113 motion to reject the M&R and Stores collective bargaining agreements?

A. Yes.

Q. When will the judge issue his final ruling on AA’s 1113 motion to reject our two contracts?

A. While the court indicated that its ruling is due in early June, there is no way to know exactly when the decision will issue.

Q. Will there be additional 1113 negotiations between TWU and AA before the judge rules on the motion seeking to reject our two contracts?

A. The judge has consistently encouraged all parties to negotiate and reach a consensual deal. He has even offered to have another judge informally assist the lawyers in the talks. The pilots and flight attendants have been in talks over the last week and are in front of us at this time. We anticipate that there will be more court settlement talks.

Q. If no settlement agreement is reached, what happens next?

A. We await the judge’s final ruling on the 1113 motion to reject the two CBA’s.

Q. If the judge does in fact reject our contracts, what terms will we then work under?

A. The terms of the AA March 22 1113 term sheet filed in court. (That term sheet does not include raises, the 401k match, profit sharing and other items including the return of pre-funding company contributions, if such is approved by the court).

Q. While the 1113 process keeps unfolding, are we still pursing the possible US Airways merger?

A. Yes, we are operating on multiple tracks and are very supportive of that possible merger.

The passenger service agents are currently not represented by a union, but the Communication Workers of America (the “CWA”) have filed a petition to represent the PSAs under the Railway Labor Act.  On February 1, 2012, the Debtors told the PSAs (and other unionized and non-unionized employees) of the Debtors’ plans to change the terms of employment for their non-managerial salaried employees, including the PSAs, after a period of “feedback.”  The Ad Hoc PSA Committee filed this Motion seeking to restrain the Debtors from making these changes until the National Mediation Board determines whether to issue a certification to the CWA as the exclusive bargaining representative for the PSA.  The Ad Hoc PSA Committee further requested that if the CWA is so certified, the Debtors be required to satisfy the proceural and substantive requirements of section 1113 of the Bankrutpcy Code before they be permitted to change the PSAs’ terms of emploment.  Finally, the Ad Hoc PSA Committee in its reply papers requested that the Court compel the Debtors to provide the NMB with mailing labels necessary to conduct the election among the PSAs currently scheduled to go forward on May 17, 2012.

The Debtors and the Unsecured Creditors Committee objected to the the Motion.  The Debtors argue that the Motion is speculative because ithe NMB has not made a determination, there has been no election, there is no certification of the CWA as the PSAs’ representative, and a collective bargaining agreement has not been negotiated. Moreover the Debtors argue that section 1113 does not apply where a CBA does not currently exist and may never exist.  In addition, the Debtors allege several procedural defects in the Motion such as the failure to commence an adversary proceding to obtain injunctive relief.    Similarly, the Committee argues that the procedural and substantive protections of section 1113 do not prevent an employer from changing the terms of employment before a collective bargaining agreement has been entered into.  In addition, the Committee argues that the Debtors have not interfered with the election.

The majority of the hearing focused on whether the this Court could compel the Debtors to provide the names and addresses of the PSAs.  The Ad Hoc Committee argued that this was a miniesterial function and it was improper for the Debtors to refuse to comply.  The Debtors argued that they had commenced a proceeding in the District Court in Texas seeking a determination that the NMB relied on improper information in ordering the election and that they should not be compelled to perform any task until that issue is resolved.  The Ad hoc committee responded that this was self-help in violation of the RLA.

The Court asked for additional submissions from the Debtors in response to the Ad Hoc Committee’s request that the Debotrs be compelled to provide addresses for the vote.  The Ad Hoc Committee first raised this issue in reply pleading, and the Debtors had not responded in writing yet.  The Debtors’ submission is due Tuesday, May 15, 2012 at 5:00 p.m. and the Court stated that it will issue a bench ruling thereafter.

The American Association of Pilots also filed a response and limited objection.  While the Pilots did not take any position about whether the PSAs may invoke and enforce any rights against the Debtors under the RLA, the Pilots contend that section 1113 only applies to collective bargaining agreements and does not apply when there is no such agreement in place.  The APA filed a pleading maintaining this legal position in a separate but related adversary proceeding.  The Pilots there argued that because their collective bargainging agreement had expired pre-petition the procedures of section 1113 were inapplicable, and that the Pilots rights under their agreement were goverened by labor law. On April 20, 2012, the Court ruled in favor of the Debtors finding that, under the RLA, the Pilots’ CBA became amendable but did not expire.  The Pilots appealed that decision and the appeal is currently pending.

Lowenstein Sandler PC
Sharon Levine, Esq.
Jason Teele, Esq.
Tania Ingman, Esq.