The Debtors filed a motion seeking to approve the memoranda of understanding among certain of the Debtors, US Airways, Inc. and any successor (“US Airways”) and the various unions representing the employees of the Debtors and US Airways. The memoranda of understanding address the effect of the expected merger between American and U.S. Airways. With regard to the TWU, the memorandum of understanding (the “MOU”) provides as follows:i. New CBA Modifications. Upon the effective date of the merger, the terms and conditions of the new collective bargaining agreements of the seven TWU-represented workgroups that were previously approved by the Bankruptcy Court on June 28, 2012 and September 12, 2012, respectively, will continue to remain in full force and effect, except that:
(a) each TWU-represented employee will receive a 4.3% increase in hourly base wage rates above those provided in the new collective bargaining agreements in accordance with the table attached as Exhibit A to the TWU MOU; and
(b) certain letters of memorandum, which generally provide for profit sharing and “Me Too” protections will terminate and be of no further force or effect;
ii. Single Carrier/NMB. For each of the seven TWU-represented workgroups, the TWU shall file a single carrier application with the National Mediation Board no later than six months after the effective date of the Plan. If the single-carrier application results in the certification of the TWU as representative of any of the workgroups, the TWU and New AAG shall commence negotiations to achieve a joint collective bargaining agreement as soon as practicable.
iii. Integration.
a. As soon as possible after the Plan’s effective date, the TWU intends to and will offer the employee representatives a proposal for the integration of the seniority lists of each of the (1) fleet service employees, (2) maintenance control technician employees, (3) M&R employees, and (4) stock clerk employees. If the employee representatives and TWU agree on an integration seniority list, New AAG shall accept such list so long as certain specified conditions are satisfied. If the TWU and the employee representatives do not agree on an integration seniority list for any of these four groups within 120 days following the Effective Date, either New AAG or TWU may initiate an arbitration proceeding.
b. Because the TWU represents the remaining work groups ((1) dispatchers, (2) flight simulator technicians, and (3) ground school and simulator instructors) at both pre-Merger American and pre- Merger Airways, seniority integration for such employees will be determined according to TWU’s internal procedures. The TWU will complete such seniority integration process within 120 days after the Plan’s effective date. New AAG shall accept the resulting list so long as it satisfies certain specified conditions.
iv. “Me Too Letters.” The April 26, 2012 Me Too letters and the July 10, 2012 Me Too letters between AA and TWU executed in connection with the new collective bargaining agreements shall expire and have no force or effect upon the Plan effective date, subject to a limited reservation of rights. The Me Too letters generally provide protection to the employees represented by TWU against the possibility that other employee groups would negotiate more favorable terms than those contained in the agreements approved by the Court.
The Debtors state the MOUs are the product of good faith arm’s length negotiations among the parties. The Debtors represent that the Debtors and their stakeholders have a compelling interest in achieving a successful integration of the airlines, and that the MOUs position the Debtors to achieve those goals.