Mediator: Jack Kane
TWU Contract Negotiations Communication Update Sixth Mediation Session
5/7/2010 through 5/8/2010
Dallas, Texas
Technical Specialist Negotiating Committee: Howard McKinney, Gary Moffitt, Steve Luis, and Don Videtich
AA Negotiating Committee: Jim Weel, John Shelburg, Mark Tichenor, Ken Durst, Jim Ream and Mark Easton
Tentative Agreement Reached
The following is a brief outline of substantial changes, it is not, nor is it intended to be all-inclusive. Over the next several days we will be writing and making available for your review, the full text contractual language for all open articles.
ARTICLE 3 – HOURS OF WORK
• Current Book and retain LOA on 4/10s
ARTICLE 4 – COMPENSATION
• Structural increase of 3.0% on 5/5/10
• Structural increase of 1.5% on 5/5/11
• Structural increase of 1.5% on 5/5/12
• Increase Line Premium from $0.55/hr to $2.55/hr eff. 5/5/10 • Add a MCT Premium of $1.00/hr eff. 5/5/10
• New Profit Sharing (Continental match)
o 15% of pre-tax income excluding special, unusual and non-recurring items (1st dollar).
O The above percentage will create a fund from which awards are distributed to all participating employees. Individual awards will be distributed March 15 of the following year. Payments are not pensionable. Each employee’s award will be determined by the percentage of their earnings relative to overall payroll participants.
O This plan replaces the existing profit sharing the financial component of the AIP.
ARTICLE 5 – SHIFT DIFFERENTIAL
• Current book, with the exception of increasing test hop insurance from $100K to $200K.
ARTICLE 6 – OVERTIME
• Current book
ARTICLE 7 – HOLIDAYS
• Increase the number of holidays from 5 to 8.
• Increase the holiday work rate from 1.5x to 2.0x
• Modify holiday provision from “automatically off” unless required, to “automatically required”
ARTICLE 8 – VACATIONS
• Provide two (2) “personal days” effective DOS (payable and accumulated in hours based on work schedules and status).
O Jointly create procedures for the selection and utilization of these hours within ninety (90) days from date of signing.
O Allow the employee to receive pay in lieu of taking the “personal days”.
Unused days will be paid out as eight (8) hours for full time and four (4) hours for part time (as of your status on 12/31) by January 31st of the following year.
• Employee must have one year of company service as of December 31 for use in the following year.
• Modify Article 8(a)(2) table to reflect two (2) weeks for those employees with less than five (5) years of service.
ARTICLE 34 – SICK LEAVE
• Increase the SK leave accrual rate from five (5) days per year to eight (8) days (2/3 day/month) per year effective January 1, 2011. Increase maximum accumulation of sick time from 180 days to 250 days for Technical Specialists. Tied to Article 41 proposal.
ARTICLE 40 – PENSION
• CURRENT EMPLOYEES – NO CHANGES
• NEW HIRES – Defined contribution plan in lieu of participation in the defined benefit plan to include the following.
O Following one year of eligibility service, the employee will receive an automatic 2.5% Company contribution based on qualified pensionable earnings as defined under the defined benefit plan with no employee contribution required.
O Following one year of eligibility service, the Company will match employee contributions on a dollar for dollar basis for all contributions above the employee 2.5% contribution up to a maximum of 3.0% such that Company contribution does not exceed 5.5%.
o Terms of the Defined Contribution plan (DC) will be no less favorable than those offered to management.
ARTICLE 41 – BENEFITS
• Create a joint committee to explore the formation of a Voluntary Employee Beneficiary Association (VEBA) Trust for Retiree Medical to be administered by the TWU.
• Current retirees:
o No change to current plans.
• Current employees age 50 or older; with either 120 months of pre-funding or who opted into pre-funding when first eligible as of DOS:
o No change to current plans.
• Current employees age 49 and younger as of DOS:
o Allow employees to fund Under 65 retiree medical coverage with sick bank hours at a rate of twenty (20) hours per month of coverage for themselves and all eligible dependents. (See Article 34 for Sick Leave Enhancement) o Employee pre-funding does not apply.
O If sick bank is insufficient to provide medical coverage until the retiree’s need for medical coverage ends, retiree will pay monthly premiums to maintain retiree medical coverage at the same rate as other groups that are post funding for retiree medical coverage at that time. (Current post funding rate is 25% of cost).
O Includes medical coverage for spouse and dependent children until the employee is or would have been 65, if the spouse is covered as an eligible dependent at the time of retirement or death of the retiree. Spouse and dependent coverage ends when the spouse becomes Medicare eligible.
O TWU will have ability to review and validate plan every three (3) years.
O The company will evaluate the sick hour to medical cost ratio every three (3) years and adjust the sick hours required for one month of medical coverage in accordance for future retirements.
O After age 65, a guaranteed issue, employee paid Medigap plan will be available in lieu of the current over 65 plan.
O Employer prefunding contributions will cease date of signing.
O The Company and TWU will establish a joint committee as soon as possible to explore rollover options for employee prefunding balances. Absent an option identified, active prefunding balances will be refunded by 12/15/2010.
o Eliminate the $25 per Sick day payout upon retirement.
O Under both options plan design will be the same as management, which includes preventive care in network.
O Increase medical maximum from $300,000 to $500,000.
• Employees Hired After Date of Signing:
o Under Age 65 Plan
- Employee pre-funding does not apply.
- Allow employee to fund Under 65 retiree medical coverage with sick bank hours at a rate of twenty (20) hours per month of coverage for self and all eligible dependents.
- If sick bank is insufficient to provide medical coverage until the retiree’s need for medical coverage ends, retiree may pay premiums to maintain retiree medical coverage. The premiums will be actuarially based on family status and age bands at retiree’s expense.
O Over Age 65 (Eligible for Medicare coverage) Plan
- After age 65, a guaranteed issue, employee paid Medigap plan will be available in lieu of the current over 65 plan.
ARTICLE 42 – JOB SECURITY
• Current book
ARTICLE 47 – DURATION OF AGREEMENT
• Duration of Agreement is 5/5/10 plus 36 months (5/5/13).
• Either party may elect to open the agreement six (6) months prior to amendable date.
MISCELLANEOUS
The parties agree to enter into subsequent negotiations relative to the movement of the MOC operation to SOC. Topics to include but not limited to: • Relocation Allowance
• Integration of Work
All full text Tentative Agreements can be viewed at this web-site address: http://aa.twu.org/tentativeagreements/tentative.asp .
We’d like to thank you for your patience and support during what has been a long and difficult process. We will keep you informed as final language is developed and the ratification voting process is finalized. The TWU International has emphasized to us your vote counts.
Fraternally,
Howard McKinney and Gary Moffitt