What does the Merger announcement mean for our TWU members?TWU work groups will continue to operate under the American Airlines collective bargaining agreements.
The Memorandum of Understanding (MOU) negotiated last month with American Airlines and US Airways will provide a wage increase of 4.3 percent over and above previously negotiated contract agreements for TWU represented crafts or classes, effective immediately upon the U.S. Bankruptcy Court approval of the merger and a plan of reorganization.
In addition, per the MOU, the equity grant and other contract settlement terms, as approved by the bankruptcy court, will be honored.
Now that the merger has been announced, what happens next with American and US Airways?
American will file a motion with the Bankruptcy Court for approval to enter into the merger agreement and US Airways will seek shareholder approval. Thereafter, a disclosure statement and plan of reorganization will be filed and the parties will move toward confirmation. The merger will become effective sometime after the confirmation of the plan of reorganization.
How will it affect our contract?
The USAirways/IAM and AA/TWU contracts respectively remain status quo or intact until a single contract can be negotiated. A joint collective bargaining agreement (JCBA) covering each craft or class will require harmonization of the existing agreements. Such negotiations will occur after the NMB declares the AA and US Airways to be a single carrier.
Do we anticipate any additional work being brought into Tulsa, DWH, or TAESL as a result of this merger?
While the two airlines work towards ‘single carrier’ along with a single operating (and maintenance) certificates, both the operating and maintenance certificates will have to be approved by the FAA. During this process, as well as the process of negotiating a single collective bargaining agreement, potential additions to work load will be discussed. The restrictions on outsourcing in our contract must be honored by the carriers both separately and when combined as a single carrier, until a joint agreement is entered into and ratified.
Do we anticipate any additional stations opening for our members?
As the two carriers proceed towards single carrier status, there will be ongoing bargaining to deal with the numerous operational issues which inevitably arise. During the process of dealing with these problems along with the harmonization discussions that will be part of the process of negotiating a joint collective bargaining agreement, opening of stations will be discussed.
When the merger happens will we get the contract US Airways has with their ground employees? Why not?
The declaration of a “merger” by the two companies does not create a single carrier. A single determination is made by the NMB following the submission of a “single carrier application” by a union and findings that “single carrier” criteria that the NMB applies are met (see criteria listed below). When the single carrier determination is made the surviving carrier will have the obligation to negotiate over a single agreement covering all employees in the craft or class. Until that time, the carrier must maintain the status
quo with respect to all workers covered by a collective bargaining agreement and our members will continue to be covered by the AA/TWU contracts.
The recent MOU between TWU and the Companies provides for a schedule designed to expedite the NMB single carrier process and negotiation of a JCBAs as well as of “transition planning agreements.” In this regard, paragraph 4 of the MOU states:
For each of the seven TWU-represented workgroups, the TWU shall file a single carrier application with the National Mediation Board as soon as it determines that the facts support the legal requirements for the filing of a petition following the Effective Date, but in no event later than six months after the Effective Date. The Parties, and each of them, shall support the application. If the single-carrier application results in the certification of the TWU as representative of any of the workgroups, the TWU and New American Airlines shall commence negotiations to achieve a joint collective bargaining agreement for such workgroup as soon as practicable following certification, but in no event later than 30 days after certification. The Parties also agree to negotiate the terms of a “transition planning agreement” to address issues related to the operational integration of each of the seven TWU-represented workgroups at American with their respective US Airways’ counterpart (including by way of example only, whether a “fence” is necessary or appropriate). The Parties shall use their best efforts to negotiate such an agreement as soon as reasonable and practical.
NOTE: the “Effective Date” is defined in the MOU as “the date that the American/US Airways [Plan of Reorganization] becomes effective.”
In approaching the JCBA negotiations – the so-called “harmonization process” — our first objective obviously should be to secure those rates, rules, and working condition at US Airways which are better than what we have, and to preserve those provisions of our agreement which are better. At present we have better pay, scheduled pay increases, and outsourcing protection while US Airways has better vacations, holidays, and sick benefits. We can seek through a single agreement to improve areas where our contracts were diminished during bankruptcy, while maintaining work and pay we fought hard to secure.
How long will it take for American and USAirways to become a single carrier?
We don’t know how long the process will take. However, each AA union agreed to facilitate the process, and there is every reason to do so in order to secure the advantages of harmonization. See above with regard to the process under the recent MOU.
How does the NMB determine when a carrier is a single carrier?
A “single carrier” determination by the National Mediation board (“NMB”) under the Railway Labor Act recognizes the integration of several carriers to a single major carrier. The determination reclassifies previously separate employee groups from different carriers as a single unit on one larger carrier. The unions can initiate a “single carrier” determination proceeding before the NMB. The two main criteria for the single carrier determination are whether the systems have “substantial integration of operations, financial control, and labor and personnel functions”. Delta/ Northwest Airlines (2009); and whether they have a substantial degree of overlapping ownership, senior management, and boards of directors”. Precision Valley Aviation, Inc. (1993).
Factors the NMB will consider as indicia of a “single carrier” transportation system include:
- is a combined schedule published?;
- how does the carrier advertise its services?;
- are reservation systems combined?;
- are tickets issued on one carriers’ stock?;
- do signs, logos and other publicly visible indicia indicate one carrier or more?;
- are personnel with public contact held out as employees of a single carrier?;
- are there indications of separate existence on planes and equipment?;
- are labor relations and personnel functions handled by one carrier?;
- are there common management, common corporate officers, and interlocking Boards of Directors?; and
- are separate identities maintained for corporate and other purposes?Trans World Airlines/Ozark Airlines 14 NMB 218, 236 (1987).
How does the Railway Labor Act apply to this process?
The RLA gives the surviving union the right to negotiate over how the old agreements apply to the merged group and which provisions from these agreements will be incorporated into a harmonized single agreement.
What happens while we are trying to get a harmonized agreement?
Until a single agreement is negotiated, the carrier must respect the status quo, which is our existing AA contract, together with the improvements – including the wage increase — set forth in the MOU.
What will happen to the seniority between the two merged carriers’ unions?
The MOU sets forth a process and schedule for integration of seniority lists. This process will comply with the terms of the MOU and the McCaskill –Bond Legislation, Public Law 110-161
Under McCaskill- Bond, a fair and equitable seniority integration process is required by groups affected by the combination of two or more airlines. The process requires that the unions involved attempt to negotiate “a fair and equitable” seniority integration. If this is not accomplished, the unions must submit the dispute to a final and binding arbitration. After conclusion of the arbitration, the Arbitrator will issue an award that contains a new single seniority list with both union groups fully integrated. However, where the affected groups are represented by the same union, a seniority integration is governed by a union’s internal merger procedures.
Under the MOU, the carrier “shall not implement the integrated seniority lists” for any group “until implementation” of the applicable JCBA for that group. The MOU contemplates the inclusion of “conditions or restrictions” as part of the integrated seniority list.
We will provide additional timely information on this subject as events develop.
How Can I Stay Informed on the Status of the Merger?
TWU will provide communication updates through the website, http://www.twubkfacts.org
Download a PDF copy here.