June 17, 2011
This week, the ATN MEC Merger Committee (MC) continued SLI talks at the SWAPA offices in Dallas, with the SWAPA M&A Committee. Joining the two committees on Wednesday, for a detailed briefing on the status of Southwest’s transition and post-integration plans, were Southwest VP of Labor & Employee Relations, Joe Harris, SWA Senior Director of Crew Operations and Employee Resources, Russell McCrady, and SWA Manager of Crew Planning, Steve Jones.
In addition to the briefing, your MC responded to a proposal made by SWAPA last week, with an ISL counterproposal, to which SWAPA representatives responded, on Wednesday afternoon, with a counterproposal of their own. Questions and discussions regarding the proposals were extensive, and at times, spirited. But while there are clear dissimilarities in the positions of each side, the atmosphere of the negotiations remains friendly, some gaps have closed, and the parties continue their good faith efforts to bridge their differences.
As SLI talks continue, MC members are asked more and more often if a list constructed according to “Formula XYZ” is the best or worst we might expect in the event the ISL is decided through arbitration. But instead of predicting a specific outcome, a mistake other merger committees have made, which has proven them to be less than psychic, the MC has briefed the MEC on a range of best and worst-case arbitration scenarios, and possibilities in between. These potential outcomes vary widely, from very good to very bad. When considering arbitration results, it’s also worth remembering that unlike court rulings, arbitration awards do not carry the authority of precedent. That means arbitrators aren’t bound by examples of other recent cases, and are instead free to shape an award that best fits the unique circumstances of that particular merger. As arbitrator George Nicolau said in his 1990 ISL award in the FedEx-Flying Tigers merger:
“There are four basic lessons to be learned…; Each case turns on its own facts; that the objective is to make the integration fair and equitable; that the proposals advanced by those in contest rarely meet that standard; and that the end result, no matter how crafted, never commands universal acceptance.”
In short, the results of binding arbitration are largely unpredictable. In addition, one can’t ignore recent “binding” ISL arbitrations, which are being challenged in court by one party or another, such as the US Airways/America West case and more recent Frontier/Republic award. Taken together, it simply means that both the results and implementation schedule of an arbitrated ISL can be less than certain.
As for the talks themselves, SLI negotiations resume in Dallas on Wednesday, July 6, with a presentation from Southwest management. Next week, the MC resumes work in Atlanta, with a special emphasis on conducting briefings and updates for the MEC, P2P Members, and the pilot group at large. In the meantime, we encourage you to continue sending your merger-related questions and concerns to
[email protected], and visit
www.atnmerger.alpa.org for the latest merger news and information.