APA Legal Update
This past month, your APA General Counsel has received three letters from Marty Harper, attorney for a class of former America West pilots who have threatened legal action in the event that APA does not recognize the decision by Arbitrator George Nicolau regarding the US Airways-America West seniority integration list. Mr. Harper sent similar letters to counsel for US Airways and counsel for the US Airline Pilots Association (USAPA).
These letters threaten legal action on the basis that the seniority list finalized in arbitration (“Nicolau Award”) between the former America West (“West”) and the US Airways (“East”) pilots was to go into effect upon the date of ratification of a single collective bargaining agreement involving the West and East pilots, all of whom are currently represented by USAPA. Mr. Harper contends that the Memorandum of Understanding/Merger Transition Agreement (MOU/MTA) that American, US Airways, USAPA and APA signed concerning the potential merger constitutes a single collective bargaining agreement between East and West, and therefore the failure to include the Nicolau Award in an integrated seniority list would constitute a breach of USAPA’s duty of fair representation to the pilots it represents. During the past few years, this matter has been intensively litigated among the East and West pilots and US Airways. One aspect of the case is currently on appeal to the United States Court of Appeals for the Ninth Circuit. In response to the various letters from Mr. Harper on behalf of the West pilots, USAPA has filed what is known as an Adversary Proceeding in the Bankruptcy Court seeking to enjoin the West pilots from contesting the merger. In response to this lawsuit, the West pilots filed a complaint on March 7 against USAPA and US Airways, Inc. seeking to have a court declare that the Nicolau Award be enforced. They indicated that they intend to file for expedited injunctive relief. APA takes no position on the merits of the dispute between the former East and former West pilots. However, APA has no wish to inherit this dispute in the event of a merger and will push to have it resolved between Mr. Harper’s group and USAPA. Importantly, the seniority integration process in which APA will take part in the event of a merger has not even begun; this timeline is only triggered by the date of American Airline’s exit from bankruptcy (“effective date”), which is determined by the court’s approval of the plan of reorganization (“POR”).
The process is as follows: within 30 days of the effective date of the merger, the timeline for the seniority integration process will begin. APA and USAPA will negotiate and approve a seniority integration protocol agreement that will establish the rules of engagement for the upcoming integration negotiations process. Within 90 days of the effective date, direct negotiations between the two unions will begin. If after 90 days of the effective date there is no agreement on an integrated seniority list, a panel of three arbitrators will be selected under the McCaskill-Bond statute to seek an arbitrated solution. Within 60 days of the arbitration panel being selected, but not before approval of a new joint collective bargaining agreement, the seniority arbitration will commence. The MOU stipulates that the conclusion of seniority integration must be completed within 24 months of the effective date. While we do not yet have an effective date regarding the bankruptcy POR, the expectation is that a POR will be submitted and approved sometime during the third quarter of this year, which will likely mean that we will not have an integrated seniority list for at least 24 to 30 months from today. Until that time, both parties will abide by the specific seniority protections specified in the MOU/MTA.
In summary, due to the lengthy seniority integration timeline that hasn’t yet begun, as well as the numerous factors involved in the court’s approval of a POR, it is far too early for APA to comment on the effect of arbitrating the seniority integration issue based on the seniority lists put forth by USAPA and the West pilots. In the end it is our hope that this issue will be resolved to both parties’ satisfaction so that we can proceed to finding a mutually acceptable solution to a joint integrated seniority list.
