Law passed on DEC 26th 2007 that protects pilots during a merger/acquisition

Beetle007

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Text of H.R. 2764: Consolidated Appropriations Act, 2008


SEC. 117. LABOR INTEGRATION. (a) LABOR INTEGRATION- With respect to any covered transaction involving two or more covered air carriers that results in the combination of crafts or classes that are subject to the Railway Labor Act (45 U.S.C. 151 et seq.), sections 3 and 13 of the labor protective provisions imposed by the Civil Aeronautics Board in the Allegheny-Mohawk merger (as published at 59 C.A.B. 45) shall apply to the integration of covered employees of the covered air carriers; except that--
  • (1) if the same collective bargaining agent represents the combining crafts or classes at each of the covered air carriers, that collective bargaining agent's internal policies regarding integration, if any, will not be affected by and will supersede the requirements of this section; and
    (2) the requirements of any collective bargaining agreement that may be applicable to the terms of integration involving covered employees of a covered air carrier shall not be affected by the requirements of this section as to the employees covered by that agreement, so long as those provisions allow for the protections afforded by sections 3 and 13 of the Allegheny-Mohawk provisions.
(b) DEFINITIONS- In this section, the following definitions apply:
  • (1) AIR CARRIER- The term `air carrier' means an air carrier that holds a certificate issued under chapter 411 of title 49, United States Code.
    (2) COVERED AIR CARRIER- The term `covered air carrier' means an air carrier that is involved in a covered transaction.
    (3) COVERED EMPLOYEE- The term `covered employee' means an employee who--
    • (A) is not a temporary employee; and
      (B) is a member of a craft or class that is subject to the Railway Labor Act (45 U.S.C. 151 et seq.).
    (4) COVERED TRANSACTION- The term `covered transaction' means--
    • (A) a transaction for the combination of multiple air carriers into a single air carrier; and which
      (B) involves the transfer of ownership or control of--
      • (i) 50 percent or more of the equity securities (as defined in section 101 of title 11, United States Code) of an air carrier; or
        (ii) 50 percent or more (by value) of the assets of the air carrier.
(c) APPLICATION- This section shall not apply to any covered transaction involving a covered air carrier that took place before the date of enactment of this Act.
(d) EFFECTIVENESS OF PROVISION- This section shall become effective on the date of enactment of this Act and shall continue in effect in fiscal years after fiscal year 2008.
 

Beetle007

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The above law provides the protections of sections 3 and 13 of the Allegheny-Mohawk Merger. Therefore, the following protections apply to all "covered" labor groups involved in a merger.

Section 3. Insofar as the merger affects the seniority rights of the carriers employees, provisions shall be made for the integration of seniority lists in a fair and equitable manner, including, where applicable, agreement through collective bargaining between the carriers and the representatives of the employees affected. In the event of failure to agree, the dispute may be submitted by either party for adjustment in accordance with section 13.

Section 13. (a) In the event that any dispute or controversy (except as to matters arising under section 9) arises with respect to the protections provided herein which cannot be settle by the parties within 20 days after the controversy arises, it may be referred by any party to an arbitrator selected from a panel of seven names furnished by the National Mediation Board for consideration and determination. The parties shall select the arbitrator from such panel by alternatively striking names until only one remains, and he shall serve as arbitrator. Expedited hearings and decisions will be expected, and a decision shall be rendered within 90 days after the controversy arises, unless an extension of time it is mutually agreeable to all parties. The salary and expenses of the arbitrator shall be borne equally by the carrier and (i) the organization or organizations representing employee or employees or (ii) if unrepresented, the employee or employees or group or groups of employees. The decision of the arbitrator shall be final and binding on the parties.
(b.) The above condition shall not apply if the parties by mutual agreement determine that an alternative method for dispute settlement or an alternative procedure for selection of an arbitrator is appropriate in their particular dispute. No party shall be excused from complying with the above condition by reason of having suggested an alternative method or procedure unless and until that alternative method or procedure shall have been agreed to by all parties.

 

Lc130driver

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Sect. 13
b.) The above condition shall not apply if the parties by mutual agreement determine that an alternative method for dispute settlement or an alternative procedure for selection of an arbitrator is appropriate in their particular dispute. No party shall be excused from complying with the above condition by reason of having suggested an alternative method or procedure unless and until that alternative method or procedure shall have been agreed to by all parties.


If you read the above paragraph, it only applies if they can't come to an agreament. I think Southwest will only buy F9 if and only if the employee groups agree to there terms. Southwest already in there press release indicated they will hire F9 employees on a need basis.

So from what it looks like Southwest will hire F9 pilots, when Southwest needs them. Which is the worst evil Southwest or Republic? Time will only tell.
 

Beetle007

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The bidding for Frontier closes August 3rd. I doubt the Frontier pilots will come to an agreement by the end of the weekend as a condition of the purchase by SWA.

They just don't have time to negotiate labor integration prior to the purchase. Any agreement post-purchase will put the Frontier pilots in a position to force an arbitrator to decide what is fair and equitable.

That being said, I think fair and equitable would be very close to a staple.
 

krewmeel

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The bidding for Frontier closes August 3rd. I doubt the Frontier pilots will come to an agreement by the end of the weekend as a condition of the purchase by SWA.

They just don't have time to negotiate labor integration prior to the purchase. Any agreement post-purchase will put the Frontier pilots in a position to force an arbitrator to decide what is fair and equitable.

That being said, I think fair and equitable would be very close to a staple.

There will be no arbitration, if it gets that far then WN said they will walk.
 

SkiFishFly

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SWA is buying F9 (assets) out of bankruptcy. They hold all the leverage.
Remember SWA bought ATA assets out of bankruptcy and look what ultimately happened to them.
 

mynameisjim

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Good thing the Southwest pilots will stick up for whomever their company buys. They have a great track record from the past. /s/
 

Beetle007

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SWA is buying F9 (assets) out of bankruptcy. They hold all the leverage.
Remember SWA bought ATA assets out of bankruptcy and look what ultimately happened to them.
(4) COVERED TRANSACTION- The term `covered transaction' means--
  • (A) a transaction for the combination of multiple air carriers into a single air carrier; and which
    (B) involves the transfer of ownership or control of--
    • (i) 50 percent or more of the equity securities (as defined in section 101 of title 11, United States Code) of an air carrier; or
      (ii) 50 percent or more (by value) of the assets of the air carrier.
 

Beetle007

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Remember SWA bought ATA assets out of bankruptcy and look what ultimately happened to them.
Actually, SWA bought ATA "AS A WHOLE" according to the bankruptcy judge. As part of buying ATA, SWA even obtained the ATA operating certificate.

I was really surprised the ATA pilots never filed a petition with the NMB for single-carrier status of ATA and SWA! Worst case is that the NMB could have rejected the petition so I think it was incompetent of ALPA not to at least file the petition.
 

tzflyer

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It is my understanding that the ATA MEC signed away all seniority rights with the certificate and agreed to drop the existing Single Carrier petition with World Airways a week or two before SW bought it, all for a small sum of money for the ATA guys. ooops.
 

mt2

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Actually, SWA bought ATA "AS A WHOLE" according to the bankruptcy judge. As part of buying ATA, SWA even obtained the ATA operating certificate.

I was really surprised the ATA pilots never filed a petition with the NMB for single-carrier status of ATA and SWA! Worst case is that the NMB could have rejected the petition so I think it was incompetent of ALPA not to at least file the petition.
This happened as part of the LGA slot purchase, long after ATA had ceased operations. OTOH, signing away the single carrier petition with World was a big oops.
 

HalinTexas

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ATA did NOT give up the single integration list with WAH. In fact they did not even think of pursuing it until just prior to Ch. 7. SWA surrendered their interest in ATA in Dec. of 2005 to Matlin-Patterson. They bought the ATA cert. after the 2008 liquidation. Labor had no say in the matter.

On a related note. I spoke with one ex-ATA guy working overseas and he told me that an individual bought 3 L1011's for less than $2M in BK. They're doing Haj flights, now.

In April 2007, after MP bought WAH, I was one of the minority yelling that a SIL needed to be implemented immediately. ATA-ALPA, N. A. and World didn't think it necessary and didn't want it, respectively. I was of the mind that NA would get carved off first. Silly me. Should be more like SWAPA and not care about the profession, just myself.
 
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Ty Webb

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SWA is buying F9 (assets) out of bankruptcy. They hold all the leverage.
Remember SWA bought ATA assets out of bankruptcy and look what ultimately happened to them.

They're not buying assets, they're buying a functioning airline, if the press releases are to be believed. The ATA deal was done differently- As I recall, SWA bought some assets, mainly MDW gates, a gave them some cash, and a deal to do some feed for SWA. . . . I'm sure some ATA guys on here can give us the painful details.
 

Splert

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What everone is missing is that nothing in the legislation requires an airline which purchases another to merge the airlines together.

If SWA wants to operate the company as a wholly owned subsidary they can and the same with Republic.
 

Cometman

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What everone is missing is that nothing in the legislation requires an airline which purchases another to merge the airlines together.

If SWA wants to operate the company as a wholly owned subsidary they can and the same with Republic.
Finally a correct statement. I agree with you 100%. SWA can do whatever it wants with Frontier after they buy it. All the legislation says is if they merge the operation they have requirments to meet.
 

BeachBummer

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Finally a correct statement. I agree with you 100%. SWA can do whatever it wants with Frontier after they buy it. All the legislation says is if they merge the operation they have requirments to meet.
Right, so like ATA they will buy rearrange and then disolve what is not useful. SWA doesn't want the planes or the people, at least I wouldn't think they would. They want the structure that holds that stuff up.

I have a hard time seeing this as anything but bad for the employees of Frontier.

Good Luck
 

Cometman

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Right, so like ATA they will buy rearrange and then disolve what is not useful. SWA doesn't want the planes or the people, at least I wouldn't think they would. They want the structure that holds that stuff up.

I have a hard time seeing this as anything but bad for the employees of Frontier.

Good Luck
I disagree. Since this is much more than ATA I think they will offer a staple and to encourage the F9 pilots to agree they will throw in the pay freeze. Since it will take time for SWA to get rid of the AB and replace them with the 737 it only makes sense to keep them on. As long as they have their SWA number they can come over as each AB leaves and replaced with a 737. The Denver Base lock will help them in the transition. It will not hurt SWA since they cannot fly the AB. That will be more than any F9 would expect. Remember, they are being auctioned off. They could be out on the street.
 

gt1900

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I would be willing to bet that SWA will buy F9. Operate them as two seperate company's, and slowly kill off F9. There won't be a merger, just SWA getting rid of its competition on its own terms, and taking the routes and gates as they see fit. F9 guys will get pref interviews at SWA when SWA starts hiring, but very few will get hired. Eventually SWA will just shut F9 down completely and sell off the assets they don't need.
 

PCL_128

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SWA is buying F9 (assets) out of bankruptcy. They hold all the leverage.
Not really. Another offer is on the table (Republic), and they have already said that Frontier would be operated as a separate entity. Hence, no SLI screw-job for the F9 pilots. The IBT argues that an SLI would be required, but Bedford can easily purchase F9 on his own with his own money and that of other investors rather than using RAH funds to get around the IBT language, since he has no plans for operational integration anyway. The way I see it, the F9 pilots are much better off in that situation rather than putting themselves at the mercy of SWAPA and SWA management.
 

BeachBummer

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I disagree. Since this is much more than ATA I think they will offer a staple and to encourage the F9 pilots to agree they will throw in the pay freeze. Since it will take time for SWA to get rid of the AB and replace them with the 737 it only makes sense to keep them on. As long as they have their SWA number they can come over as each AB leaves and replaced with a 737. The Denver Base lock will help them in the transition. It will not hurt SWA since they cannot fly the AB. That will be more than any F9 would expect. Remember, they are being auctioned off. They could be out on the street.
Hope you are right my friend...
 
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