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Judge seeks avenues to end dispute at Mesaba
Union attorneys stressed the need to resume talks. But Mesaba insisted the unions refuse to accept 19.4% cuts in labor costs.
Liz Fedor, Star Tribune Last update: June 27, 2006 – 11:45 PM
In open court Tuesday, U.S. Bankruptcy Judge Gregory Kishel asked union lawyers what would happen if he denied Mesaba Airlines' motion to throw out three labor contracts and sent the parties back to the negotiating table.
It was an unexpected development, but it allowed attorneys for the pilots, flight attendants and mechanics to express their frustration with the lack of progress in reaching concessionary labor deals.
"The pilots have no interest in the liquidation of this airline," pilots' attorney James Linsey told Kishel in his Minneapolis courtroom. Linsey and attorneys for the mechanics and flight attendants also said they want to resume bargaining and reach pacts that their members can ratify.
"We think [a deal] is there to be had right now," said Rob Clayman, an attorney for the Association of Flight Attendants (AFA), referring to proposed cutbacks.
On procedural grounds, Kishel denied Mesaba's first motion to reject its labor contracts on May 18.
The airline renewed its motion on June 12. If Kishel grants it, management could void current labor contracts and impose pay rates and work rules.
"We've been bargaining with these unions since December," Mesaba attorney Ken Hipp told Kishel. He argued that the company has met the legal standards to prove that the company needs 19.4 percent in labor savings in six-year contracts, but the unions have resisted those targets.
"It is very clear-cut," Hipp said. As he was about to leave the podium and return to his seat, Kishel said to Hipp: "Wait a minute. I have a few questions for you."
Kishel said that Mesaba had made a strategic decision to withhold a financial model from the unions that was used to set the 19.4 percent labor savings target. The unions did not receive the model until after the first hearing concluded March 24, and the judge noted that now the unions have cited flaws in the model and argue that only smaller cutbacks of 8 percent are justified.
"The 19.4 percent has been a real sticking point" in getting deals and resolving the labor conflicts, Kishel said. Hipp responded that the first financial model "has nothing to do with this particular proceeding," and he said a new analysis legitimizes the company's need for 19.4 percent in cutbacks.
Hipp and attorney Cynthia Surrisi, of the Marr, Hipp law firm in Honolulu, are playing dual roles for Mesaba. Hipp has been negotiating with the pilots, while Surrisi has been bargaining with the flight attendants and mechanics. They also have been questioning witnesses in the courtroom as they make Mesaba's case to void the labor contracts.
In individual interviews, representatives for the three unions said the fact that Hipp and Surrisi are playing dual roles as litigator-negotiator has impaired the ability of the unions and airline to reach consensual agreements.
David Borer, general counsel for the Association of Flight Attendants, said it is "unprecedented" to use the same attorneys to bargain, where common ground is the goal, as well as to litigate, where a legal victory is the goal in an adversarial proceeding.
Union leaders said more time has not been spent at the bargaining table because Mesaba has chosen to spend so much time on litigation.
In a Mesaba court filing, the airline said that it negotiated with the flight attendants union for 9.5 hours between March 24 and June 12, while management spent 12 hours bargaining with the mechanics union. Mesaba also said that during the same period, it had numerous meetings with the pilots union, including 17 days of mediated sessions.
Tom Wychor, chairman of the pilots' union, was blunt in his assessment of Surrisi and Hipp serving as litigators and negotiators. "It guarantees one thing -- more billable hours for the law firm."
In a bankruptcy-court filing, Mesaba reported that the Marr, Hipp law firm billed the airline for $1.4 million in legal services and expenses for January through March.
"We have full confidence in our legal team as far as their professionalism in the courtroom and at the negotiating table," said Mesaba spokeswoman Elizabeth Costello. "We can't afford to have separate sets of legal teams to come in to handle various types of issues."
Mechanics' attorney Nick Granath said, "For the carrier to survive, we need employee buy-in. We cannot get that with an imposed agreement." But Hipp said the unions remain "obdurate" in their opposition to 19.4 percent cuts.
Liz Fedor • 612-673-7709
http://www.startribune.com/535/story/519632.html
Union attorneys stressed the need to resume talks. But Mesaba insisted the unions refuse to accept 19.4% cuts in labor costs.
Liz Fedor, Star Tribune Last update: June 27, 2006 – 11:45 PM
In open court Tuesday, U.S. Bankruptcy Judge Gregory Kishel asked union lawyers what would happen if he denied Mesaba Airlines' motion to throw out three labor contracts and sent the parties back to the negotiating table.
It was an unexpected development, but it allowed attorneys for the pilots, flight attendants and mechanics to express their frustration with the lack of progress in reaching concessionary labor deals.
"The pilots have no interest in the liquidation of this airline," pilots' attorney James Linsey told Kishel in his Minneapolis courtroom. Linsey and attorneys for the mechanics and flight attendants also said they want to resume bargaining and reach pacts that their members can ratify.
"We think [a deal] is there to be had right now," said Rob Clayman, an attorney for the Association of Flight Attendants (AFA), referring to proposed cutbacks.
On procedural grounds, Kishel denied Mesaba's first motion to reject its labor contracts on May 18.
The airline renewed its motion on June 12. If Kishel grants it, management could void current labor contracts and impose pay rates and work rules.
"We've been bargaining with these unions since December," Mesaba attorney Ken Hipp told Kishel. He argued that the company has met the legal standards to prove that the company needs 19.4 percent in labor savings in six-year contracts, but the unions have resisted those targets.
"It is very clear-cut," Hipp said. As he was about to leave the podium and return to his seat, Kishel said to Hipp: "Wait a minute. I have a few questions for you."
Kishel said that Mesaba had made a strategic decision to withhold a financial model from the unions that was used to set the 19.4 percent labor savings target. The unions did not receive the model until after the first hearing concluded March 24, and the judge noted that now the unions have cited flaws in the model and argue that only smaller cutbacks of 8 percent are justified.
"The 19.4 percent has been a real sticking point" in getting deals and resolving the labor conflicts, Kishel said. Hipp responded that the first financial model "has nothing to do with this particular proceeding," and he said a new analysis legitimizes the company's need for 19.4 percent in cutbacks.
Hipp and attorney Cynthia Surrisi, of the Marr, Hipp law firm in Honolulu, are playing dual roles for Mesaba. Hipp has been negotiating with the pilots, while Surrisi has been bargaining with the flight attendants and mechanics. They also have been questioning witnesses in the courtroom as they make Mesaba's case to void the labor contracts.
In individual interviews, representatives for the three unions said the fact that Hipp and Surrisi are playing dual roles as litigator-negotiator has impaired the ability of the unions and airline to reach consensual agreements.
David Borer, general counsel for the Association of Flight Attendants, said it is "unprecedented" to use the same attorneys to bargain, where common ground is the goal, as well as to litigate, where a legal victory is the goal in an adversarial proceeding.
Union leaders said more time has not been spent at the bargaining table because Mesaba has chosen to spend so much time on litigation.
In a Mesaba court filing, the airline said that it negotiated with the flight attendants union for 9.5 hours between March 24 and June 12, while management spent 12 hours bargaining with the mechanics union. Mesaba also said that during the same period, it had numerous meetings with the pilots union, including 17 days of mediated sessions.
Tom Wychor, chairman of the pilots' union, was blunt in his assessment of Surrisi and Hipp serving as litigators and negotiators. "It guarantees one thing -- more billable hours for the law firm."
In a bankruptcy-court filing, Mesaba reported that the Marr, Hipp law firm billed the airline for $1.4 million in legal services and expenses for January through March.
"We have full confidence in our legal team as far as their professionalism in the courtroom and at the negotiating table," said Mesaba spokeswoman Elizabeth Costello. "We can't afford to have separate sets of legal teams to come in to handle various types of issues."
Mechanics' attorney Nick Granath said, "For the carrier to survive, we need employee buy-in. We cannot get that with an imposed agreement." But Hipp said the unions remain "obdurate" in their opposition to 19.4 percent cuts.
Liz Fedor • 612-673-7709
http://www.startribune.com/535/story/519632.html
