NWA FA Strike Blocked

[YourPilotFriend]

The bankruptcy judge has to protect the interests of the creditors above all else, while the company is under bankruptcy protection. The idea is to keep the company operating while the claims from the creditors are worked out.

It's called bankruptcy protection because it protects the debtor from the creditors. Apparently now in this system employees are also considered creditors. The system is FUBAR.

 

[Dodge]

filejw,
My apologies. I should have used mechanics only as the example and not the FA's. I am sorry. Is NWA in the list of boycotted companies in the ALPA mag?

ypf,
Employees are for sure creditors. Why do you think NWA and XJ are trying as hard as they can to rid themselves of those ever so costly employee contracts?

 

[HalinTexas]

The bankruptcy judge has to protect the interests of the creditors above all else, while the company is under bankruptcy protection.

The bankruptcy judge has ruled that he has no jurisdiction to enjoin a strike. This judge has ruled. There is no real case law to give him guidance.

The idea is to keep the company operating while the claims from the creditors are worked out.

ILFC cannot come repossess all their aircraft either. Bankers/credit card companies can't come in and lock up equipment and buildings. Unions are just like any other claiment. They cannot unilaterally withhold services.

However, ILFC does not need to lease aircraft under terms it has not agreed too. This is the process of bankruptcy. BK allows a carrier to break its lease contract with ILFC and enter into negotiations for new terms, if at the end of those negotiations there is no agreement on new leasing terms, then ILFC is free to repossess its aircraft. That's why you've never of an aircraft holding company repossessing all of their aircraft. They almost always renegotiate. If the company finds the terms too onerous, then they liquidate.

The union is not unilaterally withholding services, the union is responding to its contract being voided and having terms imposed on them they did not agree too. The judge can temporarily enjoin the union from taking any action that would jeapardize the outcome of the BK process.

Now, the company cannot just impose a contract. They have to make an honest effort to negotiate a deal. If not, then the judge has to make a call, but no judge has imposed a long term labor deal on any group.

This is the 1113 process that has already unfolded. However, the BK judge has also ruled that he has no jurisdiction to enjoin a strike. I think you are confusing the Bankruptcy Judge Gropper's rulings with a temporary injunction by a Federal District Judge Marrero, who has not ruled on the matter yet.

There is debate as to his authority to enjoin a labor group once the company is out of bankruptcy.

Correct, there is no debate that a bankruptcy judge has no authority to enjoin a strike outside of bankruptcy. As a matter of fact the bankruptcy judge in this case has already decided he has no jurisdiction to enjoin a strike even in bankruptcy. That's why it was appealed to a higher court. He basically is refusing to make a decision one way or the other. In the case of ATA's BK, Judge Lorch pretty much said he would impose the last agreed upon TA or the companies offer at least temporarily if no TA was reached. He gave no indication how that would stand after BK.

The quesiton arises, "When is the RLA superceded, and under what terms? Is an imposed contract covered under the RLA?" No labor group, least of all ALPA, has had the nerve to test the law.

EAL and CAL both struck when their contracts were voided even though they were both covered under the RLA. Not germain here. New law. The question is, does the creation of the 1113 process, which was designed to protect labor groups from the arbitrary rejection of their CBAs while a company is in BK, negate the right of a union to strike when their contracts have been rejected. I think that's what I said.

On the otherhand. I don't believe NWA will ever exit BK without agreements from all it's unions. The creditors will not sign off if there's no long term commitment from the unions, forced or otherwise. They may be limited in obtaining operating capital to exit BK. This would probably lead to a liquidation.





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Now, my advise is "Don't sign any long term agreements that you can't live with." Keep it short term, with some snap-backs at the amendability date.

 

[FDJ2]

Quote:
Originally Posted by HalinTexas
The bankruptcy judge has to protect the interests of the creditors above all else, while the company is under bankruptcy protection.

The bankruptcy judge has ruled that he has no jurisdiction to enjoin a strike. This judge has ruled. There is no real case law to give him guidance.

Which judge are you talking about? Gropper or Marrero? Gropper, the BK judge refused to enjoin a strike. NWA appealed, Marrero has yet to rule on the legality of a strike.


The idea is to keep the company operating while the claims from the creditors are worked out.

ILFC cannot come repossess all their aircraft either. Bankers/credit card companies can't come in and lock up equipment and buildings. Unions are just like any other claiment. They cannot unilaterally withhold services.

However, ILFC does not need to lease aircraft under terms it has not agreed too. This is the process of bankruptcy. BK allows a carrier to break its lease contract with ILFC and enter into negotiations for new terms, if at the end of those negotiations there is no agreement on new leasing terms, then ILFC is free to repossess its aircraft. That's why you've never of an aircraft holding company repossessing all of their aircraft. But they can if they choose too and that is the point. The Bankruptcy judge can not force a leasing company to lease its aircraft at rates or terms they do not agree to. Likewise, it is not a far stretch to imagine that employees would be forced to accept terms they do not agree to. They almost always renegotiate. And if they don't, they withhold their services, in the case of a leasing company, their aircraft.

The union is not unilaterally withholding services, the union is responding to its contract being voided and having terms imposed on them they did not agree too. The judge can temporarily enjoin the union from taking any action that would jeapardize the outcome of the BK process. Apparently the bankruptcy judge overseeing the NWA bvankruptcy sees it otherwise, he has refused to enjoin a strike. Smart move since the Norris-Laguardia Act prevents Federal Judges from Enjoining a strike.

Now, the company cannot just impose a contract. They have to make an honest effort to negotiate a deal. If not, then the judge has to make a call, but no judge has imposed a long term labor deal on any group.

This is the 1113 process that has already unfolded. However, the BK judge has also ruled that he has no jurisdiction to enjoin a strike. I think you are confusing the Bankruptcy Judge Gropper's rulings with a temporary injunction by a Federal District Judge Marrero, who has not ruled on the matter yet.

There is debate as to his authority to enjoin a labor group once the company is out of bankruptcy.

Correct, there is no debate that a bankruptcy judge has no authority to enjoin a strike outside of bankruptcy. As a matter of fact the bankruptcy judge in this case has already decided he has no jurisdiction to enjoin a strike even in bankruptcy. That's why it was appealed to a higher court. He basically is refusing to make a decision one way or the other. In the case of ATA's BK, Judge Lorch pretty much said he would impose the last agreed upon TA or the companies offer at least temporarily if no TA was reached. He gave no indication how that would stand after BK.

Again, I think you are confusing the right of a BK judge to allow the rejection of a contract, vs. the right of a BK judge to enjoin a strike.


The quesiton arises, "When is the RLA superceded, and under what terms? Is an imposed contract covered under the RLA?" No labor group, least of all ALPA, has had the nerve to test the law.

EAL and CAL both struck when their contracts were voided even though they were both covered under the RLA. Not germain here. New law.

Actually, it is not a new law, it's the same RLA. The only difference is the 1113c process. Under the 1113c process many labor groups have struck after a contract rejection. The 1113c process does not treat airline employees differently then other employees and does not prevent self help after contract rejection and the RLA has never prevented an airline strike when a contract is rejected.

Next week should be interesting. I'll leave you with the last word on the matter.:beer:

 

[vc10]

Everyone cool their jets...

Neither the appeal nor the temporary injunction is surprising.

The legal issue in question is what happens when a Railway Labor Act (RLA) contract is thrown out in bankruptcy, does the union have a right to strike in this situation or not?

This situation has never happened before so there is no precedent. This case is creating new law. Never before has a union governed by the RLA been in this situation. And the RLA and Section 1113 of the bankruptcy code (under which the judge permitted NWA to throw out the union contract) are fundamentally incompatible with each other.

So it's unsurprising that the judge wants to think about it and that he wants to call a "time out" while he does. This will be one of the bigger decisions this judge ever makes.

From a union standpoint (and I am NOT a lawyer), it may be encouraging that the bankruptcy judge ruled in favor of the union being able to strike, because bankruptcy judges are typically inclined to do what preserves company value, and certainly a strike isn't a positive from a company value point of view.

Forgetting the law for a moment, personally I agree that it would be unfair to insist that a union continue to work after their contract is thrown out by the company, especially since in that situation, the company is free to impose what terms it wants. I'm not particularly pro-union, but that just seems wrong -- unAmerican and wrong.

So, sit tight and wait and don't panic. My guess (and I am not a lawyer) is that the judge re-affirms the bankruptcy court decision (unless NWA and the FAs come to an agreement before the judge can rule). However, this one could be appealed several times.