Railway Labor Act Blog

ATA appeals loss on NMB ballot rule; Are airfares too high?

In a sign it must have money to burn, the ATA filed an appeal this week to the ruling by the United States District Court in the District of Columbia last month upholding the new ballot rule issued by the National Mediation Board.  I’ll go out on a limb–the appeal has little chance of success.  The same court of appeals ATA appealed to said over forty years ago that the kind of ballot rule that the NMB just adopted is okay under the RLA and could be used by the NMB.

Makes one think that airfares are too high.  Anyone flying Delta or Jetblue should ask if they could save a couple of bucks if the airlines quit funding hopeless lawsuits.  Just a thought.

National Mediation Board appoints new Chief of Staff

The NMB announced this week that it appointed Daniel Rainey, formerly head of the Office of Dispute Resolution, to serve as the Board’s chief of staff.  The position had remained unfilled for over five years.  The “Dunlop II” Commission, convened by the Board late last year, recommended to the Board in its report that the NMB fill the Chief of Staff position, noting broad consensus among parties in both the air and rail industries in favor of filling the Chief of Staff.

Below is the NMB’s press release:

The National Mediation Board (NMB) is pleased to announce the selection of Mr. Daniel Rainey as the agency’s new Chief of Staff. As Chief of Staff, Mr. Rainey will oversee the Mediation, ADR, Arbitration and Administrative functions of the NMB. Legal Affairs and Representation matters will remain under the supervision of General Counsel, Mary Johnson.

Federal court dismisses challenge to new NMB ballot rule; new effective July 1

The United States District Court for the District of Columbia rejected a challenge by the Air Transport Association to the new majority vote ballot rule introduced by the National Mediation Board in May.  The district court granted summary judgment to the NMB and the International Brotherhood of Teamsters.  (The IBT had intervened as a defendant in the case.  Its General President, James Hoffa, wrote the NMB in October 2009 asking that the Board issue the new ballot rule.)

The new rule provides that the representative receiving the most votes in an election will be certified and dispenses with the old rule that the representative must receive a majority of all potential voters (including those who don’t bother to vote.)  The ATA claimed that this rule violated the Railway Labor Act, asserting that Section 2, Fourth of the Act required a union to obtain a majority of all eligible voters, as required under the old rule.  The federal court agreed with the NMB that its new rule was a valid interpretation of Section 2, Fourth’s requirement that a majority of the craft or class of employee will determine the representative of the employees.

The decision is available here.

The NMB announced several election applications filed since the new rule became effective on July 1.  The first application came from the IBT for mechanics at ASA (formerly Atlantic Southeast Airlines.)

National Mediation Board issues new rule for majority ballot in elections; Airlines file suit

The National Mediation Board issued its long-awaited rule changing the standard by which it determines when a union wins a representation election.  Under the Board’s prior rule (which, as the airlines’ trade group repeatedly intones, “has been in place for 75 years”), it required a union to win a majority of votes among all employees, not just those voting.

As I noted in an earlier post, this unusual standard, not used by the National Labor Relations Board or any other labor agency (much civil election commission) in the U.S., means that people who don’t vote (whether from outright opposition or just apathy) are counted as “no” votes.  A union must actually obtain a “super majority” of votes to overcome voter apathy.  (A review of NMB and NLRB elections shows voter apathy–that is, the % of eligible employees not voting–to run on average from a low of 12% to as high as 21% .)  While any other election is decided on 50%+1 votes among voters, NMB elections had required a union to get well over 50% of those voting.

The new NMB ruling is quite lengthy.  But to summarize, the Board rejected claims that its procedure for implementing the rule was flawed since it was only required to engage in “informal” rulemaking (announcing a proposed rule and allowing a period for comments which would then be reviewed.)  It also concluded that it had the necessary statutory authority to implement the rule based on long-standing Supreme Court authority.  Finally, it concluded there was a valid basis for changing the rule since the new rule would more accurately reflect voter preference and would make the Board consistent with election practices elsewhere.  The Board noted that prior assertions that the super-majority rule enhanced stability in labor relations had no actual evidence to support the claim.  It also rejected as pure speculation the claim that its new rule would permit a minority of voters to select a representative (the phony “minority rule” argument.)

The Republican chair of the Board dissented from the rule.  Her dissent is a rehash of arguments made by some airlines in opposition to the rule.  It is premised on: the notion that since the old rule was 75 years old it shouldn’t be changed; a reading of the statute long ago rejected by the Supreme Court (does that matter?); ignoring that there is no evidence the old rule “enhanced stability in labor relations”; and glossing over the fact that the Board’s super-majority rule is contrary to the conduct of elections in every other sector of our society.  It also claims that the new rule cannot be implemented without also adopting a rule allowing decertification of unions.  That’s a curious claim since the Republican dissenter (and the airlines) huff about “stability in labor relations” and decertification is about disrupting labor relations.  It also strange since the RLA nowhere mentions decertification.  When decertification was introduced to the National Labor Relations Act it required Congress to amend the statute under the Taft-Hartley Act of 1947.  Obviously, Congress has not amended the RLA.  (“Ahh, details, shmee-tails.”)

The Air Transport Association promptly filed suit  against the NMB on May 17, 2010 to have the rule set aside.  It claims that the Board lacked authority under the RLA to change its rule and that the Board violated the Administrative Procedure Act by not having a formal hearing.  It also accuses the Board majority of predetermining the outcome of the rule and excluding the Republican member of the Board from decisionmaking on issuing the rule. (The Republican chair, of course, had no intention of either supporting the rule or authorizing its issuance.)  In a sign that the lawsuit is much more political than substantive, the lawsuit uses the phony term “minority rule” to describe the NMB’s new rule.  (Of course, by the ATA’s thinking, most politicians are elected by “minority rule.”)  But at least the ATA restrained itself somewhat and only mentioned five times in the complaint that the NMB’s old rule was “75 years old.”

That litigation will fail.  But, sorry, no preview of theories or arguments.  The ATA’s attorneys already have enough information from the comments filed during the NMB’s rulemaking proceeding.

P.S. A substantial number of the ATA’s members do not support its litigation against NMB and the airlines are divided over the issue.

Mediation Board release Spirit Airline pilots from mediation

You’ll recall an earlier post concerning litigation between the Air Line Pilots Association and Spirit Airlines over the airline’s bad faith bargaining.  The United States District Court for the Eastern District of Michigan rejected ALPA’s claims that Spirit’s demands for substantial pilot concessions, even as it posted profits, were bad faith bargaining.  The Court noted that the parties remained in mediation and the outcome of bargaining was not set.

Well, no longer.  The National Mediation Board released Spirit and its pilots from further mediation last week.  The pilots rejected the NMB’s proffer of arbitration and are now preparing to strike the carrier.  Spirit, in a sign of the tonedeafness that prompted it to impose a carry-on bag fee on top of its checked bag fee, continues to insist that its pilots give concessions while the carrier makes profits and (at least it claims) to increase booking by 40%.

The NMB will now try to leverage the “30-day cooling off period” under the Railway Labor Act to move the parties to an agreement.

Machinists Union seeks rerun election at Delta Airlines

The International Association of Machinists (IAM) has filed with the National Mediation Board to have a new election run among a small group of employees at Delta Airlines (flight simulator technicians) on the ground the airline interfered in the election. The union claims that Delta gave pay raises in order to influence voters and made improper statements during the campaign.  Delta denies the union’s allegations.

Under NMB rules, such “election interference charges” are filed after the election is held. (If the Union prevails than the NMB does not both to consider interference charges on the ground that it did impact the election.)

The Board will investigate the charges to see if evidence establishes that the airline interfered in the election.  The union has the burden of providing evidence to warrant an investigation. The NMB then does independent fact-gathering that will be the basis for its decision.  The Board will find an airline interfered in an election if, for example, the evidence shows that the airline gave an unplanned pay raise during the course of the representation election.  It can also find election interference if the airline threatened adverse action if the employees voted for the union or it made promises of benefits if the employees voted against the union.

The NMB will issue a written decision after its investigation, which will likely last several weeks.

American Airlines reaches tentative agreement with mechanics

American Airlines announced yesterday that it had reached a tentative agreement with its mechanics.  The Company and the Transport Workers Union (representing the mechanics) have been in protracted bargaining since 2008 over a new collective bargaining agreement, most recently with the mediation assistance of the National Mediation Board.  The current agreement is a concessionary contract made by the parties in 2003 as part of an effort by AA to avoid bankruptcy (which it successfully did as part of agreements with several labor groups.)

The TA is “in principle”, which means the parties are working out specific contract language to reflect the agreement.  The TWU published a summary of contract changes here.

Who benefits when airlines merge?

The New York Times hosts a debate on its website on who benefits when airlines merge? One participant, Prof Scott Sonnenshein of Rice University’s Jones Graduate School of Business noted the importance of labor relations to successful mergers:

But I think the more significant issue to watch is whether employees will become distracted, or even disgruntled, with the changes. . . Employees are likely to be (rightly) asking questions about their job stability, such as where, how or even if they will continue to work for the combined company. Even with the company’s reassurances of limited job cuts and changes, employees nevertheless are likely to be asking these questions because management teams have a tendency to underestimate the impact of strategic change on front-line employees.

As I noted previously, the overlap of union representation for the United/Continental pilot and mechanic employee groups may help ease the combination for those groups.  However, there are large employee groups (flight attendants and ground service) with different union representatives, where a contested election will likely occur.  That will delay combination.  Even among groups with the same representative, however, combining employee groups can be difficult where there are differences in overall seniority and the terms of collective bargaining agreements.

United Airlines and Continental Airlines to merge; labor issues will be important

United and Continental announced today a deal to merge and conduct operations under the United brand.  The Houston Chronicle carries this story noting the importance of labor relations to a successful merger.

United is currently in collective bargaining with all of its major employee groups (a consequence of it having renegotiated its contracts during its bankruptcy several years ago.)  Continental is also in bargaining with its major employee groups, including pilots, flight attendants and mechanics.  Continental’s ramp employees organized with the Teamsters in February.

As the two companies will merge their operations together into a single company, the collective bargaining agreements and the McCaskill-Bond airline employee seniority integration statute passed in 2007, will govern combination of seniority lists.

The pilots of both airlines are represented by ALPA.  The mechanics of both airlines are represented by the Teamsters.  That common representation should make combining those groups somewhat easier.

The flight attendants of United are represented by the Association of Flight Attendants.  The Continental flight attendants are represented by the International Association of Machinists.  A contest between the unions to represent the combined flight attendant group may occur.

The Teamsters represent the ramp employees of Continental and the IAM represents the United ramp workers.  That may also lead to an election contest over which union represents the combined group.

RyanAir and Spirit Airlines in new joint venture to charge for oxygen use

RyanAir, the Irish ultra-low cost carrier led by Michael O’Leary, and Spirit Airlines, an American ultra low-cost carrier, have followed their recent revenue initiatives of charging for toilet use in the case of Ryan and for carry-on baggage by Spirit, by announcing a new transatlantic joint revenue venture to charge for oxygen use on their flights.

O’Leary, who has long demonstrated innovative revenue initiatives such as transatlantic service combining no-frills economy with high-service business-class, said the initiative could prove the most profitable ancillary revenue source available to the airline.  “We researched what is the most ‘value-added’ service we provide our customers,” O’Leary stated, “and helping people breathe just jumped out as far and away the biggest service.”

The carriers contemplate the service would charge for by-the-minute use.  Rather than pressurizing the aircraft above 10,000 feet, the oxygen mask compartments would open once that altitude is reached.  Spirit CEO, Ben Baldanza, explained, “customers will just swipe a credit card to start the service.  It’s no different than running a tab at a bar.”  Baldanza also noted that the descending oxygen masks will have the ancillary benefit of alerting passengers that electronic devices can now be used.  “Our customers will be able to hook up to O2 and then go right online; seamless service.”

The carriers did not indicate when the new revenue initiative would start.  But they did estimate it would produce between $175 million to $265 million in annual additional revenue.  RyanAir stock was up on the news, as market analysts cheered the airlines’ innovative effort to maximize available revenue streams.  (Spirit is privately-held.)

A RyanAir spokesperson denied that the announcement was a publicity stunt or was attributable to lingering effects of O’Leary’s St Patty’s Day bender.