January 3 & 4, 2005

Issues #1 - #2 - #3 - #4

This is an ALERT:

"...the only power the Court has is to either grant or deny a motion by the debtor to reject a collective bargaining agreement. It's an all or nothing proposition. The parties themselves have the opportunity to create solutions of considerably more subtlety and appropriateness for the case. - Bankruptcy Judge Eugene Wedoff " 

Recently I was sent a couple of letters written by one of our fellow PHL Flight Attendant. The information in these letters was misleading and filled with inaccuracies. Because we are in the throws of a vote and because it is essential that you, the PHL Flight Attendant's, have correct information in which to cast an informed vote, there was no other choice but to spend precious time in an attempt to try and rectify this misinformation. Please share this News Line with your flying partners

There is no conspiracy. The MEC is not spinning or hiding anything. What is happening in the court is all over the media. 

Please note that the Company has already met most, if not all of, the requirements that the PHL FA alludes to in his letter. They have already met the requirements to enter into Bankruptcy. They have already provided financial data to the Unions. They have already negotiated contracts to finality with 3 of their 5 Unions. The Company will use the ratification of those three contracts to prove that they have also met the requirement to negotiate "a fair and equitable" solution among concerned parties. In addition, after more than 5-months of negotiations, they have reached a Tentative Agreement (TA) with AFA that affords the Flight Attendant group a lesser pay cut than what was agreed to by the other unions. 


Okay, Let's get started.

==============

Section 1113 and the Bankruptcy Code:

In the last letter I received, the PHL Flight Attendant asks the Flight Attendant's to vote down the TA stating that: 

"...and the law was changed specifically to only allow the company to impose the LAST OFFER ON THE TABLE. If the company tries to impose any changes more severe than the most recent offer; the law allows the Union to engage in Self-Help. (C.H.A.O.S.)"

This statement is, at the very least, misleading. If the judge terminates our contract, US Airways is free-if it chooses-to impose wage, work rules and benefit changes. 

As to the right to engage in Self-Help, if the TA fails, the Company will immediately seek a TRO (Temporary Restraining Order.) Whether or not it will be granted is yet unknown. 

The PHL Flight Attendant makes is sound as if what happens next is all "Cut and Dried," and that we will get the TA whether we vote for it or not. Our attorney's are in disagreement with this PHL FA's position. FYI: I do not know how anyone can say for certain what will happen as even the Second Court of Appeals is in disagreement in some areas with the Third Court of Appeals. 

Folks, the truth is there is little or no precedence to follow since the law was amended in 1984. Many things will be open to interpretation. One thing that we do know for certain is that "The goal of federal bankruptcy law is to assist individuals and businesses to obtain relief, if possible, from debts and obligations which could render the debtor insolvent."

Note: Please understand that the Laws governing us while in Bankruptcy are meant to be swift and to protect the survival of the Company even if resolution would adversely impact the employees. 

This fact should have been driven home to all when under Sec. 1113 (e) Judge Mitchell swiftly granted a 21% pay cut along with other requests including scope and the arbitrary addition of 5 to 10 hours of flying time (1-trip ITD) per FA per month. 

Judge Mitchell ruled without so much as a thought as to how those changes might adversely impact the US Airways Flight Attendants. 

Senior FA's were forced to fly additional time that many did not want to fly thereby taking more flight time and even more money than the 21% pay cut from our more Junior and already lower paid Flight Attendant's. This was not a good solution for either senior or junior but that was NOT of primary concern for Judge Mitchell. AFA, IAM & CWA attorneys all eloquently argued against the Company's request for relief. The Judge heard and ruled in favor of the Company. 

AFA's General Council, David Borer, Responds:

The PHL FA's first letter was sent to AFA's General Council, David Borer, for comment. Below is Attorney Borer's response to that letter. Please read it carefully as it contains valuable information:

First, the changes made to the bankruptcy law in the 1980s were procedural. The law has always (and still today) permitted the rejection of a union contract. At the time that Frank Lorenzo wiped out the contracts at Continental, union contracts were treated no differently than any other contract the company might want to alter or terminate in bankruptcy, eg. contracts with vendors or suppliers. The changes made to the law following that debacle included the adoption of Sec. 1113, which simply dictates that certain procedural requirements be met. Those requirements only apply to the rejection of union contracts. Those requirements include that, upon presentation of the company's demands for changes to the contract both the company and the union must engage in good faith negotiations, and the company must provide to the union all the best information available for purposes of evaluating the proposals.

If the company first complies with those procedural requirements and no agreement is reached, then a motion under Sec. 1113 is presented to the court. Sec. 1113 then lays out standards that must be met before the court can grant the motion to reject the contract. First, the company must show that the changes it has proposed are "necessary to the reorganization." In other words, these changes are necessary as part of the company's overall reorganization plan to successfully emerge from bankruptcy and return to profitability. Second, the cuts must be "fair and equitable to all parties." That does not mean the changes must be 'fair and equitable' in a vacuum, but rather in the context of all the changes being made in the bankruptcy, whether to other labor groups' contracts, to vendor contracts, etc. 

If the court determines that these standards have been met, then the judge would grant the company's motion and authorize the company to reject the entire union contract. In its place the company would be free to impose new wages, benefits and working conditions in line with its proposals. 

Mr. Perkins' memo/email also misstates the time limits for a decision. Sec. 1113 requires the judge to issue a decision on an 1113 motion within 45 days after the motion is filed. Throughout this bankruptcy case Judge Mitchell has acted very quickly and issued decisions very promptly. The 1113 hearing was scheduled to conclude next week and there was every reason to believe the judge would rule very shortly thereafter, rather than use the entire 45 days permitted by the Code. In any event, even if the Court took the entire 45 days the decision would be issued in January, not 4 to 6 months as described in Mr. Perkins memo/email. 

I certainly understand Mr. Perkins concerns about this Tentative Agreement. He is clearly entitled to his opinions. But, as the membership casts this important vote on the tentative agreement I thought it imperative to provide correct information on the process so that no one casts a vote based on incorrect information. It is up to the membership to decide how to vote and not my place to address the other arguments Mr. Perkins raises.

David

 

David A. Borer
AFA General Counsel

More Misinformation:

Below are just a few other things from the letter that needed to be addressed. 


Pay For Duty Hour: 

If we are going to "fight the fight," then let's at least try to stay with the ones that we have better than a snowball's chance in hell of winning. 

Although it would be nice if we were all paid by the number of hours we spend on duty, the reality is that in all the decades upon decades that there have been Flight Attendant's and Pilots working at this airline, that has never happened. Fact is I know of no other airline in the world that pays crews by the "Duty Hour." 

We are in bankruptcy, our Company is hanging on by a thread, even in the best of times the odds of successfully negotiating pay by duty hours would be a "Pipe Dream." 

This is not a "New" idea. For as long as there have been Pilots flying airplanes, Unions have tried to obtain pay by the "Duty Hour." The closest anyone could come was "Duty Rigs." 

Preferential Bidding System (PB):

We agreed to PB in the Winter 2003 Restructuring Agreement. Nowhere in that agreement does it state that under PB "Every FA will bid for a line of trips, or that only 10% of the FA's can be on reserve." This too is more wishful thinking. 

The reason management has not pushed to implement PB, is because the program is quite expensive and there is not a lot of extra money floating around right now. 

The reason AFA has not pushed the Company to abide by the implementation time line is because, through study and through our experts, we have found that there are glitches within the system that disadvantage both line holder and reserve. 

The PB System is NOT the panacea for reserve that the reserves are hoping it would be. 

Under the PB System, there will still need to be approximately 2 to 5 % of trips in open time. 

I know more lines and fewer reserves is a concern for many. We tried to address that in this TA. After the building of Secondary lines there is no minimum requirement of open time. Left over open time will be used on a "First-come/first-served" basis to augment secondary lines. It may be just my opinion but if you are looking for more lines and fewer reserves then the TA is much better equipped for that to happen than a Preferential Bidding System will be. 
Also in his letter the PHL FA speaks of the ETB. The Electronic Trade Board was negotiated in THIS TA as an additional tool for FA flexibility. If this TA is voted down we would attempt to try and negotiate it back into a future agreement but there are no guarantees. FYI: Trips on the ETB are also on a "First-Come/ First-Served Basis." Although management did not want it, the ETB is not only for line holder use, it is also for Reserve use and any trip a reserve picks up off of the ETB will be ABOVE guarantee. 

Reserve System:

In his letter the PHL FA indicates that if we vote this TA down that we will be able to go in and "obtain a reserve system "No less favorable that the one negotiated/used by Southwest Airlines Flight Attendants." 

OH, Where do I start?

• SWA Reserves do NOT have a choice of trips

• They do NOT pick trips in seniority order! 

• ALL Southwest Airline Reserve trips are selected and assigned by Crew Schedulers in "inverse seniority" depending on the amount of time flown and days available to fly. 

• SWA Reserves work under a combination "LTO and Bucket" type of reserve system. 

• Your Negotiating Committee was able to dodge "Buckets" for our Reserves. 

• The bottom 65% of the SWA Flight Attendant's "rotate" onto reserve. 

• SWA average seniority is approximately 5 years. USA's average seniority is approximately 18-years. If 65% of our Flight Attendant group were put on rotating reserve, anyone hired after September 1983 would be a "rotating reserve." (22 years of seniority).

• This is still a democratic union. In order for us to have a rotating reserve it will take 51% of the U Flight Attendant's voting in Favor of it. 

• If the TA passes, there will be more movement off of reserve than in the past. Both the "Early Retirement" & the VFLR allow for "built-in growth." The Company is expecting approximately 800 senior Flight Attendant's to take one or the other the first year alone. Many Reserves will be moving up. Would they vote in favor of going back on reserve just as they are escaping?

FYI: Our Pilots are in the beginning stages of their new "Bucket" reserve System. Please feel free to ask anyone of them how he/she likes it. I believe once you work through the profanity you will find out what many of us already know; there are worse things than not having a rotating reserve.

I do not believe a RR would pass a membership vote. As stated above let's spend what little resources we have fighting the fights we have a chance of winning. 

I am a reserve and I too would love to "Cherry Pick" from the SWA contract and maybe if we are ever again profitable (like SWA) we might be able to do just that, but that time is not now. 

We are in CONCESSIONARY times. SWA is NOT at deaths door, we are. BIG difference!

Vacation Days / No Pay: 

The PHL FA states that he will get the Company to agree to all of the things above by keeping the same amount of vacation days that we presently have but not all with pay. The NC already tied that, several different times in several different ways. NO GO! I doubt there is much that anyone can think of that we did not already try. 

It's not just the "Vacation Pay" that the Company objects to. It's the days free from duty that concern them. Please remember that they wanted Vacation Days to be: 7 - 14 - 21 with no increases in the future. That is exactly what our pilots took. 

I do not mean to get ugly here but it is very easy to be a "Monday Morning Quarterback," it is altogether a different thing to actually jump into a vat of ca-ca up to your nose and still be able to find a way to dig out. I am pretty sure we did better than the Company intended for us to do. NO, I am NOT trying to sell this Concessionary Deal to anyone. Please come to the Road Show and get your questions answered. 

In Closing:

We are in a situation like no other in our history. I will not make a recommendation on how to vote on this Concessionary Deal as it will affect each one of us differently. 

KNOW THIS - I am with you, whatever way the majority elects to go, FOR or AGAINST. I just ask that you vote and vote an "INFORMED VOTE." 

You will need to decide what is best for you. Please get informed. Please seek information from someone in the know rather than from someone that may be even more in the dark about an issue than you are. In other words try to come to one of the Road Shows. 

So far less than 40% of our members have voted. This vote is too important to leave in the hands of less than half the members. 

Note: The Road Shows are being conducted to answer questions concerning the TA ONLY. This is not a forum for certain individual to platform their personal or political desires or gripes. 

The time is limited. This time will be used to answer PHL FA questions so that they can make an informed vote. Many of the FA's coming to the Road Show in PHL will be trying to get their questions answered in-between flights or prior to trip origination. Please come prepared with questions, bring your copy of the Tentative Agreement Summary and please respect your fellow flight attendants right to obtain answers. 

For those who cannot come to the PHL Road Show, there are still several avenues available for you to have your questions answered. The AFA web site allows you to post questions and receive an answer via email (www.afausairways.org). The Company has posted a Frequently Asked Questions section on theHub (http://thehub.usairways.com/index.htm). Don't hesitate to call the Local PHL office with any questions you have.

VOTE!

Take Care and Fly Safe,

Mollie McCarthy
LEC President
Council 70 PHL/PHW