HSLD

Judge Rules in ALPA's Favor Regarding Suspension of Non-Qualified Payments
Source - ALPA

Friday, February 18, 2005

Today in U.S. Bankruptcy Court, Judge Eugene Wedoff granted ALPA’s motion to compel the Company to continue paying non-qualified pension benefits. The judge stated in his oral ruling that the Company’s position that it could “suspend” payments lacked any "colorable basis" under the collective bargaining agreement — meaning the company's position was totally frivolous —and that, because there was no legal support for the Company’s position, ALPA was not required to first arbitrate the issue before asking for court relief. The Judge further stated that United had agreed to continue paying such benefits at the outset of the case and that Section 4 of the recently ratified Tentative Agreement, of which every word had obviously been carefully considered by the parties, made absolutely clear that United had committed itself to maintain the A-Plan in full force and effect for 90 days, in order for ALPA and the Company to seek a legislative or economic remedy to the pension challenges facing United.

After the Company notified pilots of its decision on Feb. 5 to suspend payment of the non-qualified benefits, the United MEC asked United management to reconsider its decision. Unfortunately, the Company rejected our request out of hand, leaving us no alternative but to seek a judicial remedy.

As MEC Chairman Captain Mark Bathurst said in a letter to all pilots on Tuesday, ALPA viewed the Company's decision as a clear violation of our contract, as well as a violation of the Bankruptcy Code. It was regrettable that ALPA even had to contemplate filing this motion. We worked with management in good faith to achieve our latest Tentative Agreement, an agreement that provides us a 90-day window to seek a resolution to the pension challenges.

"This was an unfortunate episode in United's bankruptcy case," said Captain Bathurst following Judge Wedoff's ruling. "We worked hard to avoid having the Company's decision reach the courtroom, but their unwillingness to reconsider their decision left us no alternative. We're pleased that Judge Wedoff shared our recognition of the Company's violation of our agreement. We fully expect the Company to adhere to the collective bargaining agreement it has reached with us, and to avoid situations in the future that have the potential of squandering any remaining good will."