Why Delta pilots won’t be getting their contractual raise on January 1, 2016
Our current contract (C2012) will continue in effect until a new agreement is reached. Within the contract are two clauses that are mechanisms for recovery instituted with LOA 46 and LOA 51. These two clauses are 3.B.4. and 3.I. They are better known as the “me too” clause and “profit sharing.”
The “me too” clause is the pay rate adjustment clause that syncs Delta pilot pay rates with the industry average. There are two parts to this clause that make it work. The first is the trigger and the second is the comparison. These two parts are mostly controlled by the decisions management makes regarding the compensation of other non-pilot employees.
The first part of the clause is the trigger date. The trigger date is the date that the non-pilot employees raises take affect. The second part of the clause is the actual comparison. The effective dates and amounts of the raises are at the sole control of management. All decisions made by management are deliberate and have been designed to exclude pilots from the contractual raises due to the “me too” clause.
Our pay rates as of April 1, 2015 are synced to the industry average calculation in the “me too” clause. This means as our industry peers defined as United and American get rate increases, our rates increases when raises are given to Delta employees. On January 1, 2016 the industry average increases by 3%. Delta management has decided to give non-pilot employees a raise on December 1, 2015. This date was chosen specifically to exclude pilots from their “me too” raise.
The announced pay raise on December 1, 2015 is unique and unprecedented at Delta. There are three items unique to this compensation change.
1) The pay rate increase is actually the second raise during the 2015 calendar year. Never before has Delta given two raises in a single calendar year, and these two raises are only 8 months apart.
2)The total raise is the largest given to non-pilot employees ever. The first raise on April 1, 2015 was 3% and the second on December 1, 2015 is 14.5%. The total raise for 2015 will be 17.5% and will be large enough to fore go additional raises for the immediate future.
3) The last and most telling action by management is the timing of the raise. The timing of December 1, 2015 was chosen intentionally to trigger the comparison before the industry adjustment on January 1, 2016. Another unusual change is the compensation plan has two effective dates. December 1, 2015 only applies to the pay raise which triggers the comparison for pilots. The remaining portions of the compensation change are effective on January 1, 2016. The date the additional 401k contribution, and the profit sharing changes take effect is on January 1, 2016. The raises were intentional separated from the rest of the compensation change to specifically exclude pilots from their raise.
This deliberate attempt to exclude pilots from their contractual raise has several benefits to management. By excluding this raise they are attempting to suppress pay rates for an enhanced bargaining position. Effectively C2012 has two and potentially more annual rate increases based on industry average. As of now, the industry rate increases are 3% on January 1, 2016 and an additional 3% on January 1, 2017. These two raises at a minimum should be built in to the C2012 assumptions for negotiating. The fact that C2012 has pay enhancements that continue beyond the amendable date is a unique and valuable situation that effectively negates the time penalty associated with section 6 bargaining. Management would very much like to reverse this situation for future bargaining.
Some history about this clause is key to understanding the reason for and designed intent of the “me to” clause. First, the clause was originally written into the Delta PWA during the LOA 46 negotiation. This letter was negotiated to help Delta avoid bankruptcy. As a mechanism of recover for the loss in negotiated pay rates, the “me too” was intended as a backstop for pilot rates tied to other Delta employees raises and the industry average for pilot pay rates. Second, because there was concern about the possibility of management trying to avoid this raise in the future, language was crafted to secure these raises. Once 30% of the non-pilot workforce was granted a raise, a pilot comparison was triggered. Additionally an 18 month revolving window was added to protect against management’s manipulation of raises to avoid the trigger. This was supposed to protect the integrity of the relationship between other Delta employees’ raises and pilot raises. Can we expect all of management’s future manipulations to be for seen and preventions written into the PWA or are we able to rely on the trust assumed and written into the current PWA in LOA 4?
As is now evident our management has found and exploited a weakness in the language to circumvent the intent of the “me too” clause. This situation was for seen but the language used to protect against managements manipulation may now not be completely adequate. This brazen disregard for contractual intent and disrespect of the pilots’ efforts in saving Delta speaks volumes about how pilots are viewed by management. Pilots’ efforts both now and in the past are not to be rewarded even though their statements at the time were a complete contradiction to today’s actions. (see below)
Not only is this action a clear violation of the intent written into the contract over 10 years ago, but it is done at a time when the status quo requirement of the Railway Labor Act requires that changes involving compensation are prohibited. The company is making record profits and the affordability of the raise is not an issue, now is the time intended and appropriate for this clause to continue in effect. The “me too” clause history shows a precedent that must be considered. If this action remains unchallenged we have accepted management’s manipulation and have set a precedent that we will not challenge misinterpretation of our PWA. This action is no less than stealing 3% of your pay in 2016 and even more in future years.
Are we as Delta pilots willing to stand by and allow this or are we going to defend our contract and take action of our own to stop the abuse of our PWA by management? Let your representatives know your opinion of this attempt to circumvent our contract. Show your support for a grievance requiring compliance with 3.B.4. on January 1, 2016. The MEC is meeting all next week in ATL, your representatives need to hear your voice. The current PWA has to be defended while negotiations continue. 3.I. “profit sharing” may need defending next. Set the right precedent.
Excerpted from SEC filing dated March 22, 2007: While the emergence compensation for Delta’s pilots and flight dispatchers is covered by collective bargaining agreements, both of these groups have fully participated in the measures that were essential to Delta’s survival, recovery and planned emergence from Chapter 11 as a strong, healthy competitor. These groups also will fully share in the successes that their sacrifices and contributions are making possible. “A bedrock principle of Delta’s transformation is that Delta people around the world would benefit from the success their hard work helped make possible,” said Gerald Grinstein, Delta’s Chief Executive Officer. “Thanks to their remarkable efforts, Delta is poised for success. We are extremely pleased to honor our commitment by ensuring that all Delta people will have a new, competitive and more rewarding compensation package when the company emerges from Chapter 11 later this spring.”
Last edited by notEnuf; 11-13-2015 at 05:37 AM.