Thread: MAJOR Win for Airline Labor
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Old 09-16-2010 | 04:28 AM
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ATCsaidDoWhat
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Default MAJOR Win for Airline Labor
The question on this is why ALPA refused to support this language in the bill? We FINALLY get something that would protect our contracts and pensions from being gutted while management walks away with tons of money...and ALPA says "no?"

House Judiciary Panel OKs Bill Protecting
Workers, Retirees of Firms in Bankruptcy

The House Judiciary Committee's Subcommittee on Commercial and Administrative Law Sept. 15 reported favorably to the full committee a bill aimed at shielding workers' wages and benefits when businesses file for bankruptcy restructuring, after passing an amendment specifically protecting airline employees.
H.R. 4677, the proposed Protecting Employees and Retirees in Business Bankruptcies Act, passed along party lines with a roll call vote of 8-4. The bill, which would make various changes to Chapter 11 bankruptcy law, passed the subcommittee despite sharp criticism from Rep. Trent Franks (R-Ariz.), who said the measure would cost jobs by forcing companies that could be reorganized into liquidation.

The subcommittee passed by a 8-4 vote an amendment offered by Rep. Daniel B. Maffei (D-N.Y.) that would clarify that the bankruptcy code Section 1113 process for modifying or rejecting a collective bargaining agreement would not apply to an airline whose employees are covered by Title II of the Railway Labor Act (RLA).
Meanwhile, an amendment offered by Franks that would have stricken the bill and required a Government Accountability Office study on the impact of the legislation failed by a vote of 8-4.

H.R. 4677 to ‘Restore Balance.'

H.R. 4677 and its companion bill, S. 3033, were introduced Feb. 24 by Sen. Dick Durbin (D.-Ill.) and Rep. John Conyers (D-Mich.). The bill was meant to “level the playing field” and “restore a proper balance” between employees and retirees when businesses file for Chapter 11 protection, Conyers said.

“H.R. 4677 is urgently needed to protect the jobs, benefits, and retirement plans that provide for many of our working class families,” Conyers said. “These reforms will provide transparency to the bankruptcy process and change the bankruptcy code so that executives must accept the same cuts in wages, benefits, and pensions that they ask of their workers. It's time to level the playing field and eliminate the abuse of our bankruptcy laws so we can have a better ending, not the same old story.”

According to Conyers, the bill would provide a “small modification” to be put in place where the courts have been allowed to run wild. The bill would require executive compensation to be subject to court approval and improve recoveries for employees and retirees when a company files for Chapter 11 protection. The bill “helps the lives of people who work for employers,” Conyers said, noting that the bill was not about unions.

The bill drew sharp debate at a May hearing over whether the interests of workers and debtors are balanced under current law (100 DLR A-19, 5/26/10).

According to Conyers, the bill's provisions would do the following:

• make it tougher to reject collective bargaining agreements;
• prevent companies from protecting management retiree benefits while slashing everyone else's;
• allow workers to assert claims for losses in certain defined contribution plans when such losses result from employer fraud or fiduciary duty;
• prioritize the payment of workers' severance pay; and
• clarify that back pay awarded via Worker Adjustment and Retraining Notification Act damages are entitled to the same priority as back pay for other legal violations.

Sections 1113 and 1114 of the bankruptcy code were intended to ensure a balance of protections for workers and employers alike, Conyers said, but some courts have interpreted those sections in a way that puts employers ahead, enabling them to reject collective bargaining agreements and employee benefits, such as in the airline and steel industries.

Franks' Amendment Defeated

Franks disagreed sharply with Conyers' characterization of the bill, saying that the legislation would have the opposite effect. According to Franks, the bill would increase costs, and make it more difficult for debtors to attract and maintain management when a company is in Chapter 11.

“All parties will lose if the legislation is enacted,” he said. We need to be creating jobs, Franks said, instead of forcing companies that could be successfully reorganized into liquidation.

According to Franks, the impact of the legislation needs to be studied, and that is why he proposed an amendment requiring GAO to study it. “Shouldn't we reform defined benefit pensions?” he asked.


Airline Employees Exception

Under Maffei's amendment, collective bargaining agreements for airlines in bankruptcy would be governed by Section 6 of RLA, which specifies procedures applicable to RLA-covered employers and employees whenever changes in pay rates, work rules, or working conditions are made. The amendment also would clarify that an airline cannot unilaterally reject a collective bargaining agreement under Section 365 of the bankruptcy code, Maffei added.

Maffei said his concern was that the bankruptcy process has “increasingly been used as an economic opportunity rather than a last-ditch effort to save the airline. It's become a way to negate a company's contracts, to erase a union's hard-fought gains in pay and working conditions made over decades of collective bargaining. It's been used to force concessions that are otherwise unachievable in consensual bargaining.”

“There is no basis for the discriminatory treatment of airline employees inside the bankruptcy process,” Maffei said.


So after reading this, you have to ask why ALPA would oppose this?

Simple. The language that was included by Congressmen Maffei was written by the Airline Division of the Teamsters. In less than a year, they accomplished what ALPA has been unable to do.

What did ALPA want instead? Not to protect contracts and pensions...they wanted the right to strike.

Lot of good that does you when your pension is gone and the contract is gutted.

It doesn't matter who you are, what you do or which union pin is on your lapel. This is good for ALL airline employees and we all need to insist that our Congressmen and Senators support the legislation.
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