AAUS Airways Merger Accomplished,
Now on to Seniority Integration
By First Officer Tim Daudelin, Seniority Integration Committee Member
With the merger between American Airlines and US Airways now accomplished, the time seems right for a brief review of the McCaskillBond legislation relating to the integration of the work groups at the two carriers.The statute originated after American acquired TWA in 2001. Missouri Sens. Claire McCaskill and Kit Bond, who were unhappy with the way AMR integrated TWA workers, introduced an amendment to an omnibus spending bill to guarantee certain labor protective provisions (LPPs) for covered airline transactions. The statute defined a covered event as the combination of multiple carriers that involves the transfer of 50 percent or more of an air carriers assets or equity and would require a "fair and equitable" integration of seniority lists for the employees of crafts or classes that are subject to the Railway Labor Act (RLA). President George W. Bush signed the bill into law in 2007. The McCaskill-Bond statute did not create a new law but rather utilized two sections 3 and 13 of the LPPs imposed by the CivilAeronautics Board in the Allegheny-Mohawk merger of 1971. Essentially, the new statute requires that the carrier make provisions for integration of the seniority lists, but not necessarily the labor agreements, in a "fair and equitable manner," including negotiation with the union and employee representatives and binding arbitration as necessary. The parties to these negotiations are the employee groups or unions of the companies and the carrier or carriers involved in thetransaction, and the statute establishes that the carrier bears the responsibility to provide the fair and equitable process. The parties canaccept a voluntarily negotiated integrated seniority list (ISL) as outlined in Section 3 of the LPPs, or else, to the extent the unions or employee groups fail to present such a voluntary list, it is the carriers duty to engage in arbitration with those groups as outlined in Section 13 of the LPPs.In the case of a covered transaction that involves parties represented by the same union, the internal merger policy of the union must be used, and the carrier will have no input in the process, except to decide whether it will accept and implement the ISL. This was the case in both the Delta Northwest and UnitedContinental mergers, as both pilot groups in these mergers were members of ALPA, so the internal ALPA merger policy was applied. The merger of US Airways and America West took place before the enactment of McCaskill-Bond, so it could not have been applied, but evenif it had occurred after the effective date, ALPA represented both carriers, so its merger policy would have taken precedence. The merger of Southwest and Air Tran fell under McCaskill-Bond because it met the requirements for the asset and equity transfer and involved the merger of operations and the combination of workers of crafts or classes covered by the RLA. The arbitration of provision of the statute was never
triggered, though, because the pilot unions reached a voluntary agreement without having to invoke the Section 13 arbitration aspect.
ALPA Merger Policy vs. McCaskill-Bond
As stated in the article above, the recent UALCAL merger and ISL
development process were governed by the ALPA merger policy
because ALPA represented both carriers pilots. In April 2009, ALPA
revised its merger policy by replacing the "five goals" that required
negotiators, mediators and arbitrators to weigh in integrating seniority
lists with three specific factors that must be considered: longevity, status
and category, and career expectations. Negotiators, mediators and
arbitrators are free to take into account other elements, and the weight
placed on each of the elements is at their discretion, but the three core
factors must be considered. It is important to note that the ALPA
merger policy is separate from the McCaskill-Bond requirements,
which place no requirement on parties who are not represented by
ALPA to adhere to these criteria. While parties involved in a McCaskillBond
covered transaction merger, such as AAUS, are free to adopt
any of these elements when developing an ISL that meets the "fair and
equitable" standard, they are under no obligation to do so.
There is also a provision in the statute, Section 13b, that allows the merging labor groups and the carrier to establish, by mutual agreement, alternative arbitration and dispute resolution processes from those detailed in Section 13a of the statute. When APA negotiated the MOU with USAPA and the company, consistent with this part of the statute, the AAUS Airways Merger Accomplished (continued from page 7)parties established an alternative process and conditions for the ISL development. Paragraph 10 of the MOU details the timetable for the negotiations and, if necessary, arbitration for our seniority integration process and establishes the makeup of
the panel of arbitrators and the criteria they will use in any ISL arbitration proceeding.
The overriding standard that must be followed throughout both phases negotiation and arbitration, and ultimately in the
ISL is that of "fair and equitable." Neither McCaskill-Bond nor the original Allegheny-Mohawk LPPs actually define this term,
so we are required to look to prior seniority integrations to understand what other groups and arbitrators have used, while
acknowledging that each integration is different. Pre-merger career expectations, fleets, networks, pilot demographics and
longevity are just a few of the aspects that have been considered when defining this term. These facets, along with others that
are appropriate to the pilot groups in the American merger, will be explored in crafting the criteria that are most appropriate
to integrating the pilot groups, with the ultimate goal of achieving an ISL that meets the standard of "fair and equitable."
