B6 pilots reportedly prevail in "3A" dispute

[WorldTraveler]

After a lengthy process, a number of B6 pilots are claiming victory in internet discussions regarding a dispute in which they say the company increased the pay of certain groups of pilots but not all as had been required.

Some are estimating the cost to B6 could amount to hundreds of millions of dollars; technically, the arbitration applies only to those pilots who chose to join in the arbitration process since B6 pilots are not unionized. However,B6 is faced with either increase the pay of all pilots (which some pilots believe they will do) or they open the door to an increased chance of unionization among the pilots.

The cost of the settlement could equal or exceed B6's recent profits.

JetBlue's most recent annual report contains this note on page 60

"Employment Agreement Dispute.
"In or around March 2010, attorneys
representing a group of current and former pilots, or the Claimants’,
fi led a Request for Mediation with the American Arbitration Association
concerning a dispute over the interpretation of a provision of their individual
JetBlue Airways Corporation Employment Agreements for Pilots, or
Employment Agreements. In their Fourth Amended Arbitration Demand,
dated June 8, 2012, Claimants (approximately 944 current pilots and 26
former pilots) alleged that JetBlue breached the Base Salary provision of
the Employment Agreements and sought back pay and related damages,
for each of 2002, 2007 and 2009. In July 2012, in response to JetBlue’s
partial Motion to Dismiss, the Claimants withdrew the 2002 claims. The
Claimants have not specifi ed an exact amount of damages sought. As
such, we are unable to determine a range of potential loss at this time.
However, pilot salaries currently represent approximately 40% of our total
consolidated salaries; therefore, any judgment in the Claimants’ favor for
any or all of the years in question could have a material adverse impact
on our results of operations, liquidity and/or fi nancial condition.
Discovery was completed and expert reports were fi led during the fourth
quarter of 2012. An arbitration hearing is scheduled in March 2013. In
this arbitration, the Company intends to continue to vigorously defend
its interpretation of the Employment Agreements at issue. While the
outcome of any arbitration is uncertain, the Company believes the claims
are without merit."

 

[NewHampshire Black Bears]

After a lengthy process, a number of B6 pilots are claiming victory in internet discussions regarding a dispute in which they say the company increased the pay of certain groups of pilots but not all as had been required.

Some are estimating the cost to B6 could amount to hundreds of millions of dollars; technically, the arbitration applies only to those pilots who chose to join in the arbitration process since B6 pilots are not unionized. However,B6 is faced with either increase the pay of all pilots (which some pilots believe they will do) or they open the door to an increased chance of unionization among the pilots.

The cost of the settlement could equal or exceed B6's recent profits.

JetBlue's most recent annual report contains this note on page 60

"Employment Agreement Dispute.
"In or around March 2010, attorneys
representing a group of current and former pilots, or the Claimants’,
fi led a Request for Mediation with the American Arbitration Association
concerning a dispute over the interpretation of a provision of their individual
JetBlue Airways Corporation Employment Agreements for Pilots, or
Employment Agreements. In their Fourth Amended Arbitration Demand,
dated June 8, 2012, Claimants (approximately 944 current pilots and 26
former pilots) alleged that JetBlue breached the Base Salary provision of
the Employment Agreements and sought back pay and related damages,
for each of 2002, 2007 and 2009. In July 2012, in response to JetBlue’s
partial Motion to Dismiss, the Claimants withdrew the 2002 claims. The
Claimants have not specifi ed an exact amount of damages sought. As
such, we are unable to determine a range of potential loss at this time.
However, pilot salaries currently represent approximately 40% of our total
consolidated salaries; therefore, any judgment in the Claimants’ favor for
any or all of the years in question could have a material adverse impact
on our results of operations, liquidity and/or fi nancial condition.
Discovery was completed and expert reports were fi led during the fourth
quarter of 2012. An arbitration hearing is scheduled in March 2013. In
this arbitration, the Company intends to continue to vigorously defend
its interpretation of the Employment Agreements at issue. While the
outcome of any arbitration is uncertain, the Company believes the claims
are without merit."

Ever notice that the G D ..company(s)..NEVER say.....'you know what, your claim HAS MERIT,...so we'll make up...$$$...for our miscalculation' !

N O !
It's ALWAYS.....'Your Claim(s)...have NO Merit ' !

So with that said,.............'F- - - B6' !!
I hope the F/A's and the Pilots..'Stick it up B6's ASSS', and vote in the Union !

 

[WorldTraveler]

Given the case was in arbitration at the time the statement was made for the annual report, no one would have expected the company – any company – to admit there was even a chance they could have been wrong. The union or any other party to a legal or arbitrated case would take the same position. That is the way the process works.

If B6 now fails to acknowledge after the arbitration ruling that they erred in how they increased the pay of a select group of pilots, then your ire might have merit.

For whatever reason, B6’ pilots have twice decided they would prefer to not have a union even though this case goes back long before some of these union votes.

B6 clearly did things that would have never occurred had a union been present, including raising the pay of some employees in a workgroup but not others as well as agreeing to provide an arbitration settlement only to part of the workgroup who challenged the company’s handling of the situation.

B6 has a choice to either fix the situation for all employees in the workgroup or run the very high risk of seeing a union voted in, which very well could change the culture the company has tried to foster for years.
OTOH, the settlement will be very costly and have significant financial repercussions for the company. They continue to feel the impact of a changed and much more competitive environment in NYC while trying to expand in regions of the country such as Latin America and BOS where they don’t have the same advantages which they once had in NYC.

B6 is at a strategic crossroads and this arbitration ruling could well be a key part of the case. How the company handles the case could have an enormous impact on the future of JetBlue.

 

[700UW]

Even tough B6's pilots are non-union, they have five year renewing contracts with each pilot.

 

[WorldTraveler]

and it is the EACH part that is troublesome... B6 can offer terms to one group of employees in a workgroup to the exclusion of others... that type of concept doesn't exist in the US airline industry.

 

[NewHampshire Black Bears]

and it is the EACH part that is troublesome... B6 can offer terms to one group of employees in a workgroup to the exclusion of others... that type of concept doesn't exist in the US airline industry.

Methinks ALPA is very close-at-hand !

 

[WorldTraveler]

obviously the B6 pilots have to decide for themselves if they can do better with a union but I have a hard time understanding how pilots in the US can accept a system where the company can negotiate salaries individually with pilots - or with subgroups of them.
That type of system exists in other countries including esp. in Asia where foreign pilots are brought in alongside national pilots but no other US airline has succeeded at doing that.. .and I have a hard time believing that there are any B6 pilots who really are better off w/ this system than under a single contract.

 

[DHC8Driver]

obviously the B6 pilots have to decide for themselves if they can do better with a union but I have a hard time understanding how pilots in the US can accept a system where the company can negotiate salaries individually with pilots - or with subgroups of them.
That type of system exists in other countries including esp. in Asia where foreign pilots are brought in alongside national pilots but no other US airline has succeeded at doing that.. .and I have a hard time believing that there are any B6 pilots who really are better off w/ this system than under a single contract.

You have been doing a lot of pontificating on a subject you clearly know nothing about.
JetBlue has a uniform contractual rate of pay, which is identical in every pilot contract. Pilots do not negotiate an individual pay rate and no group of pilots is paid differently than any other group of pilots.

and it is the EACH part that is troublesome... B6 can offer terms to one group of employees in a workgroup to the exclusion of others... that type of concept doesn't exist in the US airline industry.

It doesnt exist at JetBlue either. All pilots in the same seat, and same longevity, make an identical rate, have an identical contractual rate.
This whole 3a was about the fact that in 2007 ish, JetBlue was having problems filling newhire classes, in part, because of a very low first year new hire rate. JetBlue raised the 1st year rate. All current pilots at JetBlue who were in their 1st year got a pay raise. There were no first year F/O's on a different scale than newhires.
The problem was, section 3a stated that specifically, if first year rate goes up, then ALL scales go up. All pilots rates went up, but not at the same percentages, and that caused the problems.

So WWT, 700UW is absolutely correct, and just like your beloved ALPA contract, JetBlue has a contract scale. Just like an ALPA contract, JB contract has a grievence process, Just like an ALPA contract, an arbitrator heard the case when MGT and pilots could not come to agreement. Just like an ALPA contract, the arbitrator heard the case, and found in favor of one of the parties for PART of the grievence. Just like an ALPA contract, JetBlue will have to make the parties whole once a ruling has been made.
And if JetBlue decides to create differential pay rates for same class of pilot, depending if they were party to the grievence, then ALPA will most likely have 2500 new dues paying members before the end of the year.

 

[WorldTraveler]

The problem was, section 3a stated that specifically, if first year rate goes up, then ALL scales go up. All pilots rates went up, but not at the same percentages, and that caused the problems.

thank you.
That is all we need to know and it does indeed confirm that B6 did unilaterally change the pay for a subset of pilots to the exclusion or unequal benefit of ones over the others.
I think my understanding of the situation was pretty close to accurate.

Any word on whether B6 will be raising the pay of all pilots to the same amount and paying the backpay, even the part that was waived or removed from the negotiations?

Are the estimates of the amount of the backpay that B6 might have to pay anywhere near the hundreds of millions of dollars that some of your coworkers believe it is?

Because if it is, then it does have significant financial repercussions to B6, does it not?

BTW, I don't think any union-represented airline employee group has ever agreed to raise pay levels for new hire employees at a higher rate than their existing employees, but perhaps you can help me recall that situation if it occurred.

Glad you checked in.