Judge levies $45.5 million fine against American Airlines pilots' union
By Jerry White
17 April 1999
In one of the largest fines ever levied against an American trade union, US District Judge Elton "Joe" Kendall Thursday ordered the Allied Pilots Association (APA) to pay $45.5 million in damages to American Airlines for last February's sick-out by AA pilots. The massive fine--$7 million more than the APA's net worth of $38 million--is designed to effectively destroy the union representing 9,200 pilots at American Airlines.
The judge's action stems from a 10-day job action by thousands of American pilots against contract violations and the outsourcing of jobs to American's low-cost affiliate Reno Air. The sick-out, which began on February 6, quickly got out of the control of the APA leadership and crippled the country's second-largest airline, forcing American to cancel 6,000 flights and disrupt travel for 600,000 passengers. In the course of the job action, rank-and-file pilots defied Kendall's February 10 back-to-work order. Three days afterwards the judge held the union in contempt of court and ordered APA officials to pay $10 million as a down payment on a future "eight-figure" fine.
On Thursday Kendall rejected arguments from union attorneys that cancellations following his back-to-work order had only cost the airline between $1.4 million and $4.7 million. Dispensing with even the appearance of neutrality, the Texas judge backed American's claim that it had lost $50 million, saying, "American Airlines is not going to want to go to the public and the stockholders and talk about taking that kind of hit without it being true." Kendall said the $45.5 million damage award was "a conservative" estimate of the harm done to American.
The judge, appointed to the federal bench by President George Bush in 1992, also disregarded arguments by APA officials that they had done everything to get their members back to work following his temporary restraining order. Kendall indicated that he may order APA President Richard LaVoy and Vice President Brian Mayhew to pay one-third of the award personally. Last February, Kendall said the union had supposedly been taken over by a "radical element" which was "determined to fly American Airlines into the side of a mountain."