Q & A For Cwa Ta


Aug 20, 2002
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Q and A For the CWA-US Airways Tentative Transformation Plan Agreement - Part II
The first three questions pertaining to Attachment D of the Tentative Agreement have been answered by CWA inside and outside counsel.

Q: Regarding the language in Memorandum 4 of attachment D: Does this mean if the company is in grave or imminent danger it may seek authorization to reject the CWA-US Airways Section 1113 Waiver Letter or the CWA-US Airways CBA?
A: The Agreement prevents US Airways from seeking future 1113 relief prior to June 30, 2005, except in very limited circumstances: "grave and imminent danger that it will be forced to suspend, discontinue or materially reduce its mainline flight operations." During negotiations over this language, US Airways insisted that CWA agree to these terms (which also appear in the ALPA agreement), and we ultimately agreed, because we believe that the company is very unlikely to invoke this section, except in the most dire circumstances. It is important to note that the company may not unilaterally terminate the Agreement under this section. First, it must prove that "grave and imminent danger" exists. Next, it must go through all of the steps that Section 1113 of the Bankruptcy Code requires, including the negotiation process to reach an agreement with CWA. Finally, if unable to reach an agreement with CWA, it would need to meet the substantive standards of Section 1113 and convince the bankruptcy judge that the company still cannot survive without more contract relief. Because of these lengthy, uncertain and difficult steps, as well as the flexibility the CBA provides the company to deal with the challenging competitive environment facing the airline industry today, the company is unlikely to attempt this risky strategy in order to secure court-imposed modifications of the CBA in the absence of true emergency circumstances.
Q: The Section 1113 Waiver language says there is a June 30, 2005 termination date. Does this mean that they have to file to reject our contract prior to 6/30/05 or after 6/30/05?
A: Except in the dire circumstances discussed in response to the question above, the company is barred from seeking to reject the 2004 agreement until June 30, 2005, when it is expected to emerge from bankruptcy.
Q: Memorandum 6 says "This agreement will be an amendment to the prior CBA, BUT the prior contract will expressly not be "assumed" under the Bankruptcy Law in the court order approving it. Does this mean our current and previous CBA's are eliminated?
A: No, it does not mean that the 1999 Collective Bargaining Agreement is eliminated. Under bankruptcy law, when a company emerges from Chapter 11, pre-petition executory contracts, like CWA's collective bargaining agreement, either must be "assumed" or "rejected". Section 1113© requires that before a company may reject a collective bargaining agreement, it needs to meet the substantive and procedural standards specified in that provision of the Bankruptcy Code, including negotiations with the CWA and hearings in open court, which as you know have been going on for some time. However, the company has agreed that upon ratification of the 2004 Agreement it will withdraw its present Section 1113© motion to reject our contract. So, as discussed in the responses to the first two above questions, we view it as highly unlikely that the company would ever seek to "reject" our contract. All this section says is that the 1999 Agreement will not be "assumed" in December 2004, when the bankruptcy judge approves the 2004 amendments to the 1999 Agreement. For legal reasons, we anticipate that the company will "assume" the 1999 Agreement as it emerges from bankruptcy. This technical language does not affect the status of our 1999 or 2004 Agreements at this time and does not negate the bankruptcy court’s expected approval of the 2004 amendments to the CBA.

Ratification voting process:

Q: When will I receive my voting packet and when will the voting begin and end?
A: Wednesday, Dec. 8, 2004, the American Arbitration Association sent out voting instructions and a personal identification number (PIN) to those members who are eligible voters. The voting system was activated that evening.
Voting will end promptly at 12:00 PM EST on December 23, 2004.
If you do not receive instructions and a PIN by December 15, 2004, please contact your local. Your local can verify your voting eligibility and help you obtain a packet and PIN.

NOTE: EO travel benefit details will be sent out in the next Q and A with any other questions the CWA locals receive.

CWA Loclal Officers and Staff