I voted yes on the TA because I don't want to risk the CBA being rejected. I think it's going to be worse if that happens. This is the 1113 process:
Summary of Section 1113© and (e) Contract Rejection Process
In bankruptcy an airline collective bargaining agreement entered into under the Railway Labor Act can be rejected by the Bankruptcy Court under Section 1113 of the Bankruptcy Code. The Railway Labor Act does not provide any protection from contract rejection under Section 1113. Section 1113 empowers the Bankruptcy Court both to order interim, i.e. temporary, changes to a Contract and to order permanent rejection of the Agreement.
Interim Contract Changes:
Section 1113(e) of the Bankruptcy Code provides as follows:
(e) If during a period when the collective bargaining agreement continues in effect, and if essential to the continuation of the debtor's business, or in order to avoid irreparable damage to the estate, the court, after notice and a hearing, may authorize the trustee to implement interim changes in the terms, conditions, wages, benefits, or work rules provided by a collective bargaining agreement. Any hearing under this paragraph shall be scheduled in accordance with the needs of the trustee. The implementation of such interim changes shall not render the application for rejection moot.
Immediately after filing for bankruptcy the Company can ask the Court to make temporary changes to your Agreement. The hearing on that request will be scheduled “in accordance with the needs of the trustee†(which means the Company) and that hearing will likely be held within a day or two after filing for bankruptcy. The Court can order that your wages be cut and work rules be changed. The Court can even order that your contract rights, such as system protection, be immediately suspended. These interim contract changes will remain in effect until the Court rules on the Company’s Application for permanent rejection of your Agreement under Section 1113©, which is discussed below.
Permanent Contract Rejection:
Section 1113© of the Bankruptcy Code provides as follows:
© The court shall approve an application for rejection of a collective bargaining agreement only if the court finds that -
(1) the trustee has, prior to the hearing, made a proposal that fulfills the requirements of subsection b(1);
(2) the authorized representative of the employees has refused to accept such proposal without good cause; and
(3) the balance of the equities clearly favors rejection of such agreement.
Section 1113© authorizes the Court to order that your Agreement be permanently rejected in its entirety, allowing the Company to unilaterally implement whatever wage reductions, work rule changes, or modifications to your pension and medical benefits that it wants.
Unlike interim changes, which can be ordered without any negotiations, permanent rejection of your Contract under Section 1113© can be ordered only after the Company has made a proposal for changes to the Agreement which it believes to be “necessary†for it to successfully reorganize. The Company has already provided AMFA (and all other unions) with its Section 1113 proposal, which is being distributed to you in a separate handout.
The Company must also provide the union with information, which it has already done, and negotiate. However, the opportunity for further negotiations is almost non-existent, as another provision of Section 1113, subsection (e), provides that the hearing on contract rejection can be scheduled as early as 10 days after applying to reject the Agreement, and must be held within 14 days after that date.
The Courts have interpreted “necessary†changes to the Agreement not to be the bare minimum changes which the Company needs to survive, but rather, the changes the Company believes it needs to reorganize and operate successfully long-term. The Court will defer to a Company’s view of what changes are “necessary.â€
If the Union refuses to agree to the Company’s proposed Contract changes without “good causeâ€, and if the Court believes that the “equities†balance in favor of rejection, then under Section 1113© the Court will simply order that the entire Agreement be permanently rejected, completely freeing the Company from all its obligations under the Agreement.
At the hearing on contract rejection the Court will not get into the details of the Company’s proposal or consider arguments as to the specifics of how the Agreement should be restructured. The Court will simply order that the contract be rejected, or not rejected.
If the Company can convince the court of it’s dire financial condition, the court would find that there would not be good cause to reject the Company’s 1113 proposal and that the balance of the equities would favor rejection. The result would be that your Contract would effectively no longer exist, the Company could impose unilaterally whatever wage reduction, work rule changes, or benefit elimination or changes that it wanted. Moreover, the provisions of your Agreement, which were preserved through the proposed consensual Agreement now before you for ratification would be lost.
Also, this is what the flight attendants are telling their members:
The choice comes down to this:
With a FOR vote, we have an enforceable Contract that preserves our work rules, healthcare, and bolsters our legal position to defend our defined benefit pension.
With a vote AGAINST, we face rejection of our Contract followed by management imposing what it wants well beyond exit from bankruptcy.
Be clear about the decision you are making for our future. Consider the circumstances of an aviation industry in turmoil and then make sure that your ballot is cast in the best interest of you and your family. If you do not cast your ballot, others will make your decision for you. Do not presume that those who have voted have come to the same conclusion you have reached with regard to our collective future.