DCA Domicile Update: November 14, 2011
Fellow DCA Pilots,
As we finished writing this on Veterans Day, we would like to acknowledge all of you who have proudly served our country in the Armed Forces. Thank you for your service and we also remember those who continue to serve at home and abroad. Now down to business.
Many of you have been calling, emailing or pulling us aside in the crew room to ask what is going on with the Court Order against USAPA, our legal firms, LOA 93, negotiations, spending and other questions, so let's begin.
District Court of North Carolina Order against USAPA
As we've mentioned in our previous update, then read at our September Domicile Meeting, and posted on our bulletin board in operations, USAPA is operating under a Court Order which specifically states that we have to comply with federally mandated guidelines to ensure a normal operation of our airline. In the interest of brevity, we will not include the entire Order once again in this update, however we strongly encourage you to read its contents and understand your obligation. As we have also mentioned, it is posted behind the glass on the USAPA bulletin board in the DCA crew room and is also available on the USAPA web site. It is imperative that everyone understands that it is not only the union as a whole, or its officers or leadership who are responsible for full compliance, but that each of you individually may also be considered to be in contempt of court if you are found to be guilty of any violation of this Order. This means that line pilots may also be subject to court imposed fines and discipline, so please understand the importance of your compliance. As we have also pointed out in our previous update, this order does not preclude your requirement and rights to act as a federally licensed pilot and crewmember. Our attorneys are working towards getting a clarification from the Court to ensure that our rights as pilots are not violated, but that accomplishing our normal duties is not perceived as a breach of this Order. Once we have received this clarification we will get it out to you as soon as we possibly can. Until then, continue to be the professional airline pilot that you are and utilize your many years of experience to gauge your limitations and determine what is safe and what you deem to be unsafe.
Legal Firms Representing USAPA
This past spring, the Pension Investigation Committee, (PIC) brought a request to the BPR to engage the services of O'Dwyer and Bernstein, a legal firm in New York, to assist the PIC in the handling of legal issues as there was an apparent conflict of interest between their previous legal firm and one of the banks involved in the investigation. The BPR approved the utilization of this new firm at our Spring BPR meeting. On a subsequent conference call, the BPR approved their retainer agreement which also included the language that the firm of O'Dwyer and Bernstein would work under the direction of the USAPA President. Both of us were under the impression that this firm would strictly be working with the PIC. However, the approved language in their retainer agreement made no stipulation to that effect and while some other BPR members shared our perspective of implied work, others did not. About a month or so later we learned that President Cleary was using this new legal firm, not only for the PIC, but also to file our Preliminary Injunction in New York against US Airways for violations of our status quo. Several months later, when the company filed an Injunction against USAPA in Charlotte, the firm of O'Dwyer and Bernstein became the obvious choice to defend these new charges as they were intricately involved in the similar New York case.
The DCA update of 29 September provides details regarding the background of potential billing concerns with Lee Seham and his firm and our viewpoints on the issue, as well as the fact that the BPR approved a billing audit of all legal firms doing business with USAPA. This audit is underway and the statement has been made by President Cleary that the Seham firm has not been in full compliance with the request for information to conduct this billing investigation. The sudden need for an audit and the alleged lack of cooperation has not been fully proven in our opinion. In addition, President Cleary has directed the withholding of any additional payments to the Seham firm until the satisfactory completion of this audit. We are concerned that a decision has been made that appears to find guilt before completing the investigation and also to not fulfill our contractual obligation by not paying for work we have contracted to be done. All while officers continue to publically criticize a previously trusted vendor and then wonder why the firm became uncooperative.
Legal -- October
While dealing with the self-created, deteriorating working relationship with the formerly trusted law firm, we were notified of scheduled activity and short deadlines on the Declaratory Judgment (DJ) lawsuit in PHX and scheduling of hearings. The BPR had to assess the situation and determine which legal firm would be the correct choice to represent the best interests of all of our pilots as this case begins. The three PHX representatives shared their perspectives and then requested to leave the conference room for the remainder of this discussion to avoid a potential conflict of interest situation and allow the rest of us to determine our legal direction on this issue. While these discussions were held in closed session, we can tell you that extensive consideration of both firms was addressed and healthy debate ensued for several hours. After recalling the PHX representatives back into the meeting and going back into open session, your BPR unanimously (aside from the three expected abstentions from PHX) chose to have the O'Dwyer and Bernstein firm, and primarily attorney Pat Szymanski, represent our interests on the DJ lawsuit in PHX. This was not an easy decision to make for any of us, but when weighing all of the issues involved we believe it is in our collective best interests to do so at this time and on this case. The BPR has elected to not appoint any one specific firm or attorney as our General Counsel at this time.
We still have a resolution which we have brought to the BPR, awaiting action which would require the formal approval of the BPR prior to filing any new litigation as well as an interview process by the BPR to comply with Union Operating Manual requirements, of at least two firms prior to engaging in any contracts with any new firms. It is our intent to ensure that this resolution will be submitted for action at the next BPR meeting.
This chronology of events is accurate. There are no "tall tales", "yarns", evidence of plots to "overthrow officers" or for that matter any "secret phone calls". All of those allegations were in the recent, re-election campaign letter, sent out titled "President's Message-The Lee Seham Issue".
We want to make this perfectly clear, your DCA representatives do not care WHO represents USAPA as long as it is done by the most competent professionals available that can work with our personnel and be affordable by our budget. We do find unacceptable, the manner that all legal strategy and decisions through October 2011 have been kept secret from your elected representatives until the only option is rubber stamping and defensive reactions.
Hopefully not too little too late, the BPR finally received an update and a chance for discussion on legal strategy at our November 9th meeting. We hope that BPR consultation will continue to be sought as we proceed with the ongoing legal cases and issues. Unfortunately, there is still no agreement on how to pay for the growing legal expenses or the prioritization of the cases.
The impact that changing law firms and working on multiple law suits has on the budget is addressed below under "Spending". In our opinion, we are in this excessive spending situation simply because of personality conflicts between two officers and our old law firm. These personal disagreements have played a large role in defining where we are today in the shuffling of legal teams and billing audits.
The questionable spin presented by the President, that people are attempting to "overthrow officers" and have "secret phone calls" with legal counsel, demonstrates a large part of the problem. Legal counsel represents USAPA, not the President. Because the President usually operates in a secret mode, the BPR had to pass a resolution earlier this year clearly stating how communication could be made between legal counsel and BPR members. A phone conference call was made between four Board members and Lee Seham in full compliance with that policy which has been discussed in previous updates. This conversation was no more "secret" or illegal than any number of Board members having a discussion with each other when the Board is not in session.
The only "secret" part of that call was that the President was not on it! One can only wonder why your President did not want Board members talking with your attorney. The only other possible "secret" call the BPR had with legal (that also did not include the President) was earlier in the year when, to protect USAPA, we needed legal advice on how to proceed in the investigation of alleged criminal assault charges involving our officers. Since the President was in the office during this alleged incident and could have been a witness to the event, the majority of the Board chose to conduct this particular call without any officers present. This call was probably the beginning of the end for Lee Seham with USAPA.
As for the comments made in the recent President's Message pertaining to the "overthrow of officers", we would like to point out that not only was there never any reference made to that assertion but that constitutionally, that is not possible. To recall any officer would require a 2/3 majority vote of the BPR to recommend that action and then place the decision in the hands of the line pilots with a resultant vote of more than 50% in favor of removal. Unlike ALPA, your elected representatives do not choose who serves, and who we no longer want to serve, as your officers. You do.
Concerned yet? You, the pilots are the body that directs this union as we mentioned in our "Democracy in action" update. The BPR is responsible for acting on your behalf and directing the officers and committees to achieve our collective goals. We have repeated situations where BPR members had to seek information and reasons for officer action, due to secrecy. We CLEARLY have a right and responsibility to know what and why decisions are made. We will not sit quietly by while the organization is driven towards a cliff.
LOA 93
We fully understand and share your frustration in still not having a conclusion to our LOA 93 arbitration. At our BPR meeting in CLT on October 25th and 26th, we asked President Cleary specifically if we were in possession of a draft ruling from Arbitrator Kasher. We were told that we are not in receipt of any additional information since we were last briefed by our Grievance Chairman in early October. Suffice it to say, it appears that we are in the final stages of this process but when we will have a definitive ruling is still anybody's guess. We realize that rumors are rampant and are all over the spectrum, but please understand that we have not been given any information whatsoever on any decision being reached, or even any opinions on which way he may rule. When we learn anything about the decision we will get the information to you as soon as we can.
Negotiations
At our BPR meeting in CLT in late October, we received a detailed briefing on contract proposals from NAC Chairman Paul DiOrio which was presented to the company this week. For obvious strategic reasons, this presentation was held in closed session and the information in the proposal was confidential until presented at the table. Since these mediated sessions have taken place earlier this week, we anticipate that our comprehensive proposal will be distributed to you in the near future. We can only hope that now there will be some movement and viable proposals forthcoming from the company. We hope to prove to the mediator that our positions are reasonable while attempting to demonstrate that the company's positions clearly are not while they benefit from delay tactics.
Spending -- October Meeting
As you might imagine, the addition of USAPA's Preliminary Injunction filed against the company in New York as well as the defense of the company's Injunction against us in Charlotte has not been cheap. More lawsuits and practically DOUBLING the hourly rate spends a lot of money fast. Getting into the beginning stages of the DJ lawsuit in PHX with a different firm leading our charge adds to our legal costs. We did learn that much of the background research required for our DJ lawsuit by attorney Pat Szymanski has allegedly already been accomplished and paid for while researching that case during preparations in filing our Injunction against US Airways in New York. You may have heard that there are also other lawyers mentioned in our legal filings. They are local counsel licensed in Arizona to allow our attorneys to work in that Court. When our annual budget was passed back in April, we did not foresee these two additional lawsuits, the doubling of our hourly rates and the legal costs associated with them. In short, Secretary/Treasurer Streble informed the BPR in October that we would need to find an additional $1,800,000.00 to pay for current and proposed future legal costs through the end of our fiscal year in March 2012.
The Secretary/Treasurer presented the BPR with a budget resolution that would have increased the annual budget by almost 20% with an addition of approximately $1.93 million. While items in the budget were adjusted and monies moved from here to there to help pay for these additional expenditures, we would still be considering a budget resolution which would have us operating seriously in the red. It took a while before anyone moved the resolution and it almost died for lack of a second. Once it was finally, and somewhat begrudgingly, moved and seconded, both of us spoke against the motion and reminded everyone of our fiscal responsibility to the pilots. We have been asking throughout the year, as have others, how we were going to pay for the addition of new attorneys and other firms as well as the addition of two full time NAC members and now finally the bills are coming due. We proffered, and seconded, an amendment which limited the budget for the NAC and which reduced the budget addition by approximately $100,000. After discussion and debate by the Board and the NAC, both of us decided that this minimal reduction would not be worthwhile and withdrew our amendment. A vote was then held and the budget resolution failed by a significant majority (almost 73%). Our view is that the Board effectively made a statement that we will not sit idly by while your dues dollars are being spent and that we need to pull up our bootstraps and get our fiscal house in order.
We took a brief recess to collect our thoughts and we asked the Secretary/Treasurer to try to come up with a budget which would keep us financially solvent until the end of November. Ultimately, we passed a resolution to that effect with an addition to our budget of approximately $167,000 and tasked the President to work with the Secretary/Treasurer to come up with viable numbers which allow us to minimize our expenditures as much as possible as well as for all of us to reemphasize the spirit of volunteerism.
Spending -- November
On November 9, the budget amendment was updated to ask only for $1.1 million in legal fees combined with various significant cuts from many sections of the entire USAPA budget that would require about $900,000.00 added to the budget to complete the fiscal year. These budget reductions were made possible because both the President and the Secretary/Treasurer sat down and worked together on this difficult task and we both appreciate that hard work. The BPR then spent about six hours discussing this revised budget request. On top of the additional legal expenditures, we also have the added FPL and ancillary costs of two members added to the NAC back in late May. The NAC had been budgeted for only three members when the BPR approved their budget in the spring, but they have been operating with five for the majority of the fiscal year to date. Therefore, the NAC needed additional funds to balance their spending year to date. We had previously questioned the need for the added members, the benefit at the negotiating table or the hundreds of thousands of dollars that their additions would require. We were then informed that one NAC committee member was not going to be able to participate for an extended period of time, thereby reducing some NAC expenditures. The BPR subsequently removed the funding of full FPL for another NAC member, along with a couple of pilots from other committees for a significant reduction in any budget increase. The BPR finally approved a budget amendment, ONLY FOR THE REQUESTED REDUCTIONS.
The BPR still has not authorized the increased legal expenses. We plan on having a conference call within the next two weeks when the lawyers can answer questions the Board has on legal costs and court scheduling before we act on the requested increase in the legal budget. Your DCA representatives want to be sure that your money is spent in the proper order on issues with the best chance of benefiting the pilot group. We do not support the concept of retreat or surrender, but we do support smart representation and the prioritization of issues that clearly will support the goals of USAPA.
USAPA Bulletin
When the BPR met in October, we were pleased to learn that we had made progress towards joint cooperation between USAPA and Management, with the inception of a joint "Bulletin" which had been agreed to by both parties. Your union went to great lengths to ensure that this product would not contain any political statements or material that could be inferred to be harmful towards the company. When we met on November 9, we were presented with this bulletin by the Vice President. Clearly a lot of hard work had been involved in its production and in our view, is a well done, informative and professional product which benefits both the company and USAPA. We were briefed that we had entered into an agreement with the company that allowed these USAPA Bulletins to be distributed in your mailboxes and V-files at work, similar to the process which allowed the Airwaves publication from ALPA to be disseminated in the past.
While this product was in the print shop, VP Mowrey learned that Captain Ed Bular had "changed his mind" and would no longer be allowing that method of distribution. Therefore, these bulletins should be arriving in your personal mailboxes within the next few days at your union's expense. Once you read it, you can be the judge in determining if you believe that this contains any material offensive to management. We are extremely discouraged to learn that just when we thought we could have some mutual cooperation take place between your union and the company, we find ourselves back to square one. The VP will continue to work with management to try to see if we can work cooperatively on any topic.
In closing, we would like to say that for the most part that we believe the BPR worked well together in addressing our fiscal responsibility this week. The entire Board understands the importance of this issue and is working collectively to find resolution. As these and other developments continue, we will be updating you accordingly. Fly safe as always, stay focused and we will see you on the line.
Joe Stein
DCA Chairman
Jstein@usairlinepilots.org
Pete Dugstad
DCA Vice Chairman
Pdugstad@usairlinepilots.org
Or reach us both at
DCA@usairlinepilots.org
