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  • 1113(c) of that process is used to obtain PERMANENT changes.

  • 1113(e) of that process is used to obtain TEMPORARY (“emergency” relief) changes
Example:
It was under a Section 1113(c) that the Restructuring Agreement, effective May 1, 2003 , came into effect. Absent this agreement, the court would have ruled on whether to accept or reject our Contract.

United’s Bankruptcy Judge Eugene Wedoff made the following statement in court on April 30, 2003 when approving the six-year concessionary agreements between United and each of the Unions, “… the power of the Court in a situation like this is really very limited ... the only power the Court has is to either grant or deny a motion by the debtor to reject a collective bargaining agreement. It's an all or nothing proposition. The parties themselves have the opportunity to create solutions of considerably more subtlety and appropriateness for the case.”


Section 1113(e) Motion Review

Section 1113 (e) allows a debtor to ask the court for temporary or interim relief on an emergency basis. The Company must show that the changes sought are “essential to the continuation of the debtor’s business” or needed “to avoid irreparable damage” to the Company. Unlike the bankruptcy code under Section 1113(c), the court has more latitude to determine the application of changes to a collective bargaining agreement.

Example:

It was under a Section 1113(e) motion that the Interim Relief Agreement, effective January 1, 2003 , went into “emergency” effect for nearly 9% cut in our wages. It was under this motion that the International Association of Machinists and Aerospace Workers Districts 141 and 141-M (IAM) refused a consensual agreement for a 13% “emergency” wage cut and the court subsequently imposed a wage cut of 14%.

On October 15, 2004, US Airways employees experience the effects of a Section 1113(e) motion when after several days of hearings that included arguments from the Union, the court imposed a 21% pay cut in addition to a few other productivity modifications on all employee groups except the pilots who had reached a consensual agreement for permanent cuts through the Section 1113(c) process. The court also ruled that the emergency cuts remain in place for a period of four months while US Airways seeks permanent cuts through a Section 1113(c) process.

While the example of Section 1113 at US Airways helps us understand the Bankruptcy Code, it should be clear that the circumstances at US Airways are very different from those at United Airlines.
 
Do employees have any recourse in the event of imposed modifications or rejection of a collective bargaining agreement?
Employees can engage in a strike and other forms of self-help such as protests.

http://www.unitedafa...13_summary.aspx


Time line as put out by the TWU i believe.......ends up with sec 6 they say..... But are they right?

http://www.twulocal5... Flow Chart.pdf

II. Overview of the § 1113 Process

A debtor seeking to reject a collective bargaining agreement must follow a specific process dictated by § 1113 itself and clarified by case law. Before the debtor may seek judicial assistance, it must first try to resolve its labor issues consensually. This entails making a proposal that contains the terms necessary to permit reorganization; treats the debtor, its creditors, and its employees fairly and equitably; and is based on the most complete and reliable information available. The debtor must meet with the union and negotiate in good faith. Absent consent from both debtor and union, a § 1113 motion must be resolved on an expedited schedule: fourteen to twenty-one days from motion to hearing, and thirty days from hearing commencement to decision. Interim relief is available upon a heightened showing that the requested changes are essential to avoid liquidation or irreparable damage. Only once the union has refused the debtor's proposal without good cause may the debtor reject the CBA and impose new terms. Rejection does not alter the union's status as the employees' authorized representative—the debtor is obligated to bargain with the union in accordance with applicable labor laws following rejection. Non-airline unions governed by the NLRA are generally free to strike post-rejection; under the RLA, airline unions are not, absent a manifestation of bad faith by the debtor.
 
I can't say much about the rules of this but it's obvious the company sees a way to make some serious money and they've no intention of sharing, hence a 6 year contract duration.

Three year max duration with an early opener provision will be another plus to get a deal passed.

Exactly Frank. Was there any language in the agreement for a provision of a " Snap-Back " to prevent permanent terms of throwing out the CBA? Courts favor snap-back provisions in modification proposals "because they ensure that once a company is profitable enough for successful reorganization, further profits not 'necessary' for reorganization are returned to the employees who made the concessions."
 

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