AMR Corp., unsurprisingly, has rejected union attempts to have the National Mediation Board (NMB) oversee contract negotiations, rather than the company’s Chapter 11 bankruptcy court, arguing that the unions are simply conducting “a coordinated litigation and public relations strategy.”
The three unions—the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA) and the Transport Workers Union—maintain that because their contracts were under NMB mediation prior to AMR’s November Chapter 11 filing, the government agency maintains authority over those talks even though U.S. bankruptcy law grants the courts jurisdiction during a reorganization.
Replacing the courts with the NMB would curtail AMR’s ability to impose new contract terms through the court structure and would provide the unions with some remedies should they disagree with the company’s new contract proposals.
AMR Senior VP-Human Resources Jeff Brundage, in a letter to NMB board members, notes that prior to the Chapter 11 filing the company “spent more than four years seeking consensual agreements with its unions, without success,” and that this impasse forced the company into the bankruptcy court.
“In this context, the unions’ request for a “proffer” is either intentionally misleading or extraordinarily political,” Brundage adds, noting that the APA’s own constitution does not permit arbitration “without a lengthy delay required by an amendment process.”
Section 1113 of the bankruptcy code, continues Brundage, provides independent oversight through the courts, while mounting losses dictate that the company broker new labor contracts soon. “For all these reasons, American believes that it is not appropriate to abandon the judicial process so carefully laid out by Congress in Section 1113 in favor of arbitration,” he says. The NMB, which was sent the letter March 16, is not commenting publicly on the matter.
Union reaction was swift, with APFA calling Brundage’s letter “incredibly misleading” and saying that AMR is using Chapter 11 to reject changes to labor contracts agreed under pre-petition negotiations. “We are committed to the success ofjust as we are committed to the fair treatment of our colleagues and we know that those goals do not conflict. We will continue to offer creative and innovative proposals to achieve both of these objectives, and we hope that we will be met with more open-minded decision-makers going forward,” adds the flight attendant union.