Bloomberg News

American Airlines Asks Appeals Court to Block Union Vote

October 01, 2012

AMR Corp. (AAMRQ:US)’s American Airlines, the bankrupt airline that is cutting labor costs, faced sharp questioning from a federal appeals court over its effort to block an employee group’s union vote.

American argues that a union representation election among passenger service employees can’t move forward because the National Mediation Board used an outdated standard when it authorized a vote.

Judges for the U.S. Court of Appeals in New Orleans today said the standard changed after the Communications Workers of America applied to represent the workers.

“You are basically moving the goal posts in the middle of the game,” Judge Catharina Haynes told American’s lawyer.

The carrier sued the Mediation Board in May after it authorized the vote. The board “grossly exceeded” its authority by basing the decision on a “showing of interest” among 35 percent of the employees instead of the new 50 percent standard, American said in papers filed with the appeals court.

“You already have ongoing proceedings,” Judge Patrick Higginbotham told the airline’s attorney. “It’s a done deal. Now it’s a question of who is going to vote for it.”

Company Arguments

The agency argued that its decision to apply the lower standard was a “permissible interpretation” of the law that shouldn’t trigger judicial review. The district court “improperly intruded into the NMB’s sphere,” the mediation board said in papers filed with the appeals court.

U.S. District Judge Terry Means in Fort Worth, Texas, in June sided with American. Means ruled that the 50 percent standard applied because, while the application was submitted under the old law, the board approved the election after the new one went into effect. The board and the CWA appealed.

The Fort Worth-based airline, which blamed its bankruptcy on high labor costs, has negotiated cost-cutting deals with unions representing flights attendants, mechanics and other workers. It won bankruptcy court approval to impose cuts on pilots, who rejected a contract offer.

Marianne Auld, an attorney for American, told the three- judge panel that a ruling in favor of the board and union would hurt the airline.

Holding an election after the district court ruled in American’s favor “adds uncertainty” to the carrier’s future, affects “public perception” and the airline’s relationship with its employees, Auld said.

The panel didn’t indicate when it will rule.

The case is American Airlines Inc. v. National Mediation Board, 12-10680, U.S. Court of Appeals for the Fifth Circuit (New Orleans).

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net


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