NEW YORK — An appellate court has ordered "expedited arbitration" of a dispute between Delta Air Lines and labor unions at Western Airlines, which Delta has purchased.
Western officials warned that the order issued by the U.S. 9th Circuit Court of Appeals in San Francisco could delay the scheduled full integration of Western into Delta on April 1. Western employees are due to get pay hikes following the merger, and many are preparing to move to Delta's Atlanta headquarters in the next fortnight. A sizable number have already sold their homes.
Delta announced last September that it was purchasing Western for nearly $900 million. The merger took place officially in December, and Western has been operated as a Delta subsidiary since then. The Western name is scheduled to disappear at midnight March 31.
While all but 8% of Western's employees are unionized, only Delta's pilots are union members. At issue is whether the Western unions will continue to represent Western employees after the integration of the two carriers. Delta maintains that the unions are "extinguished" after April 1, but the unions contend that their contracts should remain valid.
Last fall, three unions--the Assn. of Flight Attendants, the Air Transport Employees (representing reservation agents, clerks and ramp employees) and the Teamsters (representing maintenance workers and others)--brought three separate lawsuits in federal courts. All three essentially sought arbitration of the so-called successor clauses in the collective bargaining agreements to compel Delta to recognize the unions and their agreements.
Western opposed the suits and opposed arbitration, saying the National Mediation Board is the the only forum to hear such a dispute.
The district courts agreed with Western and dismissed all three actions. Two of these dismissals were appealed to the U.S. 9th Circuit Court of Appeals.
The Teamsters' appeal asked for expedited arbitration, but it did not seek an injunction. Western said it was "astonished" by the order, issued as an injunction, because "the court is basically granting the very relief that the original lawsuit was seeking, before it considers whether the dismissal by the district court of that lawsuit was proper." The Air Transport Employees' appeal asked for the injunction, which was granted.
Teamsters Local 2707, headquartered in Los Angeles, insists that the terms of a 1961 election, which made it the bargaining agent for maintenance employees and others at Western, would still be in force after the merger.
More recently, when Western employees agreed to wage concessions to rescue Western from bankruptcy, a new clause was written into the contracts. It stipulated that the contract would continue in force in any merger or acquisition until union seniority lists were integrated with those of the surviving company. The agreement in which employees gave concessions required that Western inform Delta of the contract's existance. But, according to the Teamsters, this was never done.
In a letter to Western's 11,000 employees, Chairman Gerald Grinstein and President Donald J. Lloyd-Jones warned that "we believe that this legal situation could have the practical impact of delaying integration of the work forces, the anticipated (wage) increases and the effective date of the merger with all its benefits."
The pay scales of Western employees, who are paid much less than their Delta counterparts, will be raised over a three-year period. But Dennis Johnson, recording secretary of Local 2707, said the integration of the merger would not be held up. He said the two parties now have five days to choose an arbitrator who will hear the case in another 10 days.
A Delta spokesman in Atlanta, William Berry, said Delta would petition the court for reconsideration of its order. "We feel that the order is in error," he said. "The merger has gone smoothly to date and Delta regrets the uncertainty the Western employees must now feel as a result of the court's action."
Berry also said that the traveling public will not be affected by these legal actions and that the two carriers still plan to merge their flight operations, schedules and ticketing on April 1.
In another airline merger, the appellate court decision in the Western case could influence a Teamster court challenge to force Pacific Southwest Airlines into binding arbitration over a similar labor contract provision. USAir has based its pending, $400-million acquisition of the San Diego-based airline upon PSA management successfully negotiating similar labor contract changes with the Teamsters.
A federal district court judge in San Francisco last month ruled against the Teamsters, who represent 3,000 PSA employees. The union is considering an appeal to the U.S. 9th Circuit Court in San Francisco, the same court that ordered Western into arbitration with the Teamsters.
Times staff writer Greg Johnson in San Diego contributed to this story.