FRH – 12.10.14

 

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FACT Rep Update – December 10, 2014
Flight Attendant Communications Team

 

FACT: On Monday, APFA President Laura Glading sent a letter to AA CEO Doug Parker on behalf of the Joint Negotiating Committee requesting a meeting as soon as possible following the issuing of an award by the interest arbitration panel. Both the APFA BOD and JNC have made it clear they remain committed to achieving the full $193 million in annual improvements that AA was prepared to pay in the T/A. The Negotiations Protocol Agreement limited APFA to a contract that is market-based in the aggregate ($112 million in annual improvements) as the ceiling in arbitration.  

FACT: This week, the arbitration panel will be reviewing the exhibits and testimony of the union and company witnesses. The three arbitrators have called for the two union and two company panel members to meet in an executive session on Saturday, December 13th in Washington, D.C., to discuss a resolution of the issues raised at the hearing. If a decision is reached by the end of this session, the arbitration panel will provide it in writing shortly thereafter. 

FACT: To recap last week’s arbitration proposal:

• APFA proposed that the value of $112 million is the amount that the arbitrators must add to our combined contracts to equal market-based in the aggregate. AA stipulated to this value.
• APFA argued for a “me too” for health insurance, meaning that if the company offers another workgroup health insurance that differs from the health insurance in our JCBA, APFA will have the option of replacing our current insurance with such other health insurance beginning the following year. The company argued against a me, too for health insurance.
• APFA argued for a “me too” for profit sharing, meaning that if the company offers another workgroup a profit sharing plan, APFA has the option of reducing the wage rates by $50 million per year (the value allotted for profit sharing in our proposal) and adopting such profit sharing plan. The company argued against a me too for profit sharing.
• APFA asked for the increased pay rates to be retroactive to December 2, 2014. The company argued against retroactive pay rates.

FACT or fiction

Q:  Why didn’t APFA push for increased pay rates during arbitration instead of having the arbitrators rule for the reduced wages and then asking for the T/A wages back?

A:  Arbitrators must comply with the Negotiations Protocol Agreement (NPA), which restricts their authority to awarding a contract that is market-based in the aggregate. The value of a contract that is market-based in the aggregate, including profit sharing, is approximately $1.722 billion per year, an average annual increase of $112 million. The arbitrators cannot issue an award that exceeds this amount. Under the terms of the NPA, arbitrators are not authorized to provide more than “market-based in the aggregate.” To bring our contract to market rate (without profit sharing) means $61 million of improvements must be added to our current contracts (CLA and Red Book).

Adding the value for profit sharing (based on the company’s own published earnings reports and projections, APFA’s analysis of profit sharing potential and the market value of profit sharing), which brings our current contracts to true market rate, would mean another $50 million annually. Since the arbitrator cannot exceed Market Rate, this means $112 million of improvements to our current contracts is the cap at arbitration.

Q:  Why aren’t work rules being changed in arbitration?  

A:  Under the NPA, the arbitrators can only decide “outstanding disputes.” The only outstanding disputes are economic benefits: wages, premium pay, 401(k), medical, vacation and sick. In order to equalize the joint contract and achieve parity between the two legacy work groups, the APFA leadership and the JNC took the value out of the wage scale alone. Any other cut (i.e. health care, 401(k), premium pay, sick or vacation) would have created an imbalance between LAA and LUS in the resulting joint contract.

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Kelli Harrington, LAX-I
FACT Rep Coordinator