FRH – 10.01.14

 

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FACT Rep Update – October 1, 2014
Flight Attendant Communications Team

 

FACT or fiction?

Q:  The Negotiations Protocol Agreement says that if the T/A is not ratified by the membership, the parties will use mediation before going to arbitration.  Some Flight Attendants think we should vote the T/A down and then get a better deal in mediation – without ever having to go to binding arbitration.  Why isn’t that right?
 
A:  If this Tentative Agreement gets voted down, the Negotiations Protocol Agreement mandates that the outstanding disputes get sent to binding arbitration within 90 days. There will not be another ongoing round of negotiations if this T/A is rejected. The mediation that follows a “no” vote, if any takes place, will focus on narrowing down the issues we will decide in arbitration.  

To put the situation in context, our T/A is worth about $193 million more annually than the current value of the two contracts (LUS and LAA) combined. “Market rate” is approximately $111 million annually above the current combined value. Since “market rate” is the standard for arbitration, any agreement we reach in arbitration will likely be approximately $82 million annually below the value of this T/A. 
Simply put, this is not like traditional Section 6 negotiations where an agreement gets voted down and eventually the parties get back to the table, which typically results in Flight Attendants losing tens of millions dollars. 

The Negotiations Protocol Agreement says, “Prior to arbitration, the parties shall use mediation.”  That provision was put into the agreement based on the idea that if the union and the company were not able to reach an agreement by the end of the 150 days of negotiations, we could try a last ditch effort to bridge the gap. The reality is, we have been in negotiations for 150 days and all during that time they have been overseen by Jim McKenzie, a mediator selected by the parties and appointed by the National Mediation Board. 

We have no doubt that the mediator made every effort and used all his experience and skill to move the parties to an agreement. The end result is a T/A that is worth at least $82 million a year above the market rate, the standard the arbitrators cannot exceed. 

The following reasons make it highly unlikely that this mediator or any other mediator could convince the company to put more money on the table following the rejection of a T/A: 

• The company has stated very clearly and repeatedly that the T/A is its final offer and that we will go to arbitration if it is rejected. Management believes that they have exhausted the possibilities of mediated negotiations, and would have little “use” of further mediation prior to arbitration. 
• Considering the amount of mediation that has already taken place, any mediation that occurs before arbitration will probably be limited to narrowing the number of issues that would be submitted to arbitration. If the T/A is rejected, the issues in dispute are all economic including wages, healthcare, retirement contributions, etc. Together, the values of each economic component comprise a comprehensive package. None of them can be settled without affecting the overall cost of a JCBA. If the arbitrators improve one component, it will mean the money has to come from other components – and all combined within a mandatory framework of a total value that is $82 million less than what we achieved in the T/A
• In mediation, the company would have no incentive to put anywhere near $193 million in annual improvements on the table, knowing the worst it could do in arbitration would be $111 million a year beyond the combined value of our current contracts combined. It is no secret that the company does not want to encourage any labor group to reject a first T/A in the hope that a second T/A will be better. With negotiations ongoing at American and other work groups, the company will not want to set a precedent of rewarding “No” votes with better T/As. And for us, if the T/A is rejected, there will not be negotiations for another T/A.  Instead, we will have our contract decided in arbitration, and we will lose about $410 million dollars over the life of the contract. 
• The company agreed to a T/A that is so much richer than the outcome of an arbitrated contract because the T/A is the product of good faith negotiations and requires ratification by the Flight Attendants. The value of these successes and their positive impact on labor relations will be completely lost if the arbitrators dictates the terms of the contract. 

Q: ​What issues will be presented to the arbitrators if the T/A is rejected?

A: If the T/A is rejected, only the economic issues in the contract will go to arbitration.

​The Negotiations Protocol Agreement, which was signed by APFA, AFA, and the company and guides the bargaining process, states that “any outstanding dispute” shall be submitted to arbitration. Prior to the last week of negotiations, the company and the JNC had reached tentative agreements on virtually every section of the contract except for the key economic provisions. These include: wages, premium pay, sick accrual, vacation accrual, medical plan, and the 401(k) plan. During the last week of negotiations, the JNC and the company exchanged comprehensive proposals on those subjects. If the company and the JNC had not reached a tentative agreement on those subjects, the T/As previously reached on the non-economic issues would have remained and those six economic subjects would have been the “outstanding disputes” that would have been arbitrated.

However, on September 19, the JNC agreed to the company’s final comprehensive proposal, resulting in the T/A that is being submitted to a vote of the membership. If the T/A is rejected, the parties will be treated as if no T/A was reached in the final week of negotiations. The parties would, in effect, return to the position they would have been in had no TA been reached on the comprehensive economic proposals. In other words, if the T/A is rejected, all of the T/As reached before that final week would be considered settled and only the economic issues would comprise the outstanding disputes subject to arbitration.

Q: What standard would the arbitrators use in deciding the terms of our new contract?

A: The arbitrators have a floor and a ceiling in terms of the value of the Joint Collective Bargaining Agreement they impose. The ceiling is “market-based in the aggregate” and the floor is “at least equal to the current LUS and LAA contracts.” The focus of the arbitration would be how much the current agreements have to be increased to meet these standards. Each side would identify the amount that it believed fit within those parameters and would present a contract containing the terms on the six key economic items.

The JNC expects that an arbitrated JCBA would be worth no more than $111 million. As a reminder, the T/A is worth approximately $193 million.
    
Q:  Why did we agree to move the LUS Flight Attendants from their medical plans to the LAA medical plans?

A:  The effort to keep the LUS medical plans was one of the fiercest fights the JNC put up during negotiations. Unfortunately, it was a non-starter for the company and, in our calculations, we had virtually no chance of keeping the LUS plans in binding arbitration. 

In light of our prospects in arbitration, we agreed to a T/A that increases the value of our contracts by $193 million and is $82 million above the market rate, which serves as the ceiling in arbitration. With this amount of money, we were able to significantly soften the impact of this transition to the LAA medical plans. Under the T/A:

• The LUS Flight Attendants will remain under the LUS medical plans through 2015. 
• The LUS Flight Attendants will receive a $3,000 stipend shortly after the contract takes effect, in part to help defray the costs of the new medical plans.
• In 2016, the first year when LUS Flight Attendants will be covered by the LAA plans, the top of scale wage rate will be $54.09, 14.6% higher than current LUS TOS pay. 

FACT: The next FACT Rep/Mobilizer Telephone Town Hall meeting with APFA President Laura Glading and members of the Joint Negotiating Committee (JNC) is set for October 2, 2014, at 1200 EST / 1100 CST / 0900 PST.

A presentation about the Tentative Agreement from Laura Glading and members of the JNC will be followed by a question and answer session. If you or anyone you know is interested in becoming a FACT Rep, please click on this link and follow the directions to join. FACT Reps signed up by 0900 EST on Thursday, October 2nd will be able to participate in this important Telephone Town Hall.

FACT: The T/A being sent to the membership for ratification is worth an average of $193 million annually above the value of the LAA and LUS contracts combined, just over $900 million over the life of the contract.  If the T/A is not ratified, in the binding arbitration that will follow, under the Negotiations Protocol Agreement, the most the arbitrators will be authorized to award is a contract valued at $111 million annually (market rate) – and we would lose about $82 million dollars in each year of the contract.

FACT:  Under arbitration, only the economic items of wages, premium pay, sick accrual, vacation accrual, medical plan, and the 401(k) plan would be considered.  Those items have strict parameters surrounding them and the premium value we negotiated above industry standard will be adjusted down as much as $82 million by the arbitrator in compliance with the Negotiation Protocol Agreement agreed to by APFA, AFA and AA. 

FACT:  Ratification ballot packets will be mailed to your address on file with APFA on October 10th. Voting will last 30 days and close Sunday, November 9th. All Flight Attendants, including Flight Attendants on probation, are eligible to vote.  If you need to update your address, please email the APFA Membership Department. If you are not an APFA member, in order to be eligible to vote you must become a member no later than the 5th day prior to the end of the balloting period – by close of business on November 4th. We encourage you to sign up to become a member now by clicking here. Also, if you are a member in bad standing (more than 60 days in dues arrears), to be eligible to vote you must arrange to be in good standing by that same date – close of business November 4th. To do that, email the APFA Dues Department.

FACT: The T/A Call Center opened Wednesday, October 1, 2014. Hours of operation will be from 9:00 a.m. to 5:00 p.m. Central Time on weekdays. The call-in number is (682) 292- 0244.  

FACT: T/A Roadshows are scheduled to begin October 6th in JFK.  For a complete schedule of T/A roadshows please click here.

If you are interested or know someone who is interested in becoming a FACT Rep please sign up by clicking on this link and following the directions for sign-up. 

As a member of FACT we ask that you please share this information with your co-workers in person, via email, and posted to social media to ensure everyone is getting the FACTs. If you have any questions please email me at [email protected].

AmericanAirlines + US Airways 
“On Our Way”

Kelli Harrington, LAX-I
FACT Rep Coordinator