Unions Lose Initial Ruling in Continental Air Case
A federal bankruptcy judge has disallowed almost $650 million in union claims against Continental Airlines, the airline announced Wednesday.
U.S. Bankruptcy Judge T. Glover Roberts issued the ruling Tuesday as the first in a series of rulings on union claims. Roberts disallowed about $500 million in claims by the Air Line Pilots Assn. and the Union of Flight Attendants for damages on behalf of striking employes.
The court also disallowed a separate claim by the pilots union for about $144 million in damages under labor protection provisions imposed by the Civil Aeronautics Board at the time of the Continental-Texas International merger in 1982.
“Under well-established principles of federal labor law, striking employees are not entitled to back pay for the period of time they were on strike,” Roberts said in his decision.
Pilots spokesman Jerry Baldwin and Linda Downing, spokeswoman for the flight attendants’ union, declined to comment on the judge’s decision.
Barry P. Simon, Continental vice president and general counsel, applauded the decision.
“As we have repeatedly said, we believe that the unions’ claims lack any support in law, logic or fact and will be denied in court,” Simon said.
Simon said that the judge also had adopted an expedited schedule for submission of briefs on the remaining claims and that, as a result, “we are confident that Continental’s reorganization plan will go forward quickly.”
Continental already has filed a brief contesting a claim for wrongful discharge for about $1.5 billion. Another pending motion relates to the International Assn. of Machinists, which seeks $600 million in contract rejection damages.
Two years ago, Continental, on the brink of collapse, shut down, filed for bankruptcy protection, dismissed thousands of employees, voided union contracts and resumed flights three days later as a low-cost, non-union airline.
While still under bankruptcy court supervision, it has recovered dramatically and has been reporting record profits.
