Judge Blocks Eastern Plan to Lay Off 4,000 Workers

A federal judge on Friday blocked Eastern Airlines from laying off 4,000 workers next month to cut costs, dealing the financially ailing airline giant its third setback in recent months.

U.S. District Judge Barrington D. Parker decided in favor of three Eastern unions that had filed suit to prevent the layoffs. The unions have long argued that company officials are trying to skirt federal labor laws by stripping Eastern’s assets and diverting them to its sister fleet at Continental, a non-union carrier.

Parker issued a preliminary injunction, continuing the temporary restraining order he issued Aug. 4. He said he would issue a detailed opinion Tuesday.

Eastern and Continental are the flagship airlines of Texas Air, the nation’s largest airline conglomerate, built by aviation tycoon Frank Lorenzo.

The injunction marks the latest in a series of blows to beleaguered Eastern. This spring it was hit by an unprecedented safety inspection and then was forced, after court challenges, to cancel plans to sell off its profitable air shuttle business connecting Washington, New York and Boston.

But Parker’s ruling leaves unanswered the unions’ challenge to Eastern’s plans to drastically curtail its scheduling by discontinuing service to 14 cities, including San Diego, Las Vegas and Lake Tahoe. The judge indicated that he will address that question and will define the limits of the layoff ban in his opinion next week.

In the meantime, Eastern’s attorneys said the company is moving ahead with its reduced schedule, which cuts flights to major hubs such as Kansas City, Mo., and returns the airline’s focus to East Coast and South American routes.

Decision on Service Awaited

But Jonathan Cohen, an attorney for the Air Line Pilots Assn., one of the unions that has challenged the cutbacks, warned that “Eastern is going to have to be very cautious about what it does” in implementing the new schedule. Given Parker’s other rulings in the case, Cohen said, the judge could ban such service cutbacks in his decision next week.

At a hearing in district court, Eastern attorney John Gallagher pressed Parker to lay out more precisely his ruling that the three unions were “entitled to relief.” A clearly irritated Parker said only: “I don’t know myself (how he will rule next week). I have some ideas.”

In issuing the temporary restraining order earlier this month, the judge said the unions had “made a strong showing that Eastern possesses a union animus” and criticized the airline for trying to circumvent normal labor negotiations by apparently seeking to shift its resources to Continental.

Texas Air officials have repeatedly denied that they are trying to weaken unionized Eastern to bolster non-union Continental. They say that Eastern’s grim economic picture, blamed in part on its unions’ unwillingness to accept wage concessions, has left them no choice but to make deep cutbacks.

Unions Claim Victory

Eastern, a once-thriving airline, has reportedly lost $1 billion in the last decade, $182 million last year alone. Eastern officials say they could save $7 million a month by laying off the 4,000 workers as planned--about 12% of Eastern’s total work force--and an additional $50 million a month by cutting flights.

The unions claimed victory. “I see this as a victory for the 40,000 Eastern employees. For once, justice is working for the little people and not just for big business,” said Capt. John J. Bavis, head of the pilots association.

But Eastern attorneys quickly promised to challenge the injunction. “Obviously, we dislike the results, and we’ll appeal those in due course,” Gallagher said.

Charles Bryan, machinists local president, said Eastern’s unions remained interested in buying the airline. Texas Air has consistently stated that Eastern is not for sale.

Bryan said the ruling would not affect the machinists’ plan to put Eastern’s latest contract offer to a vote of it members. Bryan said the vote would probably be held Sept. 15, and union leaders have urged a rejection of the wage-cutting proposal.

Rising Animosity

This spring, Eastern--and later sister fleet Continental--were the targets of an unprecedented plane-by-plane inspection by the federal government into allegations of safety hazards. The probe found no unusual safety problems at either airline.

But Eastern officials conceded that the negative publicity hurt sales, and federal officials found an alarming level of union-management animosity that prompted them to appoint a special mediator.

In July, Texas Air retreated from plans to sell Eastern’s lucrative Washington-New York-Boston shuttle to a new subsidiary, following court challenges from Eastern’s unions.