A federal appeals court on Friday upheld Eastern Airlines’ layoff of more than 4,000 employees when the financially troubled carrier eliminated service to 14 cities to stem continuing losses.
A three-judge panel of the U.S. Circuit Court of Appeals said there was insufficient evidence to support contentions of three unions that the layoffs were part of an illegal campaign to weaken the power of organized labor at Eastern.
The unions “have directed our attention to nothing that would undermine Eastern’s claim that legitimate business concerns provide an ample reason for these reductions,” the court said in an opinion written by Judge Stephen Williams and joined by Judges David Sentelle and James L. Buckley.
The panel noted that “there is no claim that Eastern has tailored its reductions so as to impose a differential impact on union members. Indeed, it appears that the furloughs affect union members and non-members in roughly their proportions of Eastern’s work force.”
The court also ruled that the layoffs of baggage handlers and flight attendants were not an illegal change in working conditions under the Railway Labor Act, which governs labor negotiations in the airline and railroad industries.
The panel’s ruling dissolves an injunction blocking the firings that was issued last month by U.S. District Judge Barrington D. Parker. Parker had found that the furloughs violated federal labor law provisions against making major changes in union working conditions without bargaining.
But the appeals court had quickly dissolved the preliminary injunction, saying Eastern could proceed to layoff affected employees if it posted a $4.7-million bond while the case was appealed.
The International Assn. of Machinists & Aerospace Workers, the Transport Workers Union of America and the Air Line Pilots Assn. contended that the furloughs were merely part of an anti-union campaign being waged by Eastern’s parent, Texas Air Corp.
In a statement from its Miami headquarters, the airline hailed the decision as “a very significant, positive development for Eastern Airlines,”
“Eastern believes the decision is extremely important because the court has reaffirmed management’s right to operate its business in the best interests of the company, its employees, shareholders and the public,” the company said.
The pilots union joined the legal challenge even though pilots were not being laid off as a result of the schedule changes. The airline said attrition would account for a reduction in pilot jobs.
Union spokesmen expressed disappointment with the verdict and said no decision had been made on how to proceed.
Eastern, which has lost $1 billion since 1980, announced the layoffs in July as part of a plan to eliminate unprofitable routes to 14 cities and close its Kansas City, Mo., hub.
Citing losses of $120 million in the first six months of this year, the company said it was restructuring its operation to concentrate service along more profitable East Coast routes. Profitable service to Latin American points would also be maintained.
The unions argued that the layoffs were part of a plan by Texas Air, which acquired the carrier in 1986, to transfer work to its non-union subsidiary, Continental Airlines, and sell off profitable Eastern assets.
Eastern said it would save between $99 million and $199 million in annual operating losses if it cut the unprofitable service, plus daily payroll savings of $160,000 from the layoffs.