Eastern Pilots Union Wins Plea in Court Over ‘Merger’

A federal judge ruled Tuesday that Eastern Airlines’ pilots union can seek arbitration over the union’s contention that Eastern has been merged with its sister carrier, Continental Airlines.

U.S. District Judge Robert W. Sweet also decided that the pilots union may proceed with a lawsuit against Eastern over its practice of leasing aircraft and crews from Continental.

The rulings reversed earlier decisions by U.S. Bankruptcy Judge Burton R. Lifland, who had ruled that in both cases the bankruptcy court was sole forum for deciding those issues.

In his 71-page opinion, Sweet wrote that the important question was “when and in what forum collectively bargained-for rights may be enforced against an employer who has sought protection from creditors in bankruptcy.”

If a court concludes that Eastern and Continental have effectively been merged, it would trigger certain protective labor provisions, such as seniority rights, contained in the pilots union’s contract with Eastern.

Separately, the committee representing Eastern’s unsecured creditors filed a request with the bankruptcy court for appointment of a special trustee to find a buyer for Eastern.

The creditors’ committee, exasperated by Eastern’s growing losses and its plans to cut debt payments, voted last week to reject the airline’s latest reorganization proposal and seek the appointment of a trustee.

Eastern’s pilots, machinists and flight attendants struck the Miami-based airline on March 4, 1989, forcing it into Chapter 11 bankruptcy protection five days later.

The machinists union remains on strike against Eastern.

Lifland had denied the pilots union’s request to lift an automatic stay protecting Eastern against arbitration of the union’s contention that the transfer of various Eastern assets to Texas Air and Continental constituted a merger between Eastern and its sister carrier.