Judge Delays Ruling on United Contract
United Airlines dodged the immediate threat of a strike Friday when a bankruptcy judge put off until May 31 a ruling on the carrier’s bid to force a new contract on its machinists union, giving the two sides more time to negotiate an agreement.
Judge Eugene Wedoff’s decision came with United still deadlocked with the International Assn. of Machinists and Aerospace Workers over a proposed five-year contract despite three days of intensive bargaining.
Negotiators met through the night at a hotel outside Chicago in an unsuccessful effort to reach a deal before Friday’s conclusion of a one-week trial on the contract issue, then waited tensely for a ruling that could have triggered a strike by day’s end.
The union said its nearly 20,000 baggage handlers, public-contact employees and other ground workers were poised to shut down the airline if the judge ruled the contract could be broken. The strike threat is off for now but remains in effect if a May 31 ruling goes in United’s favor, union official Randy Canale said.
“If our contracts were abandoned, we would have no recourse but to walk,” said Canale, president of IAM District 141.
Both sides said they were pleased with the deferment of an unavoidably controversial ruling in the case.
“All we ever wanted to do was reach a consensual agreement with all of our unions, and this gives us a chance to do it,” United Chief Financial Officer Jake Brace said.
Talks are not expected to resume until next week. United and the union said their negotiators needed to catch up on sleep, and some booked flights out of Chicago on Friday afternoon.
United, a unit of Elk Grove Village, Ill.-based UAL Corp., wants annual concessions averaging $176 million over five years from machinists to reach its objective of $700 million in labor cost reductions. Other United employee groups already have long-term contracts in place, and the airline’s mechanics are voting electronically until May 31 on whether to ratify a tentative deal agreed to by their negotiators Monday.
In closing arguments Friday, United reiterated that it needed the hefty givebacks by machinists to help it emerge from Chapter 11 bankruptcy. “The savings are required, and they are fairly and equitably shared by all employees,” attorney Alexander Dimitrief said.
The union countered that United had negotiated in bad faith and was asking its members to shoulder a disproportionately large 25% share of the cuts. “We’re ... being asked to take too much,” attorney Sharon Levine argued.
Wedoff said when closing arguments finished that an immediate decision would be “counterproductive to ongoing negotiations.”
“The best outcome, as recognized by both sides, remains a consensual agreement,” he said.
Overcoming differences on the emotional issue of pensions remains the biggest hurdle to achieving a deal. Besides wages and benefits, the two sides are negotiating over a defined-contribution pension plan to replace the defined-benefits plan United is terminating in its companywide push to cut labor costs.
Hoping to retain the threat of a walkout as bargaining leverage, the union was seeking a temporary restraining order in U.S. District Court to prevent United from blocking any strike. United says any strike would be illegal.
