TRANSPORTATION Court rules for Pan Am
The court lifted an injunction that had prohibited Pan Am from transferring flights.
VIENNA -- A federal appeals court looked at the arrangement for Boston-Maine Airways to fly Boeing 727s for Pan Am Clipper Connection and saw no subterfuge among the companies involved to break the pilots union.
The Air Line Pilots Association raised that labor issue with Boston-Maine, which is bringing Pan Am Clipper Connection to the Youngstown-Warren Regional Airport.
The 1st Circuit U.S. Court of Appeals in Boston, however, has issued an opinion that does not support the union's position against the airline.
Local officials have focused on the success of a Mahoning and Shenango Valley contingent of government, business and private leaders that worked for a half-year to bring scheduled flights back to the airport. Pan Am Clipper Connection's decision to start flights in September was hailed last week as good economic news for an airport that needs people passing through its gates.
"Each principal within our organization is very sympathetic to our unions in the Mahoning Valley," said Steve Bowser, the airport's director of aviation.
In recent months the pilots association has been in court with Pan Am, Boston-Maine and Guilford Transportation Industries Inc. over alleged union-breaking attempts.
A U.S. District Court magistrate in New Hampshire last year had found that Guilford Transportation had illegally moved business from unionized Pan Am to nonunion carrier Boston-Maine. The pilots association had described this move as "a brazen and apparently successful effort to destroy a union."
The 1st District Appeals Court, however, disagreed in February and lifted an injunction that had prohibited Pan Am from transferring flights.
Guilford Transportation in 1999 had formed Pan Am as a wholly owned subsidiary.
Pan Am last June told federal regulators that it would cease flight operations in October 2004 because of financial difficulties; those pilots were represented by ALPA. After Pan-Am began transferring the 727 jetliner flights to Boston-Maine, the union sought the injunction.
"From the beginning, Pan Am's airplanes were flown by the pilot force of its bankrupt predecessor. ... At its high point Pan Am employed approximately 90 pilots. The skies were not friendly, however, and by August of 2004 that number had shrunk to 30," the court said.
"Finances explain this reduction in force. The record shows that Pan Am lost tens of millions of dollars over approximately five years."
Boston-Maine Airways employs only nonunion pilots and in 2002 won federal regulators' approval to fly Boeing 727 aircraft, despite ALPA's opposition. By 2004 Pan Am contracted with Boston-Maine to fly certain Pan Am routes, which triggered the court action.
Staying in business
The question before the court was whether a nonunion corporate affiliate may, when a unionized carrier closes its doors, assume portions of the latter's business portfolio without either triggering a major dispute or violating the Railway Labor Act. The court, citing a Supreme Court opinion, said the continued existence of the company -- and by extension its union members' jobs -- is not guaranteed by the RLA.
"Because employees have no right to force a company to remain in business, they lose nothing when, after the company fails, an affiliated company absorbs some [or perhaps all] of the closed company's business operations," it said.
The court also said it saw no subterfuge or shell-game among the companies to bust the union.
It was Guilford Transportation's interpretation that the bargaining agreement between ALPA and Pan Am allowed the contracting out of some of Pan Am's scheduled flights.
This minor dispute, the court said, should be worked out through arbitration. The matter was remanded to a lower U.S. District Court of New Hampshire for further proceedings.
"Though it seems a long shot, we think that the union should be entitled to attempt to demonstrate, on remand, that Pan Am was shut down only because it was possible to transfer its union-flown routes to a non-union affiliate -- and if so, that a major dispute was thereby created," the court's opinion states.
It adds: "Stripped of rhetorical flourishes, the union's only substantial allegation in this case is that the defendants violated the collective bargaining agreement by transferring [or plotting to transfer] covered work to an affiliated corporation. There is nothing to suggest that the defendants have somehow tried to prevent the pilots from organizing or that they have erected obstacles to the pilots' ability to act collectively."