Unions File Grievances Over American Airlines' Executives' Bonus

According to the unions, the management payouts violate a provision in their 2003 contracts that puts restrictions on any cash bonuses to managers or executives.


American Airlines' unions filed grievances with the airline Tuesday over a slate of management bonuses that have caused an uproar among many employees.

According to the unions, the management payouts violate a provision in their 2003 contracts that puts restrictions on any cash bonuses to managers or executives. By filing grievances over the issue, unions contend that the terms of their contracts have been violated.

Under the grievance process, union leaders and executives will sit down with a mediator and try to resolve the issue. A mediator could force the airline to rescind or revise the bonuses, or could confirm that the payouts are legitimate.

Labor leaders said in a statement that they were "deeply concerned over the irrationality of tying cash bonuses solely to the performance of our stock."

The statement was signed by Ralph Hunter, president of the Allied Pilots Association; Tommie Hutto-Blake, president of the Association of Professional Flight Attendants; and Jim Little, international vice president of the Transport Workers Union.

American spokeswoman Lisa Bailey said that the airline will cooperate. "We'll follow through with that process in accordance with" the contracts, she said.

She added that Gerard Arpey, American's chief executive, is interested in having more discussions with labor leaders about the bonuses. Arpey has met several times with union officials in recent days.

The payouts, which will be awarded in April to about 1,000 managers and executives, are tied to the stock price of AMR Corp., American's parent company. If valued today, the bonuses would be worth more than $70 million.

Arpey did not participate in the plan.

The bonus plan was approved in 2003 by American's board of directors, and company officials have said union leaders were briefed about the program at the time. It has also been outlined in filings with the Securities and Exchange Commission.

But most American employees didn't know about the bonus plan until they got a letter Jan. 5 from Jeff Brundage, the airline's head of human resources, outlining the program. Since then, many have condemned the payouts as inappropriate, given American's continued losses and large pay and benefits cuts absorbed by union workers in 2003.

Fort Worth Star Telegram


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