Machinists Challenge US Airways' Bankruptcy Shield

WASHINGTON, Feb. 26 /PRNewswire-USNewswire/ -- The International Association of Machinists and Aerospace Workers (IAM) today filed a federal lawsuit challenging US Airways' use of bankruptcy court to avoid an arbitration case stemming from a Machinists...


WASHINGTON, Feb. 26 /PRNewswire-USNewswire/ -- The International Association of Machinists and Aerospace Workers (IAM) today filed a federal lawsuit challenging US Airways' use of bankruptcy court to avoid an arbitration case stemming from a Machinists Union grievance. US Airways last week filed a complaint in bankruptcy court asking a bankruptcy judge to block a grievance arbitration scheduled to begin today, prompting the IAM's suit.

"US Airways is attempting to use the bankruptcy court to shield itself from its contractual obligations 17 months after exiting bankruptcy," said IAM General Vice President Robert Roach, Jr. "If companies can get bankruptcy court protection without filing for bankruptcy, no business contract, labor or otherwise, is enforceable. Lessors, vendors, bondholders, stockholders and other creditors are also at risk."

All IAM-US Airways collective bargaining agreements provide for automatic wage adjustments upon a change in control of the airline. IAM Districts 141 and 142 each filed grievances to enforce the change of control provisions in October 2005, following the US Airways-America West merger.

"US Airways is obligated to resolve collective bargaining disputes through the process set forth in our contracts and the Railway Labor Act," said Roach. "Companies can not hide in bankruptcy court forever."

The arbitrator postponed the scheduled arbitration hearing as a result of US Airways' refusal to attend. The IAM's complaint, filed in Federal District Court for the Eastern District of Virginia, asks the court to order the arbitration to go forward. The suit is available at http://www.goiam.org/transportation.

The IAM represents 15,000 US Airways Fleet Service, Mechanic & Related and Maintenance Training Specialists employees. The Machinists Union is the largest airline union in North America, representing more than 100,000 airline employees in almost every classification, including Flight Attendant, Mechanic & Related, Fleet Service, Customer Service and Reservation Agents. More information about the Machinists Union is available at http://www.goiam.org.

SOURCE International Association of Machinists and Aerospace Workers

CONTACT: Joseph Tiberi, IAMAW, office: +1-202-974-8250, cell: +1-301-529-9341, jtiberi@iamaw.org

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