A Healthier Northwest Brings Union Back to Court

April 9, 2007
Gropper could rule as early as next week on two key issues that the Association of Flight Attendants has brought before him.

Apr. 7 -- Absent a dramatic development in the next few weeks, Northwest Airlines flight attendants likely will still be without a contract in June, when the carrier is set to leave bankruptcy.

U.S. Bankruptcy Judge Allan Gropper has used his power during the 19-month trip through bankruptcy court to create a climate that allowed Northwest and its unions to forge concessionary deals.

But the flight attendants are the last holdouts.

Gropper could rule as early as next week on two key issues that the Association of Flight Attendants (AFA) has brought before him.

Citing Northwest's better-than-expected financial results, the attendants have asked Gropper to reverse an order that allowed the airline to toss out their contract. He also granted the Eagan-based carrier permission last year to impose changes in pay rates, benefits and work rules on the attendants that are saving the company $195 million a year.

In response to Northwest putting those work terms into place, the attendants union has filed for a bankruptcy claim worth $1.1 billion.

If Gropper grants the flight attendants' request, the union asked in a court filing late Thursday for him to defer the effect of his order for two weeks "to provide the parties an opportunity to reach a consensual resolution."

In June, when Gropper approved Northwest's request to abrogate the attendants' contract, he gave them time to complete a representational election and allowed the new AFA union leaders to negotiate a tentative agreement.

But that labor deal was voted down in July, and the airline and the flight attendants have been unable to reach agreement on a third deal that could be submitted to the rank and file.

Now, it is late in the bankruptcy process.

"These arguments have been percolating and addressed and appealed over the course of many, many months," said George Singer, a bankruptcy attorney for Lindquist & Vennum in Minneapolis, who has closely followed the case.

"It is my belief that Gropper will unravel the logjam in short order."

A three-member panel of the Second U.S. Circuit Court of Appeals last week upheld a district judge's ruling that has prevented the flight attendants from striking. This week, the attendants union said that it will ask that a majority of the appeals court judges rehear its case.

In its Thursday filing with Gropper, Northwest argued that the flight attendants' "redress is in the bargaining room," not in the courts. The carrier said attendants are attempting to "re-litigate" the case about the need for Northwest to get $1.4 billion in overall annual labor savings, including $195 million from the attendants.

But the union said it is time to "recalibrate the concessions" for the flight attendants and other unions, given the airline's improved financial situation. The flight attendants maintain that their concessionary sacrifice should be 20 percent less -- $156 million a year rather than $195 million.

Gropper has shown "great patience" in dealing with the attendants' conflict in the case, Singer said.

The judge also has kept parties guessing about how he might rule. A year ago he allowed negotiations between the pilots and the airline to go into overtime, and that pressure situation helped clinch a deal.

But now the next move in this bankruptcy chess game is in Gropper's court. His next ruling could push the two sides back to the negotiating table or it could continue the stalemate.

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