Bankruptcy Judge Gives Northwest, Pilots More Time to Talk

The fear of the unknown is keeping talks going between Northwest Airlines and its pilots.

The Eagan-based airline could push for the power to impose contract terms on its 5,000 pilots, wrapping up a three-year quest for deep pay and benefit cuts and work rule changes it says it needs to compete in an industry where low-cost carriers dictate prices.

Yet any unilateral move by Northwest would spark a strike by the Air Line Pilots Association, one of the few unions that can shut down a company.

And the next stop after that: another courtroom. That's where Northwest Airlines would pose a compelling question to a judge: Can workers strike if their airline is in bankruptcy?

It's a hotly debated question in legal circles, one lacking a clear answer despite some 300 airline bankruptcies over the past three decades and some close calls.

"There's been a lot of airline bankruptcies for this question not to have been answered," said James Sprayregen, the lead attorney in the recent United Airlines bankruptcy. "My own belief is labor would prefer this question never be answered."

Airlines, others argue, also would have much at stake should a court throw its legal weight behind the right to strike.

Despite its name, the federal Railway Labor Act also governs labor relations for the airline industry. In the interest of minimizing snarls in the nation's transportation system, the law is designed to eliminate some of the uncertainty that comes with negotiating a labor contract.

It leaves in place existing contract terms while talks proceed on new agreements, spells out a detailed process for declaring talks stalled and requires a 30-day wait before a union can strike or a company can lock out its workers.

But how all that works in a bankruptcy is untested. "You have a clash of laws which have different objectives," said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass.

Bankruptcy laws protect a troubled company, giving it unusual latitude to fix fractured finances. The Railway Labor Act, while laying down strict conditions, clearly embraces a union's right to walk off the job.

Northwest Airlines has said it would challenge any strike by its unions. The airline has argued in court documents that "a union should not be permitted to thwart the bankruptcy reorganization process by irresponsibly threatening an unlawful job action."

The pilots, on the other hand, have argued they could walk without the usual 30-day cooling off period that typically precedes a strike in the airline industry. Northwest, they say, cannot impose new terms and conditions and then deny them the right to withhold their labor.

In other bankruptcy battles, labor unions have voted to strike but none has actually carried out the threat. During the three-year United Airlines bankruptcy, the flight attendants and ground-workers unions authorized strikes but neither group walked out.

And during US Airways' recent bankruptcy, the judge last year threw out the contract for the union representing mechanics, airplane cleaners and baggage handlers . But the company allowed its last offer to go to a vote of union members, who ratified it. The airline emerged from bankruptcy last September.

"The normal course is that they never get to the ultimate end where the judge has to make a decision," said Anthony Sabino, a bankruptcy law expert at St. John's University in New York. "The parties usually resolve it on their own in the 11th hour and 59th minute."

At Northwest, it's the powerful airline pilots union that finds itself in the judge's crosshairs. Normally, it takes a U.S. president to thwart a strike by pilots. President Bill Clinton did it with American Airlines in 1997. The following year, a pilots walkout grounded Northwest for two weeks.

Publicly, leaders of Northwest's pilots union say they're ready to do it again despite claims that walking could put the airline out of business.

Yet, as of Thursday night, the two sides had blown through multiple court-imposed deadlines and continued to hammer away at a deal.

That, experts say, is the power of the unknown.

"The devil you know is better than the devil you don't," said John O'B. Clarke, a Washington, D.C., attorney who represents railroad and airline labor groups.

Julie Forster can be reached at [email protected] or 651-228-5189. Online: For the latest on NWA's labor talks, go to www.twincities.com.

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