District Judge Marrero handed down his decision in the NWA appeal today.  He reversed the bankruptcy court and enjoined the union from implementing CHAOS (which, by the way, I was wrong to suggest would not involve mass walkouts).  "Court Tramples Right to Strike" is how the flight attendants cast it –see the flight attendants webpage.

Let me say this: at over 100 pages, it is an extremely thoughtful analysis that really tries hard to cut through the seemingly conflicting goals of federal labor and bankruptcy policy here.  In essence, the judge said that Congress really wanted national railway carriers (and their modern-day airline analogues) to negotiate and negotiate and negotiate under the cumbersome and intentionally drawn-out provisions of Section 6 the Railway Labor Act for as long as possible, before giving up.  Only at that "Despondence Day" [my term, not a legal one] — when the Section 6 negotiating process has run its couse — can the parties resort to self-help (i.e., labor can strike).

In bankruptcy, a debtor can change the rules somewhat: if it wins an 1113 motion, the debtor can change the terms of a labor CBA — even if it never negotiated up to Despondence Day under Section 6 of the RLA.  So the question is: if Congress had ever thought about the issue directly — which it never did, so a judge has to predict Congress’s intent — would it have analogized the granting of an 1113 motion as an "acceleration" to Despondence Day (in which case the labor State of Nature obtains and self-help is a go), or would it have seen an 1113 order as merely an "alteration" of the Section 6 negotiating environment: allowing the debtor to reject the CBA and alter some rules, but not excusing either party from finsishing the Section 6 dance before self-help?

Given the desire to avoid strikes that was a "primary objective" of the RLA, Judge Marrero held that Congress would have probably wanted the latter: the parties have to keep slogging through Section 6 before self-help, even though the CBA has been rejected under section 1113 of the Bankruptcy Code.

But wait a minute!, cried the flight attendants, Northwest gets the best of both worlds: It gets self-help right away (after all, self-help for management *is* the unilateral imposition of labor terms), but the union’s hands are tied (no strike) until the end of Section 6.  How is that fair?

It is fair, answered the judge.  Yes, management can impose unilateral terms, but not *any* unilateral terms; they are bound only to implement the terms of their last proposal in the 1113 process.  And by the way, recall that the only reason NWA won the 1113 motion is because the bankruptcy judge had to find that the union rejected that proposal without good cause.  So what at first blush may appear like unfairness is not nearly so one-sided as the flight attendants tried to paint.  That’s what I think Judge Marrero is trying to say in his book-length opinion and why the bankruptcy judge was reversed.

This isn’t over yet: (1) on the litigation front, the union may appeal to the Second Circuit; and (2) on the negotiating front, they’ve got to continue with the Section 6 process with NWA.  Who knows, that still may end up going all the way to Despondence Day without an agreement.  And then, let slip the dogs of war!  But it may not.  Just maybe, if the Congress that designed the RLA correctly predicted that as tempers subside over time, voluntary agreements can work out, then NWA and the flight attendants will hunker down, hash something out, and put all this customer-irritating unrest behind them.  That’s what I’m hoping for.

As resident blogger from Michigan, I feel compelled to alert readers to the interesting labor developments at Northwest Airlines.  (Northwest "hubs" in Detroit and employs a good swath of people in this area.)

A very complex issue of federal jurisdiction is unfolding regarding the intersection of federal bankruptcy law, federal labor law, federal court injunctive jurisdiction (the Norris-LaGuardia Act), and the specific provisions of the Railway Labor Act.  As the various airlines have gone through this round of bankruptcies, they have avoided this issue by settling with their respective unions by extracting voluntary concessions — so it has never been litigated.  Not so with the flight attendants at Northwest.  They are pushing this issue to an explosive head (unperturbed by Northwest’s effective ignoring of the earlier mechanics’ strike).

The legal issue at dispute pertains to the ability of the attendants to strike.  As bankruptcy types know, federal bankruptcy law allows the judge to order the "rejection" of a collective bargaining agreement with a labor union upon request by the debtor, provided the debtor clears a hurdle showing need (a hurdle that is much more onerous than the general one required to reject a regular business contract).  NWA did indeed request to reject the flight attendant contract, made its showing, and was thus recently granted permission by the court.  With no CBA in place, NWA was unfettered by contract and could implement its own labor rules.  And it did.

The thorny battle arises over what happens next: the union takes the position it can now initiate a strike, making the fairness argument that if management can impose unilateral work rules, workers should be able to respond with the "ultimate sanction" in labor disputes.  Management contends that this is not so, for reasons that are difficult to get down in bloggable format.  (If you really want to know, the argument depends in part upon the fact that to order rejection of a CBA, the bankruptcy judge must find that the union did not have good cause to reject the last offer in negotiations — which he necessarily did because he granted the motion — as well as the general duty to bargain in good faith in negotiating an initial CBA.)

Management and the union went to court to thrash it out.  They argued passionately.  And a decision came down.  The Bankruptcy Court judge said the union could strike (more precisely, there was no jurisdiction to enjoin the flight attendants from striking).

Victory for those who control the means of production?  Not quite — the ruling was immediately appealed.  In bankruptcy, an appeal goes to the federal district court in the relevant district (here, the Southern District of New York, i.e., Manhattan).  The District Court judge responded to the appeal by entering a temporary, limited injunction blocking the union from striking for the time being — until he has a chance to rule on the merits of the appeal.  Clinging desperately to the hope of a consensual resolution [that is my read], he asked the parties to tell him what the prospects for future discussions looked like.  NWA said they were still willing to talk; the flight attendants said they couldn’t see the point in more discussion.

The District Court judge’s ruling in the appeal is expected shortly — although my prediction is the loser will probably turn around and appeal up the legal ladder to the presiding appellate court: the U.S. Court of Appeals for the Second Circuit (which sits in Manhattan and hears appeals from trial courts in New York, Vermont, and Connecticut).

In the meantime, the flight attendants talk about a semi-strike, "CHAOS," which will entail random sickouts and slowdowns, but not an outright walkout.  For its part, NWA has recalled all furloughed flight attendants, which in better labor-relations times might have been good news; here it may be nothing more than a preemptive strategy to fend off possible strike-induced shortages.  I am waiting to see what happens, especially since it is not beyond comprehension that one of the bankrupt airlines will not survive chatper 11.  Will NWA’s labor dysfunction, I wonder, prove the key to its undoing?  We will see.

Links: Flight Attendants Webpage.
          NWA Chapter 11 Webpage.
          Detroit Free Press.    (Journalist Jewel Gopwani has excellent, unbiased coverage.)