Reproduced with permission from Daily Labor Report, 18 DLR S-29 (Jan. 28, 2013). Copyright 2012 by The Bureau of National Affairs, Inc. (800-372-1033) <http://www.bna.com>
By Larry Swisher
The National Mediation Board in the coming year likely will see an easier caseload after an especially busy period in the airline and railroad industries in recent years, according to practitioners recently interviewed by BNA.
On the other hand, there is the potential for a major labor dispute to develop in contract negotiations at commuter and passenger railroads, and a merger is being discussed by American Airlines, which is undergoing Chapter 11 restructuring, with US Airways, which could trigger additional representation battles among unions.
"You're in a relative period of quiet in both industries right now, I think it would be fair to say," said Thomas E. Reinert Jr., an attorney with Morgan, Lewis & Bockius in Washington, D.C., who represents airlines and railroads.
The major national freight railroads and their unions in late 2011 put multiyear collective bargaining agreements in place, while most major airlines and their unions either have agreements in place or are making progress toward them, Reinert told BNA Jan. 22. "It doesn't look like a period of big labor crisis in either industry," he said.
"A number of matters have wrapped up," said Carmen R. Parcelli, a labor attorney and partner with Guerrieri, Clayman, Bartos & Parcelli in Washington, D.C.
"It seems like there will be a quiet stretch for a while," Parcelli told BNA Jan. 23. "The past couple of years have just been absurd."
On the regulatory side, the board in late 2012 adopted a final rule implementing several amendments to the Railway Labor Act enacted by Congress earlier last year, including an increase in the minimum showing of interest that a union is required to demonstrate in seeking a representation election among a craft or class of workers.
Next, NMB has said, it plans to revise its representation manual-a set of guidelines, policies, and procedures that the board and its staff follow in handling representation disputes-to conform to the new regulations.
NMB administers the 1934 Railway Labor Act, which was extended to airlines in 1936 and governs labor relations in the aviation and rail industries, including employee collective bargaining and representation issues.
Airline Consolidation Offers Opportunities
If American Airlines and US Airways merge, however, it eventually would trigger additional activity for the board, which subsequently could be asked by unions to determine whether the carriers have integrated sufficiently to hold representation elections for combined groups of workers, Parcelli said.
The process of integration would take time, so such determinations would not be "on the immediate horizon," Parcelli said.
Meanwhile, American recently negotiated cost-cutting agreements with all its unions through the Chapter 11 bankruptcy process that effectively removed several cases from NMB's docket, said Reinert, who helped negotiate some of the agreements.
On the other hand, negotiations between US Airways and most of its unions have been dragging on for some time, "and would be something I think would be getting the board's attention during 2013," he said.
Parcelli and Reinert said they could not discuss the merger itself or speculate about the likelihood or timing of such a transaction.
"If it were to occur, it would have an impact on NMB's docket," both on the negotiations side, where it likely would decrease bargaining disputes, and on the representation side, where it likely would increase cases, Reinert said.
Some Merger Transition Agreements Already Reached
The leaders of unions representing American's pilots and flight attendants already have reached agreements with US Airways that, contingent on a merger, provide timetables, standards, and procedures for negotiating a joint contract for the combined workforces and integrated seniority lists.
For example, the Allied Pilots Association, which represents American's pilots, has reached a merger transition agreement with American, US Airways, and the US Air Line Pilots Association, which represents US Airways pilots, under which APA would submit an application to NMB within four months, triggering the "single-carrier" determination process that would lead to a representation election among the merged airlines pilots.
"In merger situations, there can be benefits for all stakeholders," Parcelli said. A merger can provide the means and reason to resolve disputes because of the potential for the combined carrier to generate greater returns than the two airlines do operating separately, she said.
More broadly, the merger probably would complete a recent period of airline industry consolidation among network carriers, including most recently, the 2010 merger of United Airlines and Continental Airlines. Since 2005, six national airlines have combined, and the merger of US Airways and American would leave only four major national airlines, including Delta Air Lines and Southwest Airlines.
In addition, Southwest and other low-cost and regional carriers have acquired other airlines.
By completing the consolidation of the major carriers, a merger between American and US Airways "could usher in a period of relative stability and prosperity in the industry that we haven't seen for a while," Parcelli said.
Board to Implement Rule for Merger Cases
On the regulatory side, NMB adopted its final rule effective Dec. 21 to incorporate 2012 amendments to the Railway Labor Act enacted by Congress altering certain representation election procedures for airline and railroad workers.
The board said it would revise its representation manual to reflect the changes but did not give a timetable.
In the past, Parcelli said, NMB sometimes has solicited comment on proposed manual revisions but is not required to do so.
The most significant change from the board's proposed rule, which was issued in May 2012, was to apply the new law's 50 percent showing-of-interest requirement to all cases in which unions seek representation elections, including those arising from the merger of two or more airlines or railroads.
That interpretation of the statute, which did not specifically address merger cases, was supported by the airline and railroad industries and congressional Republicans but was opposed by unions and Democrats in Congress, who argued the representation manual's 35 percent showing-of-interest minimum was more appropriate to merger cases.
"We were quite disappointed with the board's decision," Carla Siegel, deputy general counsel of the International Association of Machinists, told BNA Jan. 23. Applying the higher showing of interest requirement in merger cases, where one or both groups of workers often are already represented by unions, likely will undermine the Railway Labor Act's goals of promoting stability in labor relations and employee choice and prolong the process of determining representation, Siegel argued.
Merger cases are "a very different situation" than cases in which workers currently are unrepresented, for which the law clearly raised the board's previous showing-of-interest requirement from 35 percent to 50 percent, Siegel said.
Requiring, in some merger cases, two competing unions to gain authorization cards from at least half the combined workforce in order to be on the ballot will increase, rather than minimize, confrontations and disputes, she predicted. An employee can sign authorization cards for more than one union, she said.
In cases where a larger carrier whose workers are unrepresented merges with a smaller, unionized carrier, the smaller carrier's workers could "be effectively disenfranchised" and lose their representation without even having a chance to vote, Siegel added.
Litigation Involving NMB Quiet
The U.S. Court of Appeals for the Fifth Circuit in October 2012 upheld the board's decision not to apply the new higher showing-of-interest requirement to a representation election sought by the Communications Workers of America among unrepresented passenger service agents at American Airlines (American Airlines Inc. v. NMB, 479 Fed. App'x 657, 194 LRRM 2303 (5th Cir. 2012)). The decision was challenged by the carrier, which argued the board should have used the new standard set by the 2012 amendments.
NMB applied its previous 35 percent minimum requirement to CWA's showing of interest, saying Congress did not make the amendments retroactive to late 2011, when the union's application was filed.
In the election, which was completed in January, employees voted by 51 percent to 49 percent to reject CWA and remain unrepresented.
The fact that the election has been held and that CWA was rejected makes it more uncertain whether American Airlines will continue its legal challenge against NMB, Reinert said.
The U.S. Supreme Court in November 2012 denied American's request to stay the election pending the company's possible filing of a petition for a writ of certiorari from the high court. American has not indicated whether it will ask the Supreme Court to hear its appeal of the Fifth Circuit decision.
"That lawsuit had a universe of one," Reinert said, noting the election was the only case that raised the retroactivity question.
There appears to be little other major pending litigation concerning railroad and airline labor disputes, NMB practitioners said. "They're aren't a lot of large disputes going on right now," Reinert said.
Potential for Disputes at Amtrak, LIRR
In collective bargaining, there is the potential for a major labor dispute to arise at Amtrak, which is negotiating new contracts with some of its unions, or at the Long Island Railroad, which also is bargaining with several unions, Reinert said.
Such a confrontation would not involve as many workers as the last major dispute, which occurred in 2011 during national bargaining between the major freight railroads and about a dozen unions, he said. That impasse threatened to cause a crippling strike or lockout involving tens of thousands of workers.
The dispute was resolved after President Obama, acting on NMB's finding that it threatened essential transportation services, appointed an emergency board of arbitrators to head off a potential nationwide strike. Based on the presidential emergency board's findings, the carriers and all 13 unions eventually reached six-year agreements.
Even if NMB releases the parties from further negotiations, allowing them to engage in self-help after a 30-day cooling off period, the findings of a presidential emergency board often result in an agreement between the two sides, thereby avoiding a strike or lockout, Reinert said.
Obama Unveils New Nominee
In 2012, President Obama submitted nominations to the Senate for all three NMB positions, but they were returned along with a number of other presidential nominations that did not receive action prior to the 112th Congress's adjournment.
Obama is likely to resubmit all three names now that the 113th Congress has begun.
"I haven't heard there was a problem" with any of the NMB nominations, Reinert said. "It's just a matter of the legislative agenda-getting it done," he said.
In December 2012, the president nominated board Member Linda Puchala, a Democrat who has served since 2009, to a second term and Republican Nicholas Christopher Geale to fill a vacancy on the three-member panel. Obama previously nominated Harry Hoglander, also a Democrat, to a fourth term on the board.
On Jan. 24, Obama resubmitted Geale's nomination to the Senate.
Although the terms of both Hoglander and Puchala have expired, they are allowed under the Railway Labor Act to continue to serve.
A staff director and former counsel of the Senate Health, Education, Labor, and Pensions Committee, Geale would replace NMB Member Elizabeth Dougherty, who resigned in June 2012, for the remainder of her term, which expires July 1, 2013.