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Sep282009

« Airline Industry Eyes on the National Mediation Board »

The Railway Labor Act (RLA), which governs labor relations in the rail and airline industries, has been around longer than the airlines flying today.  First passed in 1926 and amended in 1934, it is designed in part to ensure that labor disputes in these key industries can be managed in a way so that they don’t interfere with the nation’s critical commerce.

Decades later, we can all point to the RLA and find certain aspects of the law that should be changed.  And that’s a worthwhile discussion. As long as it’s based in the understanding that the purpose of the RLA was to promote stability and not to disrupt interstate commerce with labor strife.  In its own quirky way, it accomplished these two inherent objectives. 

Now some in organized labor want to inject instability on top of an already unstable industry architecture.  Labor leaders insist they want a more predictable, efficient system. The question is whether the reform being sought will bring unintended consequences?

Organized Labor, President Obama and the National Mediation Board

Recently, the AFL-CIO’s Transportation Trades Department (TTD) asked the National Mediation Board to change 75 years of practice regarding representation elections. The practice in place today requires that a union win with a majority of employees within a “class” or “craft” in order to be certified as those workers’ collective bargaining representative.  The TTD, running interference for the Association of Flight Attendants (AFA-CWA) and the International Association of Machinists and Aerospace Workers (IAMAW), is seeking to make a major alteration to the practice that would put the union in place if it gets “yes” votes from a majority of those voting, not a majority of all employees in the class or craft.

This issue promises to provide some insight into the power of organized airline labor in the Obama Administration. Clearly, labor played a key role in electing the President.  But to date, labor has not reaped the successes many expected in the early months of the new administration.  Will the administration pressure the National Mediation Board to make this change?

After 75 Years, Why Now?

It is pretty simple and transparent.  Neither the AFA-CWA nor the IAMAW believes that they have the votes necessary to win an election in their efforts to organize the combined work forces from the merger of Delta and Northwest.  So labor hopes that a friendly administration will change the process to help them pick up these coveted new members – particularly on the Delta side where the flight attendants and maintenance workers have never been union.

Or, as the union leaders have clearly calculated, if you fail to win hearts and minds at the ballot box (as they have not once but twice) then change the rules. 

The AFA-CWA failed twice in its efforts to organize Delta flight attendants. In their last campaign, only 40 percent of eligible flight attendants even voted. And under NMB procedures, those who don’t vote are counted as a “no” vote regarding union representation. 

After months of delay in seeking to have Delta and Northwest declared a single carrier – an administrative procedure necessary to hold an election for union representation – the AFA-CWA petitioned the NMB for the single carrier determination in July.  The IAMAW followed in August, but is not seeking to organize the entire group of eligible employees in various class and crafts of Delta and Northwest employees.  Unfortunately, an election cannot proceed until the TTD’s request of the NMB has been decided upon.  Therefore, more hurry up and wait for affected employee groups. 

The TTD asked the NMB to change election procedures on September 2, 2009.  Since that time, various groups opposed the change in formal comments to the Board. Opponents include the Air Transport Association, the Regional Airline Association, and the Airline Industrial Relations Conference.

The TTD’s position is that the NMB’s policy is “clearly inconsistent with the longstanding, widely accepted understanding of a democratic election process in the public arena.”

I could wrap myself in that flag -- I guess. And as I read through the various filings, I understand the legal arguments being made. But I am not a lawyer.  So I am going to think about this in another way.

Majority Rule

The “majority rule” issue that is at the center of the TTD’s request seems to have a philosophical bent toward stability:  If a majority of workers in a class or craft want a union to be its collective bargaining representative, the union then has a mandate to bargain with the employer.  With less than a majority support, how effective can a union be in representing the work group?  If the ultimate weapon of the union is the ability to engage in “self help” (the RLA term for strikes, work stoppages, hiring replacement workers and other actions either side can take if the negotiating parties are “released” from mediation), then how effective can the union be in forcing the employer to improve pay and working conditions if more than half of the workers choose to work during a declared job action?

With nearly 150,000 airline industry jobs lost since 2002, it is easy to understand why labor is concerned about the decline in its ranks. Delta has long been a tempting target for unions. Only the pilots and two smaller groups of workers are now unionized.  Delta is a non-union airline by industry measures.  So unionizing the world’s largest airline could be a big step for unions trying to replenish their membership roles following the industry’s restructuring period.  Simply, labor wants to change the majority rule because union activists are those that vote. 

In AFA’s last election attempt at Delta, one assumes that 60 percent of eligible flight attendants didn’t vote because they knew that not to vote was a “no” vote. A clear majority said that they were not interested in changing the labor dynamic at the airline.  But the majority of the 40 percent who did vote supported the union. 

Now enter Northwest and its 7,000 flight attendants. Prior to the merger, they already were members of the AFA-CWA.  Add those votes to the mix and AFA-CWA should easily get a majority of the combined work force.

Fragmented Labor Meet a Fragmented Airline Industry

Today’s AFL-CIO is not the same force that it was during its "New Deal" heyday.  Then, the labor movement was consolidated and spoke with one voice.  Today it does not.  Two large and powerful unions, the Teamsters and the Service Employees International Union (SEIU), recently broke from the AFL-CIO to form a rival coalition.  That defection has created a fragmented labor industry in which the old rules no longer apply. Already, unions in rival coalitions have tried to “raid” members from other unions – something the old rules prohibited. Herein lies the rub.

Arguably, one of the fundamental issues that airline labor has struggled to recognize and reconcile in a constructive way is the fragmented airline market.  Yes, fragmentation leads to hyper competition, but it also creates an unstable industry structure.  This unstable structure has forced airlines to seek wage cuts and productivity gains from labor in order to prevent competing airlines from entering markets and stealing the incumbent carrier’s traffic and revenue - and to live to fight another day.

In my view, changing long-established rules that are intended to promote stability has the potential to exacerbate an already unstable situation. Consider the scenario played out by AMFA following restructuring at United.  Because AMFA is not an AFL-CIO union, it could raid - or threaten to raid - at will mechanic groups at those airlines where unions had gone along with deep concessionary agreements under bankruptcy or other financial pressure. In fact, it won a few elections along the way only to lose later when they failed to deliver on their promise of securing “snapbacks” and wage and benefit increases the industry simply couldn’t afford.

I have seen many airlines struggle in negotiations with AMFA-targeted groups.  In many cases, the company and the incumbent union could probably have reached agreement earlier but for the union’s fear that by agreeing to some perceived negative change to the agreement, they would invite a raid from AMFA hoping to steal their dues-paying members.  This created a destructive and mercenary element to contract negotiations that too often delayed deals and hurt airlines and their employees.

Another question worth asking, but unresolved, is if a majority rule provision were replaced whether a minority of the class and craft could then move to force an election to decertify the union?  (The RLA would seem to be silent on this subject) Imagine the destabilizing effect of that situation.  Just about any tentative agreement I can think of would have elements or aspects that may not be palatable to some vocal minority.  So if an agreement ultimately passes by a razor thin margin, the vocal minority begins a campaign to replace the union that made the deal, looking to a new union that will promise that it can accomplish what the incumbent could not.  And so it goes.......

I may be going out on a limb here, but I’d guess this is a scenario that the Teamsters have already thought through in trying to change the RLA.  The minority rule should allow for raids that could bring new members into the Teamster ranks.

Concluding Thoughts

There’s a real risk to the change the union seeks, particularly during a collective bargaining cycle like this one in which the expectations of employees are so far from most airlines’ ability to afford. There is enough instability in this industry without creating a situation that would bring even more.

Labor has asked the NMB to move toward quicker resolutions of cases on the docket.  But the debate over the RLA must also consider the perspective and concerns of incumbent unions who will be hard pressed to make a deal that offers airlines something of what they need – namely, greater productivity – without facing a raid from a hungry competitor.  A hungry competitor that will promise anything without the corresponding responsibilities of working with management and putting together agreements that serve the long-term best interests of the companies and their employees.. 

It is the burden of management to make very difficult decisions based on the competitive environment in which they operate.  In this labor environment, union leaders could very well face the same challenges and be forced to make decisions that are not in the best interests of dues paying members but in the best interest of the institution. And that would be just one unintended consequence of a change in the rules of the game in order to “possibly” achieve a short-term gain.

The alteration sought by the TTD would prove to be a bad NMB policy change I fear -- particularly when one of the most important goals of the new NMB is to resolve cases in a timelier manner. 

Reader Comments (19)

"But to date, labor has not reaped the successes many expected in the early months of the new administration."

I guess I'm nitpicking here, but if the Administration's total disregard for Bankruptcy law wasn't a victory for the UAW, then I'm not sure what kind of victory is really possible for organized labor these days.

09.28.2009 | Unregistered CommenterBrad

Brad

Fair point and you are not nitpicking. For someone critical of the restructuring of the auto industry, particularly as it pertains to labor -- my bad.

09.28.2009 | Registered Commenterswelbar

I guess you are going to be petitioning the government soon to be sure that every President, Senator and Congressional Rep all the way down to Dog Catcher is elected by an actual majority of the people served. Your inane argument would bring the US to a standstill electorally and that is your true aim with union representation.

You whine that the "stability" that is there now would be threatened and an inconvenience to the traveling public. How about the complete lack of a voice that American workers have had for years because people like you think that their convenience comes ahead of someone else's rights to union representation. Life is not pretty, stable and unchanging. Freedom is not risk-free. And your convenience is not justification to advocate the electoral restriction of workers' rights and freedoms.

09.29.2009 | Unregistered CommenterA different Brad

wow.

So you would be fine with a minority rule whereby a small faction of the union could decertify the incumbent? Or trigger an election if unhappy? Today's the majority rule provides high barriers to entry and high barriers to exit for union representation. The change in the rule being sought provides for low barriers to entry but still maintains many of the high barriers to exit.

If there is a change shouldn't there be barriers to exit be lowered. Or you just want it one way?

09.29.2009 | Unregistered Commenterswelbar

The "majority" of votes cast is the standard even in elections under teh NLRA, why make it so difficult for the employees under the RLA to unionize?

Management usually pads the list of eligible voters to make it even harder to gain that 50%+1. Unlike the NLRA, under the RLA the union doesn't even get the excelsior list.

What happened to a level playing field?

09.29.2009 | Unregistered CommenterLara

Lara

There are many differences between the RLA and NLRA. Read comment to Brad above as well. I just think there could very well be unintended consequences to a quick change to the majority rule. If you win the hearts and minds, people will go to the ballot box.

09.29.2009 | Unregistered Commenterswelbar

Perhaps we should all take a couple of different views. The current rule has been in place for 75 years. If it isn't broke don't fix it? or If the rule has to be changed, perhaps they can make it so idividuals have the right to stay out of the union individually and work under their own merits whereby each and every employee can opt in or out and not have to pay blood money to the union for the right to work?

Some people love unions because they don't have the courage to go find another job if they don't like their current employment situations. Many people want to speak for themselves, and are willing and able to communicate effectively to their supervisor without outside interference.

To argue choice by the employees, I believe most don't have a choice when union "bosses" promote fear amongst work groups when there isn't anything really to fear but normal external forces such as economy, fuel costs, and technology enhancements which all change employment needs.

Job security should always be based on best person for the job and not on hire date. Many employees at unionized companies feel a sense of entitlement because of years in that job. This can cause stagnation. In the new world economy, companies need to have the most effective/efficient employees and need to be nimble to react to market forces.

As a country, we need to realize what will drive our economies in the future, and what will hold our children back in years to come. We need to learn the lessons from GM and Chrysler and make sure us taxpayers don't get left paying for overpriced benefits for stagnated employees and unrealistic pay schemes at companies that make inferior products for people that don't want to buy them.

My two cents!

09.29.2009 | Unregistered CommenterJMinPA

I work for an airline, and I know how often French airline workers stage walkouts. Yes, it creates chaos for a few days, but life goes on. It's no worse than a typical Sunday after Thanksgiving. "Stability" is really a code word for "I like paying $200 for a round trip ticket from New York to Los Angeles, and I don't want anyone driving the cost up to where it should be." If you want your filghts to be reliable, it costs money to have spare aircraft available and have more than bare minimum staffing at airports. And career airline employees who know what they are doing are going to keep things moving better than minimum wage employees of outsourcing companies. You want to know why your luggage didn't arrive with you? It's because the guy who was supposed to put it on the plane never had to memorize city codes, because training costs money, and outsourcing is all about getting it done cheap.

09.29.2009 | Unregistered CommenterVincent

Oh give me a break Vincent I too work for an airline and the reason the baggage did not get there was because the worker had his sense of entitlement and his "union break" or he just didnt feel like actually working hard that day because in his mind it came down to "Its not like they are going to fire me I have a union" MOST of the time the unions tend to keep the jobs of people who dont deserve them and get peoples jobs back that the majority of the workforce feel should not have gotten them back. I watch 50 flight attendants CAUGHT in a theft ring slowly get there jobs back over 2 yrs while we were all mad and waiting for our grievance to be worked on but had to wait because they were back logged or it just wasnt a good enough case for them to fight they only want the good stuff.
Most Not All but Most of the people usually trying to get the union on the property with there Fire and Brimstone threats on how bad it is, how we are all going to lose our jobs and so forth are not people the employees even want representing them. They are usually the horrible pissed off overweight lazy workforce who knows there days are numbered because those of us who give a damn about our job and company want them gone. But with a non-union company it take a lot to terminate someone because they have to be real careful with it. Where a union carrier its easy to terminate just write the person up for EVERY minor infraction and in no short time BAM your fired with weak promises from the union that they might get your job back in a few years. Usually its the good guys who just got caught in a bad situation who get let go, and I have seen it where management does not want to fire them but they have no choice in order to show fairness to the union. Who usually is in a you scratch our back we will scratch your with management anyways. The flight attendants at Delta are one of the highest paid workgroups out of all the AFA carriers because they learned that "The threat of a union is far greater than actually having a union" Unions did a real good job for the Steel, and Auto industry didnt they.... and for the record I am a former Grievance Representative for the Association of Flight Attendants and I have seen what goes on behind closed doors. What the AFA and IAM knows is they have lost A LOT of support at Delta and mainly at Northwest. How would it look if after the vote they lose, have no real money to survive and have to jack dues up again or file for insolvency because they pissed money away on inflated union salaries and frivlous items. I bet it would also look bad when a workgroup that was 85% unionized says they dont feel they need you anymore, it might give other employees a chance to see things can work with out a union and do the same thing. They know they dont have the votes so its easier to change the rules. Most Airlines employees had no choice on a union it was just already there when they got there and has been the status quo. BTW the NWA unions are scared because they have not won an election yet, one workgroup did not even file, the mechanics at NWA just filed to have the union desolved because there Delta counterparts already had higher pay and better workrules they had been fight for, for over 15 yrs and never gotten and by there estimates they had MAYBE 20% support, so they just left the property. Leave the rules like they are if the unions truly have the majority of the support they clam to have, those people will make time to vote afterall its usually a 4-5 week voting period

09.29.2009 | Unregistered CommenterUnions are nuts

Unions are nuts,

I understand what you're saying. I work for Delta, and, despite the tone of my previous post, I do not want a union for Delta. I get the fact that we already have de facto union reprsentation without having to pay the dues. The fact that every other major airline is heavily unionized causes Delta management to match or exceed the industry standard for pay and benefits in order to prevent unionization. I've also heard similar tales about having to keep the deadwood from other people who've worked at unionized airlines But I fail to see why airlines should have different rules on strikes and union representation than other industries just because travelers don't want to be inconvenienced.

I used to take reservations phone calls, and I can't tell you how many conversations I had that went something like, "What do you mean a ticket from FLL to LGA ito see my grandchildren is $97 round trip? Oh, my Gawd! It was only $95 last year. You people are terrible. Don't you have anything cheaper?"

Meanwhile, we are taking numerous rounds of pay and benefit cuts to subsidize these ridiculously low air fares. So I'm not particularly sympathetic to the traveling public when they complain about delays, lost luggage, change fees, understaffed ticket counters, or the unavailability of frequent flyer seats because capacity has been cut. They wanted deregulation and competition to give them cheaper tickets, and these things are the trade-offs that come with them.

09.29.2009 | Unregistered CommenterVincent

Why is it only the wages of hourly paid employees can cause a business to fail? Most union activies in the workplace have nothing to do with pay. Furthermore when things are going great the union is no problem, only when the going gets tough. I agree with the union on this issue if you are too lazy to pick up a phone then why should you be counted. If you don't vote then you go with the majority of the voters and so be it.

09.29.2009 | Unregistered CommenterFab J

One thing that cannot be emphasized enough is that not voting for a union is a conscious action, not voter apathy. The comparison to an election for public office is disingenuous at best and an outright lie at worst. I was recently exposed to a union vote at my airline and it failed. The union organizers and the company's management both advertised incessantly the fact that a non-vote was a "no" vote. I was opposed to the union and made a conscious decision to not vote. It is my understanding that the voting process makes it difficult if not impossible to vote no. Additionally, if I do not vote for a candidate for public office and that candidate is elected, he cannot force me to join and fund his political party. The union can and will force me to join and pay for their so-called services.

Additionally, if the laws were changed and a minority group voted a union onto the property of my airline and that minority staged a strike, I would not cross the picket line out of a fear of retribution that would restrict and possibly eliminate my ability to work for any airline in the future. Union intimidation and illegal retributions against those who oppose them are alive and well.

09.30.2009 | Unregistered Commenteranonymous

I will be voting soon here in ATL.
I am not yet sure how to vote. My loyalty is with Delta.
But... Delta has been hiring mgmt. off the street in droves.
There is no more Delta culture.. nobody is promoted from within.
The Delta family has ceased to exist. This company is being run by outsiders from everywhere except the airline industry.
My personal observation is that it's by design.
That leaves me feeling uneasy.
What happened to the days when you built up a company from within?
However.. I am still unsold on the IAM.
I am not sure they have anything to offer me other than a contract. ( whatever that is worth)
The NWA employees that are here in ATL are not all pro IAM.
Some have even told me that they want out.
I have been to a few IAM meetings here and learned very little to change my mind.
So... I am here... sitting on the fence.
Still unsure.

09.30.2009 | Unregistered Commenterbryan in ATL

bryan in ATL,

I know what you mean. So far, DL has treated us at least as well as, and in many cases better than, employees of unionized airlines. But if we vote down the union now, the likelihood of ever getting another chance at it is very slim. And once management doesn't have to worry about unionization, are we suddenly (or, more likely, gradually) going to be treated like Wal Mart employees?

The company's track record has been mostly good in the past, but, as you pointed out, the senior executives at the company who started out as ramp workers, ACS agents, Res agents, or flight attendants has largely been replaced by MBAs who may or may not have much airline experience, let alone 20+ years at DL.

09.30.2009 | Unregistered CommenterVincent

I find it intresting that Delta management posted your latest blog entry on the company website.All Delta needed for the continual blast of rah-rah we get daily. What some Delta folks are forgetting is that DL has not kept up with industry standards. And if they have tried in some ways to "keep up" it's because union members at other carriers have worked for those benefits they are reaping, They have the worst health care in the industry,they literally threw out the Flight Attendants pension with the baby and the bath water and in an industry where work rules,often mean getting as little as 6 hours of sleep in a 24 hour period there's a real need for a union.DL makes this HUGE deal of their Breast Cancer Contribution,(pretty pink plane,pretty pink uniforms,etc) yet the cost of having breast cancer at DL far exceeds that at NWA because of union negotiated health care.While you may feel that AFA is concerned about the number of votes it needs,you should perhaps review the history of DL's prior actions against those who attempted to unionize.The current CEO is the former CEO of NWA (suprise!) who attempted to outsource thousands of Flight attendant jobs to Asia ,and swept the mechanics union out at NWA.
While the outside of the airplanes may say Delta, the inside is is all Northwest.
After over 30 years at NWA I can assure you, that without a union assisting in fair work rules Delta' employees lives will never be the same. If all the shareholders don't vote ...are their votes automatically considered a NO vote?

09.30.2009 | Unregistered CommenterBeth

Beth

I did not write so Delta could repost on their site. Actually I am pretty unconcerned about the number of votes AFA gets, has or does not have. What concerns me is the instability this change could bring. That is what I wrote on. As for what unions have done in the health care arena, there has been good. That fact either resonates with the hearts and minds of eligible voters or it does not.

I have no skin in this fight other than to acknowledge it is potentially a significant issue that has down line ramifications. I could make a case that if a minority rule were adopted, no incumbent union could ever make a deal and their members lose. As with any argument, there are two sides.

I am glad you raised the AMFA case at NWA. That was a union that employed poor strategy and lost. Then were voted out at UAL after raiding an IAM group that made a deal in bankruptcy. That is precisely the type of instability I attempted to point out in my piece. Sorry you missed that as it had very little to do with votes.

09.30.2009 | Unregistered Commenterswelbar

Dear Bryon in ATL & Vincent,
AFA will make about $12 million a year in dues from the combined NW & DL flight attendant group. Why do you think AFA is promising you the moon & stars? (Yet they haven't delivered that to United or US Air have they?) It's about $$$ !!! Always has been, always will be. Unions are a business just like the airlines they represent. They all need $$$ to stay alive.

Vincent, if you want to move up at Delta get an MBA and move into upper management. You only get to that level with an education. No company is going to move an entry level employee into upper management if that employee doesn't have the degree required for that position. That's HR101. As far as "this is the last chance" to vote a union in. Again, for $12 million a year, AFA will hold an election every chance they get!

Personally, I hope DL unionizes, what they really need is a couple of CBAs that extend out 3x further than the most forgiving of solvency estimates. Actually, what they REALLY need is an inflexible cost of labor while facing unprecedented volatility in Oil/JF (though impending conflict in ME will probably help that, right?). Hey maybe Mgmt can throw more millions in cash at other "hometown" sponsorships that aren't in ATL..

Btw, i have no vested interest in seeing DL fail. none. what. so. ever.

=P

10.1.2009 | Unregistered CommenterBrad

I finally decided to write a comment on your blog. I just wanted to say good job. I really enjoy reading your posts and comments.

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