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Monday
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.