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Hold the CHAOS!

posted by John Pottow

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.

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