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Judge to US Airways: Pilot Pact Can Eschew Disputed Seniority List

Stocks in this article: DAL LCC UAL

PHOENIX -- ( TheStreet) -- A proposed decision by a U.S. District Court Judge in Phoenix could enable US Airways (LCC) and its pilots to restart contract negotiations, which ground to a halt five years ago because of a bitter battle over pilot seniority.

The proposed ruling, suggested Tuesday by Judge Roslyn Silver, apparently will say the airline and its pilots union can negotiate a contract that does not include an arbitrators' controversial 2007 seniority list. A dispute over the list has deeply separated pilots ever since the 2005 merger between US Airways and America West.

Silver's ruling would not, however, disenfranchise supporters of the list proposed by arbitrator George Nicolau. Rather, it would delay the possibility of legal action on a contract until a contract actually exists -- in the court's terms, until the issue is "ripe." In that regard, Silver reiterated the findings of a 2010 ruling by a U.S. Appeals Court in San Francisco, which had overruled a previous ruling on the simmering dispute by a different judge in the Phoenix court.

So the likelihood of further legal action -- by America West pilots, the airline, or both -- remains.

Silver on Tuesday heard a request by US Airways for a ruling on whether it must accept the Nicolau award or whether it can negotiate a contract that doesn't include the ruling. The carrier has said it simply wants to negotiate a contract without being liable afterwards.

The hearing lasted about an hour and 20 minutes. More than 100 pilots, nearly all of them from America West, attended, spilling over into the empty jury box where Silver allowed seating. She began the session by saying she had written a proposed ruling, then asked attorneys for the three parties -- the airline, USAPA, and the west pilot group - if they sought any alterations. She heard oral testimony and said she will issue a final ruling shortly.

Although pilots from predecessor US Airways agreed to binding arbitration on seniority, they generally felt so disenfranchised by Nicolau's list that they voted to leave the Air Line Pilots Association after 57 years and to create a new union, the U.S. Airline Pilots Association. The list's most controversial component placed a 56-year-old pilot with 17 years at US Airways, who was never laid off, behind a 35-year-old America West pilot with a few months on the job. In hundreds of similar cases, east pilots with 15 or more years at the carrier went behind west pilots with just a few years.

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