US Airways Pilots Look to Endgame in Seniority Dispute

CHARLOTTE, N.C. ( TheStreet) -- A federal judge in Phoenix has set Sept. 24 for a hearing that likely will begin the end game in the eight-year old seniority dispute between the two pilot groups at US Airways ( LCC) .

Roslyn Silver, chief judge of the U.S. District Court in Phoenix, ordered the hearing in a case brought by pilots for the former America West, which merged with US Airways in 2005. The former AWA pilots allege that the U.S. Airlines Pilots Association, which represents the US Airways pilots, does not fairly represent them.

The pending merger with American Airlines ( AAMRQ.PK) means the time to resolve the dispute has arrived, Silver wrote last month, in her order setting the date.

Pilots from America West and pilots from the pre-merger US Airways, known as "the east," have never agreed on a seniority list. They agreed to binding arbitration, But in 2007 that process resulted in the controversial Nicolau ruling, which appeared to so strongly favor America West pilots that the pilot group, numerically dominated by east pilots, broke from the Air Line Pilots Association and created a new union, the U.S. Airline Pilots Association.

Since then, three cases have been filed in Phoenix and one has been heard by the Ninth Circuit Court of Appeals in San Francisco. Now the case is back in Phoenix, although the likelihood is that whoever loses there will appeal to the Ninth Circuit.

In the introduction to her order, Silver referred to three cases and to the Ninth Circuit's 2010 ruling that the case was not "ripe" because no one had yet been damaged by it, and summarized the litigation sequence with a baseball analogy.

"This is the third time a group of pilots formerly employed by America West Airlines, Inc. have been in litigation with their union based on the union allegedly mishandling the integration of seniority lists," Silver wrote. "The prior two suits were dismissed as not ripe, and the pilots may fear a strikeout. Here, though, the pilots' claim puts them on first base."

The issue is now ripe, Silver said, because USAPA entered into a memorandum of understanding with the Allied Pilots Association, which represents American pilots. The MOU foresees establishing a seniority list under the process established by the McCaskill-Bond Amendment, passed by Congress in 2008, which includes negotiations followed by arbitration. Silver said she views the MOU as a collective bargaining agreement, ratified by all pilots working for US Airways.

Silver provided two reasons for finding the case ripe. First, she said: "USAPA entered into the MOU and the MOU does not require that USAPA go into the McCaskill-Bond process with the Nicolau award. Deciding whether entering into that MOU breached the duty of fair representation does not depend on anything yet to happen."

Secondly, she said: "The west pilots, US Airways, and AMR all stress that allowing the dispute between the west pilots and USAPA to continue to fester would introduce substantial uncertainty into the merger process. That uncertainty would frustrate a primary purpose of the merger -- the immediate orderly integration of the two airlines' operations."

In March 2013, west pilots sued USAPA, alleging that it failed in its duty to provide fair representation by its intention to approach the McCaskill-Bond process while advocating a date-of-hire seniority list, rather than a list based on the Nicolau award.

A USAPA spokesman declined to comment for this story. USAPA's position has been that the MOU, and its deferral to McCaskill-Bond in the seniority case, was overwhelmingly ratified by members, and that 95% of the Phoenix-based, former America West pilots ratified it -- the highest margin of support at any base. The MOU included about $1.6 billion worth of gains in wages and benefits over six years for the US Airways pilots.

A spokesman for the former America West pilots could not be reached for comment. However, in a July 25 e-mail to its backers, Leonidas, which supports the west pilots' legal actions, said west pilots want to be formally represented in the MOU seniority integration in order to be sure that the Nicolau award is considered.

"The basis for this request is the demonstrated inability of USAPA, or any merger committee that it forms, to fairly represent the West pilots in a seniority integration," Leonidas said. " We are confident that the Nicolau will be the list which is used for the McCaskill-Bond process, (and) separate west presence will help insure that the Airways-American seniority integration is not corrupted by lingering prejudices within USAPA."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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