United Pilots Prevail, Judge Orders Management to Continue Pension Payments
On February 18, U.S. Bankruptcy Court Judge Eugene Wedoff granted an Air Line Pilots Association motion compelling United Airlines to continue to pay pilot "non-qualified" pension benefits, which represent benefits based on pilot compensation that exceed the set limit established by the IRS. The non-qualified pension benefits are paid directly from United's treasury, and management had agreed to this benefit in its collective bargaining agreement with ALPA.
The judge, in his oral ruling, stated that United management's assertion that it could "suspend" payments lacked any legal basis under the collective bargaining agreement and that management's attempt to do so was frivolous. Because United management's position lacked any legal support, ALPA was able to avoid arbitration and seek relief directly from the court.
Judge Wedoff said that United had clearly agreed in Section 4 of the recently ratified agreement with ALPA to continue to pay these benefits. The management committed to maintaining the A-Plan in full force for 90 days to allow ALPA and management to seek a legislative or economic remedy to the challenges facing United's pension program.
After United management notified pilots of its February 5 decision to suspend payment of the full benefits, the United MEC had asked management to reconsider its decision. Unfortunately, management rejected the MEC's request out of hand, leaving ALPA with no option but to take legal action.
In a letter to United pilots on February 15, MEC Chairman Capt. Mark Bathurst said that ALPA viewed United management's decision as a clear violation of its contract, as well as the bankruptcy code. Capt. Bathurst characterized as "regrettable" the fact that ALPA had been put in a position that made it necessary to file this motion.
"This was an unfortunate episode in United's bankruptcy case," Capt. Bathurst said after Judge Wedoff's ruling. "We worked hard to keep this out of the courtroom, but United management's unwillingness to reconsider its decision left us no alternative.
"We fully expect management to adhere to the collective bargaining agreement it has reached with us, and to avoid situations in the future that have the potential of squandering any remaining good will."