March 20, 2008
ALPA Defeats Pinnacle Management in Arbitration
Arbitrator rules Pinnacle Airlines Corp. and Pinnacle Airlines, Inc. functioned as alter egos to sidestep pilots’ contract
WASHINGTON – The Pinnacle Airlines pilots, represented by the Air Line Pilots Association, Int’l, (ALPA) won big when an arbitrator ruled that Pinnacle Airlines, Inc. (PAI) and Pinnacle Airlines Corp. (PNCL) violated the pilots’ contractual rights when management refused to meet and discuss labor protection issues with them after PNCL bought Colgan Air in early 2007.
Pinnacle Airlines, Inc. is a wholly-owned subsidiary of Pinnacle Airlines Corp. The arbitrator found that PNCL and PAI were alter egos functioning as a single employer at the time of the Colgan purchase. By claiming separate organizations, Pinnacle Airlines Corp. alleged it was not legally bound by the contract pilots signed with Pinnacle Airlines, Inc.
“Our pilots knew that Pinnacle management was playing games—we simply built the case,” said Capt. John Prater, president of ALPA. “This victory shows the strength of a resourceful union—we put a lot of manpower behind this pilot group, and they came out of this arbitration with another win.”
“This is a major victory for us,” said Capt. Scott Erickson, chairman of the Pinnacle unit of ALPA. “The arbitrator recognized the corporate shell game this management has been trying to play and saw through its pathetic attempt to create an alter ego company to sidestep the legally binding contract they signed with us in 1999.”
The arbitrator ruled that Pinnacle’s “consistent failure to distinguish between the two corporate entities provides persuasive evidence that Pinnacle Airlines Corp. and Pinnacle Airlines, Inc. were alter egos functioning as a single employer at the time of the acquisition of Colgan by PNCL,” and concluded, “… because PNCL and PAI were alter egos functioning as a single employer when PNCL acquired Colgan …” the company violated the labor protection section of the collective bargaining agreement with the pilots.
“We are very pleased with the arbitrator’s recognition that Pinnacle violated our contract when they refused to negotiate with us after buying Colgan Air,” Erickson said. “We hope this ruling puts an end to managements’ continued quest to deny us our contractual rights, prompting it to negotiate a contract that adequately compensates us for our dedication and sacrifice to this airline.”
Pinnacle pilots and management have been in protracted contract negotiations for more than three years. A mediator assigned by the National Mediation Board has been involved in the process since fall 2006.
The Pinnacle pilots began collective bargaining with management under Section 6 of the Railway Labor Act in February 2005, and the agreement under which their pilots currently work became amendable in May 2005.
Based in Memphis, Pinnacle Airlines operates as Northwest Airlink and Delta Connection and flies more than 130 modern jet aircraft, including the newest addition to their fleet, the CRJ-900, which is operated under the Delta Connection livery.
Founded in 1931, ALPA is the world’s largest pilot union representing more than 61,000 cockpit crewmembers at 43 airlines in the U.S. and Canada. Visit the ALPA website at www.alpa.org.
Scott Erickson, 651-226-3797
Kimberly Seitz, 703-481-4463