Pilots to Congress: Stop Management from Exploiting the Bankruptcy Process
Current Law Fails to Protect Workers’ Right to Strike

June 5, 2008 - On Thursday, June 5, ALPA Managing Attorney Marcus Migliore and AFL-CIO representatives testified before the U.S. House Committee on the Judiciary’s Commercial and Administrative Law Subcommittee to urge Congress to swiftly reform Section 1113 of the Bankruptcy Code. Migliore underscored the urgent need to prevent airline and other management from exploiting the law to gut employee labor contracts and deny workers their most powerful leverage in bargaining—the right to strike—while corporate executives pay themselves millions in bonuses.

“Employers, including airlines, have successfully hijacked the 1113 process from Congress’ original intent to protect workers and their families and now use it as a 51-day countdown to unilaterally terminate employees’ hard-won contracts,” said Migliore. “Skyrocketing fuel costs and a sluggish economy mean that bankruptcy continues to loom as a threat to airline employees--the time is now for Congress to act decisively to protect U.S. workers.”

The Protecting Employees and Retirees in Business Bankruptcies Act of 2007 (H.R. 3652) would tighten loose standards and reverse unfair court decisions that have permitted employers to decimate employees’ pay, retirement and working conditions, deny workers compensation for breach of their labor agreements, and prohibit workers from striking when their agreements are set aside in bankruptcy.

The legislation will ensure that labor contract changes can be forced upon employees only when truly necessary and require that sacrifices of employees and retirees be fair and proportional to those of corporate executives. By ensuring the right to strike in response to a breach of employees’ labor agreement, the bill also aims to put workers back on a more equal footing with businesses and other creditors who have the right not to perform services when their contracts are set aside in bankruptcy.

“Management uses current bankruptcy law to rubberstamp multi-million dollar rewards for the very corporate executives and stakeholders who made the business decisions that led to the airlines’ bankruptcies in the first place,” said ALPA’s President, Capt. John Prater, when commenting on Migliore’s testimony. “Meanwhile, pilots and workers are locked into long-term, deeply concessionary contracts.”

“U.S. workers suffered a horrific setback when airlines succeeded in asking bankruptcy and federal courts to strip employees of their right to strike when facing unilateral and fundamental breaches of their collective bargaining agreements,” said Prater. “Given the state of the airline industry today, Congress must take a stand now, for airline pilots, and every U.S. worker, and swiftly reform this country’s flawed bankruptcy code.”