Release #10.006
February 25, 2010

Congress Must Swiftly Pass Comprehensive Bankruptcy Reform Legislation

WASHINGTON – The Air Line Pilots Association, Int’l (ALPA), welcomes legislation introduced in Congress that would comprehensively overhaul the U.S. Bankruptcy Code to better protect U.S. workers and prevent companies from exploiting the process to reward executives and deny employees their collective bargaining rights.

“Employees who have helped build a company and contribute to its bottom line deserve to be treated equally and fairly in the bankruptcy process,” said Capt. John Prater, ALPA’s president. “ALPA commends Sen. Dick Durbin (D-Ill.) and Rep. John Conyers (D-Mich.) for introducing this legislation to put transparency back in the process, stop companies from rewarding executives for declaring bankruptcy, and ensure that any cuts to workers’ pay or benefits are truly needed and fair in comparison to sacrifices by other stakeholders.”

The Protecting Employees and Retirees in Business Bankruptcies Act of 2010 (S. 3033 and H.R. 4677), which has been introduced in both the U.S. Senate and the U.S. House of Representatives, clarifies the standards that bankruptcy courts must use to determine the outcome of a case. It also directs courts to weigh in their deliberations the ramifications that a reorganization plan will have for workers, including effects on wages, job security, health-care benefits, pension and other retirement plans, and the legal requirement for adequate notice of job termination.

“History shows that managements exploit the bankruptcy process to get the economic changes they want from employees, rather than the changes that are truly needed for the survival of the company,” continued Prater. “This legislation will restore balance to the bankruptcy process and with it an incentive for management to bargain in good faith.”

The current bankruptcy process enables employers to impose contract changes through the court and outside of the normal collective bargaining process. Recent bankruptcy court decisions have greatly loosened the standards for employers to force economic concessions from workers. As a result, employers have been able to breach their employees’ contracts with impunity, and workers have lost critical leverage in the process, with grossly unfair results.

“In these challenging economic times, Congress must make certain that employees and their families are not forced to make financial sacrifices while CEOs reward themselves with lavish bonuses and pay increases,” continued Prater.

This legislation reestablishes collective bargaining as the primary means to make any changes to a labor contract and clarifies that a union may seek damages from the employer, or strike, if the bankruptcy process results in forced changes to a collectively bargained agreement.

“Managements must work fairly with their employees as partners to restore the health of their company during a financial crisis,” concluded Prater. “Congress owes it to workers across this country to swiftly pass this comprehensive reform legislation and restore basic fairness for workers in the bankruptcy process.”

ALPA strongly urges U.S. Senate and U.S. House leadership to act quickly to pass this legislation.

Founded in 1931, ALPA is the world’s largest pilot union, representing more than 53,000 pilots at 37 airlines in the United States and Canada. Visit the ALPA website at


CONTACT: Linda Shotwell, 703/481-4440 or