CHAPTER 14
THE CONTINENTAL STRIKE
ALPA’s Dark Night of the Soul

In June 1992, the U.S. Senate failed to end a Republican filibuster to block passage of a law that would have protected workers against being “permanently replaced” during a strike. George Bush had vowed to veto it in any case, but 36 GOP senators saved him the trouble by talking the law to death, even though it would have exempted employers who agreed to arbitration. Because professional airline pilots had recently suffered “permanent replacement” during the “Lorenzo Wars” on Continental and Eastern, ALPA lobbied strongly for a political solution to the problem. old Dave Behncke knew, politics matters—particularly in a fight.

ALPA had gotten into a real fight with Frank Lorenzo in 1983. For the 1,000 Continental pilots who stuck it out to the bitter end (Continental counted 2,000 pilots—1,600 active and 400 furloughed, at the time of the strike), a friend in the White House might have made a difference. National Airlines pilots had Harry Truman in 1948, the Southern pilots had John F. Kennedy in 1963. But the Continental pilots would have no such luck with Ronald Reagan.

Being “permanently replaced” has always been the single greatest fear of any union member during a strike. The Railway Labor Act of 1926 and the so-called “pilots’ amendment” to it in 1936 provided legal machinery that lessened, but did not entirely eliminate, the possibility of “permanent replacement.” Political times unfriendly to labor (as the Reagan–Bush years most emphatically were) greatly increased the likelihood of this most devastating of strike outcomes. That’s why Democrats friendly to organized labor in 1992 sought to pass a law to protect future workers against what Frank Lorenzo had done to his pilots.

The Continental strike began in a welter of confusion and disarray. On the union side, nobody was ready for it, no plans had been made, no communications were established, and nobody knew what to do. Continental’s pilots had to immediately shift gears from thinking about how to make their airline work to thinking the unthinkable—how to stop it from working. It was a wrenching transition.

The most appropriate historical analogy to the Continental Strike of 1983–85 would be the outbreak of the Korean War in 1950. The United States then had no combat units on the Korean peninsula, and the only forces available were poorly trained garrison troops in Japan, unaccustomed to field operations. General MacArthur threw in typewriter clerks and motor pool mechanics piecemeal, to be ground up while they tried to remember how to field-strip an M-1 rifle—a weapon most of them hadn’t touched since boot camp. With the United Nations forces crushed back to the Pusan Perimeter at the southeastern tip of the Korean peninsula, the enemy juggernaut stood poised for victory. Then MacArthur rallied, staged the brilliant end-run amphibious landing at Inchon, and won the war—temporarily. Had MacArthur not crossed the 38th parallel and pressed on to the Yalu River, the summer of 1950 would be remembered today as a victory without parallel for American arms.

Perhaps the unhappy outcome of MacArthur’s post-Inchon march to the Manchurian border explains why George Bush ended Desert Storm so abruptly in 1991. He apparently didn’t want to risk his partial victory and be mistaken for another Douglas MacArthur. He won’t be. At the end of Desert Storm, Saddam Hussein still ruled Iraq, and George Bush contented himself with other victories, among them (as professional airline pilots will always remember), a veto of congressional legislation that would have created a Presidential Emergency Board (PEB) to investigate ALPA’s final “Lorenzo War,” the Eastern strike of 1989. In all probability, this PEB would have settled the Eastern strike in ALPA’s favor. PEB intervention had saved ALPA’s bacon in similar strikes before. In some faraway old-pilots’ Valhalla, Dave Behncke must surely have been repeating what he said so often in life—“politics matters.”

The Continental strike of 1983–1985 would have no Inchon Landing to redeem it. Continental’s pilots took terrific losses in the early going while they got their internal problems sorted out, then rallied in their own version of the Pusan Perimeter for a while, only to suffer crushing reverses in the courts. Following the Bildisco Decision of February 1984 (which we will discuss shortly), only the hard core of Continental pilots held out against Lorenzo. If the result wasn’t total defeat, it clearly wasn’t victory either. The hard core hunkered down, doggedly kept faith with each other, and ALPA finally secured their reinstatement—the much maligned “Order and Award” of Oct. 31, 1985 (grimly nicknamed the “Surrender Agreement”), which satisfied nobody. Getting 1,000 loyal ALPA members back into their cockpits, however bloodied, constituted a victory of sorts, even though they returned to work without the ALPA contract that had caused the strike in the first place.

Lorenzo’s bankruptcy court tactics and the judge’s tilting of the playing field in Lorenzo’s favor would permit him to fly through the strike, but we must remember that historically, any airline boss determined to scab out his pilots has always succeeded in doing so. ALPA has never won any strike in its history on pure economic muscle alone, or because a determined opponent like Frank Lorenzo couldn’t find pilots willing to cross picket lines. Even in 1932, at the profession’s beginning, when the sense of brotherhood among airmen was very strong, E.L. Cord was able to staff his Century Airlines against the determined opposition of Dave Behncke and a Congress friendly to organized labor. In 1983, Hank Duffy faced a vastly different situation, one that cried out for a pro-labor President in the White House.

The Reagan Administration created a hostile political climate nationally, which, had it existed during any other ALPA strike historically, would almost certainly have resulted in a crushing defeat. In addition, deregulation spawned a witches’ brew of collateral problems that ALPA had never faced in a strike situation. A festering problem on Frontier, whose management was threatening to create Frontier Horizon, an alter-ego airline similar to New York Air, preoccupied ALPA’s national officers. At the time of Lorenzo’s bankruptcy filing, the September 1983 issue of Air Line Pilot was devoted almost exclusively to Frontier Horizon, which would remain a threat until Frontier itself died. Meanwhile, Frank Lorenzo got a free ride at Continental.

So Hank Duffy would receive a rough baptism in this first great crisis of his presidency, as he fought Lorenzo through a thicket of bankruptcy court decrees no other ALPA strike effort had ever encountered. In the long run, ALPA could claim a qualified victory in that Congress changed the bankruptcy law to prevent any future Lorenzo-style use of it for union-busting. But in the short run and as viewed from the trenches by striking Continental pilots, long-term victories were hard to appreciate.

Events that occurred in the first three weeks of the Continental strike almost foreordained its unhappy outcome. As we have seen, Continental’s dazed MEC told pilots to report to work “under duress” (whatever that meant), following the initial 72-hour bankruptcy shutdown. Lorenzo would not have been able to fly the schedule he planned if the Continental MEC had ordered a walkout from the start. When the Continental MEC belatedly initiated the strike three days later, on October 1, some pilots, accustomed by now to Lorenzo’s Emergency Work Rules, stayed in their cockpits. This group (about 75 pilots) would be joined by approximately 200 more crossovers in October. These “October scabs” would split almost evenly between former TXI and “old” Continental pilots. One of those “urban legends” that plagued the strike effort had a higher number of TXI pilots scabbing than “old” Continental pilots.

“It was quite common for the Continental pilots to believe the Texas guys were scabbing in greater numbers,” recalls Guy Casey, the steady ex-USAF pilot who served as strike coordinator. “I had access to all the records, I checked on it, and it just wasn’t true. I had to go around to all the bases where Continental pilots lived to tell them the percentages were basically the same.”

So, with these pilots (about 20 percent of the prestrike workforce, counting the relatively large contingent of management pilots pressed into service), Lorenzo would be able to fly, if only just barely, about 20 percent of his prestrike schedule, despite ALPA’s “job action.” If weather delays had burned up crew time, Lorenzo would have faced an early shutdown. But placid high pressure dominated October’s weather—a bad omen.

Lorenzo’s success in getting that first group of pilots to cross during the early days of the strike owed much to the skill that earned him the nickname “Frankie Smooth Talk.” Using a technique familiar to old TXI pilots, Lorenzo began to phone pilots personally. Armed with specific details about each pilot’s family situation, such as whether he had a wife or child who might be ill, Lorenzo could be a formidable salesman. Rather than threats, Lorenzo’s most effective tactic was to project a sense of concern, an earnestness that he really needed each pilot. Lorenzo had an undeniable gift for this kind of cajolery, as do all good salesmen. Lorenzo telephoned so many pilots, at all hours, that many wondered when he slept! It was devastatingly effective—Lorenzo’s verbal magic even persuaded one member of Continental’s MEC to cross!

“Look, Frank’s a savvy guy, and he can really be slick,” says Dennis Higgins, former TXI MEC chairman and veteran of many one-on-one confrontations with Lorenzo. “A guy would go home at night from the picket line a strong strike supporter, showing not a flaw in his defenses. The phone rings, and it’s Frank Lorenzo! The pilot sits there with his mouth wide open, and Frank says, ‘I want you to understand that I understand why you are doing what you’re doing. All I want is a chance to explain why we are doing what we are doing, and also to let you know that I need you badly and that I want you to come back so we can put this thing back together just exactly the way you have envisioned.’ Now if the guy hasn’t hung up by this point, he’s hooked! The next day, it’s like he’s kidnapped; we can’t find him, and somebody reports he’s crossed. Frank was good, you bet! The only defense was to say ‘Merry Christmas, Frank,’ and hang up before he started talking.”

Certain aspects of the modern airline pilot’s lifestyle also gave Lorenzo an advantage. Although no statistics exist to specifically prove it, a consensus of opinion holds that airline pilots tend to live up to the limit of their credit—and sometimes a little beyond. A lifestyle full of expensive toys, boats, and second homes left many Continental pilots “financially challenged.” Lorenzo had sources that allowed him to target these pilots with his phone calls—particularly the divorced.

“As soon as a guy’s captain bid comes out, he and his wife start looking for a captain’s house,” Dennis Higgins observes wryly. “Lots of guys were financed to the hilt, particularly those with second wives and new families. The wife would, in the privacy of the home, ask, ‘Are we going to have to move out of the house, take the kids out of the private school, deliver a car back to the bank?’ A pilot’s got to carry the uncertainty of the strike home to her and be able to justify it when the phone rings and she says, ‘It’s Frank Lorenzo!’”

The “might-have-beens” of history, although fascinating, are usually fruitless. But there can be no doubt about the importance of those first few strikers Lorenzo personally persuaded to cross the line. There is a vast difference between the “October scabs” and those who succumbed to sheer hopelessness many months later, particularly after the Bildisco Decision, when it was apparent that Lorenzo would be able to sustain his operation with full approval of the federal courts.

If the Continental strikers had been able to hold those first critical 300 pilots on their side of the picket line in October, Lorenzo almost certainly would have capitulated. For three nervous weeks, Lorenzo trembled on the edge of defeat. He didn’t have enough management pilots to fly his projected schedule for more than a few days, and the sheer logistics of requalification meant that he couldn’t get enough of the 400 Continental furloughees or “off-the-street” new-hires into his cockpits in time to save the situation. In any case, Lorenzo didn’t advertise for “permanent replacement” new-hires until November.

But as October progressed, he was getting enough picket-line crossers to hope that he might not have to hire any pilots “off the street.”

“In the first two weeks, vast numbers were crossing the picket line,” says Dennis Higgins. “There was a lot of concern as to whether we could get that hemorrhaging under control.”

As things steadied, and when it looked like ALPA’s lines were going to hold at the first batch of crossovers, Lorenzo would find pilots elsewhere. But he would have lost without those October “in-house” scabs, particularly a group of 110 who crossed during the third weekend of the strike when the MEC seemed to be in turmoil owing to the recall of Larry Baxter (which we will discuss shortly). As Lorenzo’s skeleton pilot force nearly ran up against the maximum FAA-imposed flight time limits and a shutdown loomed during the closing days of the month, he grew desperate. Proof of Lorenzo’s desperation lay in his quite uncharacteristic willingness to resume serious negotiations in late October.

“In the early stages, Lorenzo wasn’t sure he was going to pull it off in terms of adequate numbers of pilots,” believes Kirby Schnell, whose 553 combat missions as a Marine pilot in Vietnam engendered a toughness that would sustain him as the Continental pilots’ Negotiating Committee chairman throughout the strike. “Once we stabilized our lines, the negotiations were probably as close to real as anything we ever had. But when large numbers of our own pilots started back to work [during the third week], from then on, Lorenzo’s negotiating was nothing more than maintaining a posture for public consumption.”

Once Lorenzo had survived that first month and he realized that he would have a breathing space in which to hire “permanent replacements,” to tap into the reservoir of unemployed pilots who would unhesitatingly cross ALPA’s pickets, negotiations became a sham. By November, the second month of the strike, only hard, remorseless struggle remained.

Although the conventional wisdom holds that after the first month the decks were stacked against the Continental pilots, they were not without weapons, and they made a good fight of it. The courts provided a promising avenue of attack. Because of Lorenzo’s use of the bankruptcy laws, ALPA had standing as a litigant. Continental’s pilots were creditors under the bankruptcy rules because Lorenzo owed them money for unpaid salaries and unfunded pensions. Furthermore, there was always the possibility that he would lose—that a judge would disallow cancellation of union contracts under the bankruptcy code. Eventually, as we shall see, these court actions would not turn out well for ALPA, but they did provide the fulcrum from which ALPA would exert leverage to force Lorenzo into court-ordered negotiations that would bring about the “Order and Award” settlement of 1985. But for many months to come, nobody could be sure of the outcome of these legal actions, so the war had to continue as if they didn’t exist.

In another Korean War analogy, despite the fact that peace talks began at Panmunjom in July 1951, U.N. forces had to continue fighting for two more years, because nobody could be sure that the maddeningly slow negotiations would ever produce anything. The role of embittered, unemployed ex-Braniff pilots in this drama was as critical as the intervention of Chinese “volunteers” on the side of the defeated North Koreans.

“The big difference at Continental was that 4,000 surplus pilots were out there,” Hank Duffy said sadly in his 1990 interview. “The Braniff pilots were pushing each other out of the way to get in.”

Here again, a statesmanlike gesture on the part of Hank Duffy quite unintentionally aggravated the situation. When Braniff emerged from bankruptcy in March 1984, it did so under a new ALPA contract with pay and working conditions many striking Continental pilots thought equivalent to Lorenzo’s. News of this new Braniff contract came almost simultaneously with the Bildisco Decision, angering many weary Continental pilots, who were wavering as their strike settled into its sixth month.

“My first involvement with Braniff was signing that contract,” Hank Duffy explained later. “I debated it and decided I would bring that inferior contract in with an ALPA imprimatur. We held out for all the boilerplate, seniority, and grievance, but anything that cost money we just weren’t going to get.”

Duffy’s contractual lenience toward Braniff’s new owner, Jay Pritzker of Hyatt Hotel fame, struck many Continental strikers as oddly out of sync with ALPA’s policy toward Lorenzo. Of course the great difference between the new Braniff contract and the conditions Lorenzo offered was that the Pritzkers negotiated with ALPA, whereas Lorenzo imposed his terms unilaterally. Duffy hoped that once Braniff was on its feet financially, the “B-scale” contract he signed could be upgraded. As it turned out, he was right, although in 1989, immediately after agreeing to the “industry standard” contract that the first agreement was calculated to procure, “Braniff II” would succumb to “Bankruptcy II.”

So it all came to nothing, but that lay in the future. For the moment, the Continental pilot’s view from the trenches lacked this foresight, and the substandard Braniff contract produced considerable grumbling on the picket line and an increased willingness to cross.

The peculiar nature of the strike’s inception added another handicap. Repeatedly, Lorenzo would ask pilots he telephoned how they had voted on the strike. Lorenzo knew full well that there had been no formal strike ballot, merely a show of hands in crowded mass meetings at the various domiciles, under the kind of confused, “fog of war” conditions any combat veteran would remember.

“There never was a formal mail ballot,” Guy Casey agrees, “but there were voice and hand votes at all the local council meetings, and they were all decidedly in favor of striking.”

These expressions of mass sentiment in favor of fighting Lorenzo were so vociferous that many observers believe they distorted actual strike sentiment and silenced less committed pilots.

“The strike vote in Houston was like a college pep rally, rather than a union business meeting,” complains one disaffected former ALPA member who still flies for Continental and prefers to remain anonymous.

His complaint has a certain validity, one that thoughtful observers believe magnified prostrike sentiment—a sure guarantee of later trouble. No strike can succeed without wholehearted support from the rank-and-file, and union leaders who invent such support take a grave risk. In Continental’s case, there was ample reason to doubt the commitment of rank-and-file line pilots long before the strike began.

“The Continental pilots had a real history of not being good trade-union guys,” says former Executive Vice-President Skip Eglet of Northwest, who like most pilots from that strife-wracked airline, became a close student of the subject. “They’d crossed both the flight attendants and the mechanics, so their rank-and-file pilot just wasn’t prepared to respect a picket line.”

Ironically, ALPA’s offer to sustain the strikers financially, although an unaffected expression of good will and technically made independently of the Continental pilots’ decision to walk out, similarly served to amplify a commitment that was far less certain than it appeared. ALPA’s prestrike benefits policy at the time called for flat payments to each striker, regardless of rank.

“Our paying strikers the same as Lorenzo was a significant gamble,” recalls Continental’s Dennis Duffy, who was serving as an executive vice-president at the time. “But if we could have kept Lorenzo down for a week, he would have quit.”

To ALPA’s national officers, paying the Continental pilots not to work seemed the surest way to guarantee that they would stand solidly together. But there were long-range hazards in this short-range approach, as Guy Casey explains: “Striking captains would get captain pay, striking first officers would get first officer pay. But if a copilot crossed, he would get promoted and draw captain’s pay.”

So ALPA’s policy of paying generous strike benefits was less effective than hoped and turned out to be a financial sieve as well. As the strike dragged on, the monthly strike assessments became an onerous burden and a divisive issue within ALPA. Generally, pilots from airlines that were doing relatively well, such as United, Delta, and Northwest, paid their assessments. Pilots from troubled airlines, like TWA and Eastern, did not. Making up the shortfall strained ALPA’s financial resources tremendously and would lead to the creation of the Major Contingency Fund (MCF). ALPA’s leaders hoped the MCF, a kind of permanent strike assessment, would eventually eliminate the need for specific strike assessments and the internal strife they generated.

“Strike benefits at Continental were enormous, and we learned that we needed a special contingency fund, a war chest,” said Hank Duffy in his 1990 interview. “Before Continental, the cost of strikes had always been just strike benefits. But because of the bankruptcy aspects of Continental we drew down the equity on the building [ALPA’s Washington Office] and our financial reserves. Obviously, we couldn’t do that anymore.”

ALPA’s BOD, in an unusual June 1985 special meeting, would recommend creation of the MCF, to be financed by dues increases of 1 percent of each member’s income. The membership, finally convinced that deregulation and the turmoil it created in the industry warranted it, subsequently approved the MCF levy in August 1985 by mail ballot.

While a historian may see possible glimmers of success in several aspects of the Continental strike, for the pilots actually in the trenches, the view was a good deal murkier. The fall of MEC Chairman Larry Baxter provides a classic illustration. In mid-October 1983, as the Continental pilot group struggled to whip their strike effort into shape under crisis conditions, Baxter seemed to reach the limit of his endurance. The pressures on him were enormous. He had pursued a hard-line course of action with Lorenzo, and he had been wrong—Lorenzo wasn’t bluffing. JFK once said, “Victory has a thousand fathers, but defeat is an orphan.” The tragic result was that Baxter, father to this orphan, collapsed from exhaustion during a special Executive Committee meeting in Washington, D.C., where he had gone to present a strike budget for the national officers’ approval.

Continental’s MEC had no choice but to recall Baxter for what it believed were valid medical reasons. On October 13, in an emergency meeting at the Sheraton Hotel in Houston, the MEC replaced him with Dennis Higgins. The vote was unanimous.

“I was doing a little PR work, but I didn’t have a title,” Higgins remembers of the strike’s first days [no former TXI pilot had been elected to the new combined MEC, but Higgins was their unofficial “minister without portfolio”]. “I got a call at two o’clock in the morning; I was home in bed; they wanted me down at the Sheraton, said they’d wait till I got there. I walked in, and they said, ‘Larry’s been removed for very private reasons, and we want to elect you.’”

Baxter would recover shortly and challenge his removal. But his support on the MEC had been eroding even before the events that caused his colleagues to think his removal medically justified. Higgins’s sole demand as a condition for assuming the chairmanship was that Floyd Carpenter, the veteran TXI ALPA activist, have a seat on the Negotiating Committee.

Higgins’ first task was to put into concrete terms Lou Columbo’s “whatever it takes” pledge of September, which Baxter had resisted. Within 24 hours of taking over, Higgins had a proposal for $30 million in concessions approved by the MEC. But the turmoil on the MEC had unnerved a big batch of 110 shaky pilots, who crossed the line. This freshet of crossovers during the third week of the strike emboldened Lorenzo, who toughened his negotiating stance. So nothing came of the so-called “October Concessions.”

“Upon taking over the MEC, the bleeding from our own ranks slowed down, and I could focus on finding a process that would put us across the table from Frank and get us back to work,” Higgins declares. “I asked the leaders of other unions to jointly discuss a new negotiating initiative. I suggested we offer to return under the EWRs [emergency work rules] and at the 50 percent reduction in pay. We had to make a major jump like that. The other unions were unwilling, so I went ahead anyway.”

But Lorenzo, encouraged by the poor solidarity ALPA was displaying through the first half of October, stalled for time. Until the Continental strikers proved they weren’t going to totally collapse, Lorenzo would hang tough. ALPA would have to find another way to carry the war to him.

One promising avenue of attack proved to be a blind alley. Because Lorenzo’s scaled-down strike operation included some new, high-profile international flights, ALPA tried cashing in on its overseas connections with various labor groups. The idea was that militant British, Australian, and Japanese unions, in the spirit of international solidarity, would refuse to service Continental aircraft, perhaps even capture a B-747, jack it up, pull the wheels off, and turn it into a permanent ground monument. The AFL-CIO supplied a consultant named Ernie Lee, who was supposed to coordinate this overseas campaign against Lorenzo.

“That was a big fizzle,” Hank Duffy recalls sourly. “Lee made trips, accompanied by Continental pilots, to talk to all the unions. We were told that the Australians and British labor unions could do things for us. What you quickly find out is that you don’t ask people to do things you can’t do yourself. If we couldn’t shut the damn airplanes down in this country, why should we ask them to do it in their country? Lorenzo’s first airplane landed in Australia five minute early and departed three minutes early!”

For all its weaknesses and false starts, the Continental strike began to pinch Lorenzo once Dennis Higgins took command of the MEC. The surge of October crossovers ebbed and was not followed by any more “in-house” scabs in November. With the arrival of Captain Bob Kehs, the legendary “Dr. Strike” of Northwest’s many skirmishes with management, detailed by ALPA to supply technical and organizational know-how to the Continental pilots, their lines stiffened. Although plagued from beginning to end by a shortage of picket-line manpower, under Kehs’ expert tutelage (and, one must admit, a threat to cut off strike benefits), the Continental pilots bent to their unpleasant task, often joined by wives and children as they carried placards through airport terminals. They began mastering the arcane aspects of a strike, something other airline pilots in other days had done before them, not willingly, but with grim effectiveness.

Too grim, in some cases. Sporadic episodes of violence marked the strike: a bloody, decayed elk head tossed through a plate glass window of one crossover’s house; two Continental strikers, carried away by their fury, caught with a bomb they intended to plant in a scab’s garage (both later drew lengthy prison sentences); innumerable acts of petty harassment directed at nonstriking pilots. In short, the standard fare of labor strife, that ugly shadow that always emerges when livelihood and career come under threat—what old Dave Behncke once called “the heavy boot.”

The purpose of this increasingly efficient strike operation was to generate pressure for serious negotiations. As we have seen, fear that Lorenzo would run out of pilots before the end of October motivated him to talk, but he was also under court order to do so. With canny old Floyd Carpenter, veteran of many run-ins with Lorenzo at TXI, massaging every conceivable pressure point, the Continental negotiators did come up with a settlement Lorenzo would buy—sort of. In point of fact, these negotiations were heavily concessionary on ALPA’s part, little better than the EWRs Lorenzo had spelled out upon announcing his bankruptcy action.

During tense negotiations in late October, when Lorenzo still wasn’t sure he could staff his airline and while ALPA worried that the Continental strikers might continue to cross the picket line in large numbers, a compromise seemed to emerge. As a steady veteran of the Lorenzo Wars at TXI, new MEC Chairman Dennis Higgins was anxious to see these negotiations succeed, but he recognized the disastrous effect dashed hopes would have.

“How do you hold a pilot group together when it runs from emotional peak to valley?” Higgins asks rhetorically. “They would look at some event, like a court date, and attach great significance to it. When it didn’t work, they really hit bottom emotionally. I had to shallow these emotional swings out of the pilot group, to play down their expectations while looking for a negotiated solution. So, at the various crew bases, I started a series of meetings in which I told them, ‘Frank’s got us off the property and he’s not going to let us back unless we keep a steady hand.’”

By November, the Continental pilots’ negotiators seemed successful. But well aware of Lorenzo’s supple mind and devious abilities, Higgins remained wary—for good reasons.

“The company said it needed an additional $50 million in work-rule concessions,” Higgins recalls bitterly. “We gave them a proposal that met the $50 million, but the company said it didn’t. We told them to rewrite our proposal to where it met their $50 million, and we would accept it. They refused to rewrite it.”

The Continental pilots had thus all but surrendered, and they were under the impression that Lorenzo would settle once the technicalities in the “back to work” portion of the agreement were ironed out. From ALPA’s point of view, some of these technicalities involved serious concessions, among them Lorenzo’s insistence that about 100 “permanent replacement” strikebreakers hired “off the street” in November remain in place—seniority not withstanding. To this ALPA couldn’t formally agree, but that shouldn’t have scuttled the whole effort. Just as the National pilots would make life too unpleasant to bear for the post-1948–strike scabs they were forced to accept, so the Continental pilots would surely have been able to do the same. The National pilots had successfully handled a much larger group than the 100 scabs to whom Lorenzo had promised “permanent” jobs at that point. Perhaps Lorenzo knew this. So, in an episode similar to one he had played out against the TXI pilots in 1980, Lorenzo, backed off from a deal to which he had previously committed himself.

During this standoff over implementation of the back-to-work portion of the settlement, Lorenzo seems to have come to the conclusion that his accelerating hiring of ex-Braniff pilots would shortly allow him to win without further concessions. He appeared to enter a “take no prisoners” mode, just as Continental’s pilot negotiators, unaware of this development, rather naively believed they could resolve back-to-work differences through an arbitrator. UCLA Professor of Law Benjamin Aaron, who undertook this role in early November, would find himself on a fool’s errand.

Any arbitrator, as a prerequisite to bringing two bitterly divided positions into agreement, will insist that each side make concessions. By the time Aaron got the case, Continental’s pilot negotiators were only quibbling over implementation of the back-to-work agreement—they had beaten a heavy retreat on all economic questions. Lorenzo insisted that “work rules” had economic implications, and he demanded that the pilots accept totally the Emergency Work Rules, which largely dispensed with bidding and seniority rights. ALPA wanted to quibble—it would give up any work rules that had serious economic implications, but wanted to at least bargain about them. Lorenzo adopted an “all or nothing” position. By Thanksgiving, Professor Aaron admitted defeat and quit with a blast at Lorenzo.

“I required the parties to come to the table willing to make substantial changes in their demands,” Aaron declared. “The pilots’ union has met those demands and exceeded them. The company has shown a continued unwillingness to move from its position.”

So the strike moved into 1984, with both sides now awaiting the decision of the courts. Short of winning the economic contest outright, something ALPA had never been able to do during any previous strike, the judges and lawyers controlled the future. Eventually, Lorenzo would win on two fronts. A series of decisions by Judge R.F. Wheless between January and June 1984 found Lorenzo’s bankruptcy filing legitimate and not merely a dodge to void union collective bargaining agreements—decisions that flew in the face of Lorenzo’s public admission that he had a “labor problem,” not a “bankruptcy problem.” Saying that Lorenzo had made “reasonable efforts to negotiate a voluntary modification” of his labor contracts, Judge Wheless then allowed him to impose the Emergency Work Rules. ALPA immediately appealed Judge Wheless’s preliminary ruling in January, but before a higher court could hear it, the Bildisco Decision dealt ALPA a fatal blow.

In February 1984, by a single vote, the U.S. Supreme Court upheld the essence of the Houston court’s preliminary finding. For ALPA, the critical part of the Bildisco Case came in a closely divided 5–4 ruling that union contracts could be canceled even before a bankruptcy court ruled on that business’s request! This was, of course, exactly what Lorenzo had done and what ALPA had been contesting so vociferously in its appeals. Ultimately, ALPA’s campaign in Congress to overrule this aspect of the Bildiscoe Decision with new legislation would succeed, but too late for the Continental strikers. Even worse, the Bildisco Decision reversed a previous finding by the National Labor Relations Board (NLRB) that Bildisco had engaged in an “unfair labor practice” by canceling its union contracts unilaterally. ALPA had been counting on this NLRB finding to defeat Lorenzo.

The Bildisco Decision was an unmitigated disaster for ALPA, carried by five Republican justices appointed by Nixon and Reagan. The only two Democratic appointees remaining on the court, Justices Byron R. White and Thurgood Marshall, joined with moderate Republicans Harry Blackmun and William Brennan in dissent. Answering William Rehnquist’s opinion, these dissenters wrote: “The majority has completely ignored important policies that underlie the NLRB.”

Calling the Bildisco Decision a “puzzling misreading of congressional intent,” Chairman Peter Rodino of the House Judiciary Committee announced that he would begin immediate hearings on a law to overrule the Bildisco Decision. But the new legislation would be many months in coming, and useless to Continental’s striking pilots because it was not retroactive.

When Congress subsequently outlawed what the 5–4 Republican majority on the Supreme Court had done, ALPA won a victory of sorts, and Lorenzo’s action at Continental would stand as an isolated footnote to labor history. But the damage was done. Politics matters, because politicians determine who sits on the Supreme Court.

With the Bildisco Decision, the Continental strike was effectively lost.

“In hindsight, it’s easy to see that once Bildisco came down, the appeals process wasn’t going to lead anywhere,” admits Seth Rosen, director of ALPA’s Representation Department. “It would have been better calling the strike off right there, because it was a total victory in busting the union. Continental had no desire to negotiate at that point.”

A huge block of 300 Continental strikers crossed the picket line immediately after Bildisco. The Continental strikers had held their lines with virtually no crossovers for nearly five months, but Lorenzo had a large contingent of “out-house scabs” nearing the end of training, and something approaching panic set in as these post-Bildiscoe crossovers saw their jobs disappearing forever.

Among the 600 “in-house scabs” who crossed during the strike, there was a vast difference between these post-Bildisco scabs, who crossed after the fight was lost, and the “October scabs,” whose early betrayal was so crucial.

“I supported the strike like a good union member for six months,” says former ALPA LEC member Captain Jim Minor, still anguished at finally crossing the picket line. “Going back to work for Frank Lorenzo, the guy who ruined my career, was the single most traumatic event of my life, and that includes both my divorces. But we were told that he didn’t have the legal right to void our contract. Well, the courts said differently. What was I supposed to do, after all those years of beating the ice off the wings of a DC-3, trying to make it to the next stop, trying to build an airline? Go to work for Southwest and pull gear for some guy half my age for $18,000 a year? Or take the forty-three grand Lorenzo was offering?”

Captain Don Henderson, the ex-Navy pilot who is currently ALPA’s “custodian” on Continental, says sadly of these late crossovers: “Many of the old Continental pilots will now admit privately that they made a mistake, that the company lied to them when they made the decision to get in bed with the company. But once they made it, they had to live with it.”

By June 1984, an accumulation of adverse court decisions meant that ALPA would, realistically, have to pull down the Continental strike on unsatisfactory grounds at some point. Although the die-hard Continental strikers, by now engaged in a “holy war” against Lorenzo (much like their brethren at Eastern later), continued to do their utmost, the only effective means at their disposal was the deeply abhorrent one of making total war on the airline itself. By pressuring travel agents not to sell Continental tickets (a critical factor in Braniff’s demise), Continental’s striking pilots, if they succeeded, stood to destroy the very airline they had spent their lives building.

So ALPA would have to retreat, but until a way could be found, Continental’s strikers would soldier on, pursuing a variety of stratagems. ALPA’s “corporate campaign,” designed to pressure Lorenzo both morally and financially through pleas to lenders and vendors, found little support among Lorenzo’s fellow CEOs. The 1980s, with the “Reagan Revolution” at floodtide, proved unreceptive to concepts like “fairness” and “corporate responsibility.”

ALPA’s challenge to the safety of Continental’s scab-ridden operation was another matter, however. With an inexperienced pilot force, incidents multiplied. By December 1983, ALPA had already documented almost daily infractions, ranging from busted altitude assignments to inadequate crew rest. On Nov. 9, 1983, a DC-9 with Lorenzo himself aboard landed on a taxiway at Denver. In February 1984, a hard landing resulted in aircraft damage that went unreported until non-Continental ground personnel finally noticed wrinkled skin. Meanwhile the aircraft continued in line operations for three days!

ALPA tried mightily to interest the news media and the FAA in these safety violations. In April 1984, CBS’s 60 Minutes ran a program on them, but the FAA regarded these charges as merely “union stuff” and resisted becoming involved. Expressing deep frustration with FAA Administrator Donald Engen, Hank Duffy told congressional investigators in June 1984, that federal officials were ignoring ALPA’s reports of safety violations and actively favoring Lorenzo. In one midair near-miss incident, ALPA’s Director of Accident Investigation Harold Marthinsen provided the FAA with ATC tapes that the FAA later erased! It was just an inadvertently hasty “recycling of tapes,” Engen explained.

In June 1984, Hank Duffy presented congressional investigators with a detailed list of 152 similar safety violations committed by Continental during the strike and cited the FAA as a “classic example of an agency that either can’t or won’t do its job.” Stung by congressional criticism following ALPA’s complaints, the FAA launched an investigation of Continental, which ultimately cleared it. “Continental continues to provide safe service,” Engen said publicly.1

One small episode in the strike deserves mention. Under the leadership of Paul Eckel, the Continental management pilot who had tried to prevent Lorenzo’s takeover with an employee stock ownership plan (ESOP), a group of striking Continental pilots started their own airline, Pride Air, to compete on selected routes with Continental.

Pride Air was vaguely reminiscent of the Southern Airways pilots’ 1961 attempt to fly their own “strike airline,” which they called Superior Airlines. The difference between the two airlines—Superior and Pride—was that ALPA got financially involved in Superior, whereas Pride came mostly out of the Continental pilots’ own pockets, primarily their pension funds. Superior was a financial quagmire that taught ALPA a lesson. The Continental pilots who invested in Pride should have paid attention to history—they lost everything.

How then, did the strike finally end? Lorenzo had won all the economic and legal battles to this point and had no incentive to negotiate. Only the bankruptcy court’s order that he do so perpetuated desultory negotiations.

“In fact, the guy across the table told me, ‘We’re not here to do anything but play games,’” recalls Seth Rosen. “‘But you can’t say that as a matter of record, or I will deny it.’”

By August 1985, Continental had a full complement of 1,600 pilots, 1,000 “permanent replacements” hired after the strike began and 600 who had crossed picket lines—its full prestrike strength. About 1,000 ALPA loyalists remained on strike, with approximately 400 others either having found jobs elsewhere or retired. Their last connection with Continental was the prestrike ALPA contract, which still retained legal standing in the bankruptcy court.

Then Lorenzo outsmarted himself—finally.

On Aug. 26, 1985, Lorenzo moved to terminate the ALPA contract. Declaring that Continental’s original acceptance of ALPA as the collective bargaining agent for its pilots was “voluntary” and had never been certified by a formal vote, Lorenzo announced that he was withdrawing the recognition. With 1,400 of his pilots having signed a petition requesting it, Lorenzo declared that a majority of all his pilots, even if the 1,000 strikers were included in the total, favored decertification of ALPA. He then unilaterally broke off the court-ordered negotiations, which had been sputtering on ineffectually.

At this point, cocky and overconfident, riding the crest of dozens of puff pieces in the business press describing him as “the wonderboy who took on the unions and won” and “the man who proved deregulation would work,” Lorenzo stubbed his toe. Notwithstanding that Bob Six had “voluntarily” accepted ALPA as the bargaining agent for Continental pilots back in 1942, Lorenzo could not unilaterally withdraw that recognition.

Established precedent in NLRB case law required a formal, supervised ballot—not the informal ballot Lorenzo announced. Having gotten away with canceling the wage and working conditions portion of the ALPA contract, Lorenzo figured the bankruptcy court would now permit total cancellation of the entire contract under the same rationale, and without going through the formal decertification process.

So without waiting for the bankruptcy court to rule on his high-handed action, Lorenzo announced an expansion of Continental’s flight schedule. Ironically, Lorenzo had been so successful at breaking the strike that he now needed more pilots. On Sept. 9, 1985, thinking ALPA’s legal challenge to his decertification would fail, Lorenzo announced a “vacancy bid” for nearly 500 captain and first officer positions, plus the hiring of an undetermined number of second officers “off the street.” Lorenzo believed his “decertification” of ALPA meant that striking pilots would have no standing to bid for these positions.

One final crisis now loomed for the Continental MEC. While ALPA tried to persuade the bankruptcy court of the illegality of Lorenzo’s decertification, the leaders of Continental’s pilot group would get one last grab for a very tarnished brass ring. Reluctantly, under severe prodding by ALPA’s outside legal counsel Bruce Simon, they agreed to submit bids for these new “vacant” pilot positions.

“It was two o’clock in the morning, and we were read the riot act by Bruce Simon, who told us it’s going downhill from here,” Vice-Chairman Pete Lappin recalls of the MEC meeting. “Most of us didn’t want to call off the strike for anything less than total victory. But we were losing people to suicide! Simon persuaded me that we had to swallow this piece of shit, save some jobs and some lives.”

Lorenzo promptly filed a petition with the court stating that the strikers were “not entitled to any of the bid vacancies under any circumstances,” because all of them had already been awarded to “permanent replacements.” The federal bankruptcy court thought otherwise.

On Oct. 31, 1985, Judge Roberts entered an “Order and Award” (O&A) of the bankruptcy court imposing a settlement on Lorenzo. Often denounced as the “Surrender Agreement” by militant Continental strikers, the O&A was, in fact, far better. Describing his O&A as a “global settlement,” Judge Roberts required that Lorenzo offer his pilots three options, ranging from reinstatement in order of seniority (according to a complicated formula) to severance pay of $4,000 for each year of service. Pilots who wished to retain their right to litigate further would also be reinstated, but only after all pilots who waived that right. Although not all former Continental captains moved immediately into the left seat, Lorenzo had to guarantee a substantial number of them captain’s pay anyway.

Within a year of the O&A, most Continental strikers were back in their cockpits—but not all. Guy Casey, Dennis Higgins, Dennis Duffy, Larry Baxter, Pete Lappin, to name but a few, did not appear on Continental’s seniority list. From the beginning, Lorenzo privately made it clear that he would never accept pilots who had played a leadership role in the strike.

Poststrike harassment is nothing new in ALPA’s history, but the subtlety of Lorenzo’s campaign set a new standard. His primary weapon was the polygraph machine, or “lie detector,” a device premised upon the unscientific notion that lying triggers certain physiological changes in fibbers. Lorenzo used these contraptions on Continental’s strike leaders in conjunction with legal depositions designed to ferret out knowledge of illegal acts committed during the strike. Although not admissible as evidence during a trial, the Texas bankruptcy court permitted Lorenzo to use them internally—a decision ALPA challenged unsuccessfully.

Armed with polygraph results, Lorenzo set out to make life difficult for Continental’s strike leaders during requalification.

“There were about a dozen individuals who were very active, vocal, and visible during the strike that the company didn’t want back under any circumstances,” says Kirby Schnell, who now works for the FAA. “Ed Nash [one of the few strike leaders who currently flies for Continental] is probably still looking over his shoulder, and that is nothing derogatory about Ed.”

“On days off, the company kept wanting Pete Lappin and me to submit to polygraph tests,” says Guy Casey, who finally found the harassment too much and went to work for United. “Then they said I had a heart problem, and I had to take a bunch of tests at my own expense—they showed I didn’t.”

One by one, all the principal strike leaders, when questioned about poststrike harassment, ask to “go off the tape.” They can’t prove what they say, and they know how litigious Lorenzo can still be. So they choose words carefully. But in every instance, they insist that they were privately warned by old friends in management (of which, surprisingly, there were more than a few) not to come back, that they would never make it through training. Save yourself the trouble, they were told, take “Option III,” the $4,000 per year severance pay, and run. Most did.

“Frank hates me, so I never considered going back,” says Dennis Higgins, whose consistent geniality masked the gut-fighter he had proven himself to be. Short and muscular, with a ready smile and disarming manner, Higgins built a nonflying career in labor relations after the strike.

“Without a union contract, when they get down on a guy and decide he’s not going to make it on his simulator rides, there is no recourse,” Higgins says. “Don Henderson [MEC secretary-treasurer during the strike and later ALPA “custodian” on Continental] is an exception, but he didn’t have a real public role in the strike. I would have been a major target.”

Finally, one sad footnote. A few Continental strikers retained their right to sue under the O&A. A flurry of lawsuits resulted. Lorenzo won every single one. In their despair, they turned on ALPA itself, filing a “Failure of Duty of Fair Representation” lawsuit, which alleged that ALPA’s acceptance of the O&A was a betrayal. In early 1991, the U.S. Supreme Court threw out their lawsuit and exonerated ALPA.

The Continental strike was finally over.

NOTE
1 This episode provided an eerie foreshadowing of the celebrated ValuJet crash in May 1996, which brought the FAA’s safety failures into bold relief—finally.

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