ALPA Merger Policy
How does joining ALPA protect us in the event of a merger with another airline?
The majority of the potential airlines that could partner with American Airlines have their pilots represented by ALPA. Rejoining ALPA would place AA pilots on a level playing field and provide equal status under ALPA’s Merger Policy. AA pilots would have real representation and an effective voice for our pilot group in any merger, whether the merger was with a future ALPA or non-ALPA pilot group airline; the right to hire professionals and lawyers that AA pilots select and direct to represent our interests; the right to negotiate, mediate, and, if necessary, arbitrate the final list with well-known neutral arbitrators in any merger with another ALPA pilot group; and ALPA professionals’ support and representation in a merger with a non-ALPA carrier.
What is ALPA Merger Policy?
ALPA’s Merger Policy was adopted, and has been amended, by ALPA’s Executive Board. The Executive Board is one of the Association’s highest governing bodies and is comprised of all the MEC Chairmen from all ALPA pilot groups. ALPA’s Merger Policy is designed to provide pilots with the tools, process, and flexibility needed to integrate seniority lists and collective bargaining agreements fairly and equitably. The intent of ALPA Merger Policy is to make sure pilots share in the synergies and benefits (and not just the familiar risks) of corporate transactions.
ALPA Merger Policy recognizes that ALPA-represented pilots are best served by negotiating and coming to agreement with their ALPA brothers and sisters at other carriers on procedures to integrate seniority lists and collective bargaining agreements. However, should ALPA pilot groups not be able to reach such agreement on these important but difficult issues, the Merger Policy provides a fair and equitable procedure for mediation and neutral arbitration of such disputes.
ALPA’s Merger Policy places special emphasis on pilots obtaining stability and economic benefit from an integration as soon as possible by requiring negotiation of a Joint Collective Bargaining Agreement. The most crucial aspect of ALPA Merger Policy is its requirement of complete autonomy for a pilot group, with strict neutrality on the part of ALPA International with respect to integration of the seniority lists. Under ALPA Merger Policy, there is no involvement by the company in the seniority list integration process of ALPA-to-ALPA mergers.
In any merger scenario, ALPA Merger Policy provides for the hiring and directing of a pilot group’s own merger attorneys and other professionals and the appointment of their fellow pilots as their official merger representatives, whose sole focus and duty is to the protection of that particular pilot group’s seniority and other interests in a transaction. ALPA Merger Policy also directs each MEC pay for its own merger expenses from its MEC account. A special assessment for merger expenses may be necessary to cover germane expenses. Should an airline be significantly smaller than the other merging carrier, ALPA merger policy allows the smaller MEC to apply for financial assistance from the ALPA President to ensure those pilots receive comparable legal representation during the merger process. In any ALPA to non-ALPA merger, the full resources of ALPA are made available to support the merging ALPA pilots to help protect their seniority and career expectation rights.
How is ALPA Merger Policy applied in practice?
Every merger of pilot groups is different. But regardless of the circumstances, every ALPA pilot group is guaranteed the right to its own legal representation that answers only to that pilot group and, in a merger between ALPA carriers, a process of negotiation and, if necessary, neutral arbitration completely free of company involvement.
ALPA Merger Policy identifies three of the factors – career expectations, longevity, and status and category – “to be considered in constructing a fair and equitable integrated seniority list, in no particular order and with no particular weight.” Pilot negotiators or arbitrators may assign whatever weight they consider appropriate to each of these factors and may consider any other factors deemed relevant as well.
ALPA Merger Policy does not guarantee an outcome that pleases everyone—no procedure is capable of that. However, ALPA’s policy does ensure a process intended to be fundamentally fair and equitable, giving every participating pilot group a seat at the table and a voice in their future.
Do ALPA contracts contain job security protections in a merger?
In addition to the pilot-controlled seniority integration procedures provided by ALPA Merger Policy, ALPA-negotiated collective bargaining agreements typically contain important, legally enforceable job security protections that ensure pilots are not at the mercy of the merged corporation, such as requirements that the integrity of current operations be maintained until there is an integrated list, and other essential contract and seniority list integration requirements.
ALPA contracts also often contain protections against an ‘acquisition-without-operational-merger’ scenario. For example, were another carrier acquire AA’s assets but not merge the two operations, the transaction would not necessarily be a “covered transaction” under McCaskill-Bond, and the pilots might not be entitled to mandatory negotiation and arbitration of seniority lists under that statute. Such separate, parallel operations pose a direct threat to pilots’ careers, as management engages in whipsawing or even the whittling away, abandonment, or sale of aircraft or other assets. To protect against such a scenario, ALPA contracts often contain a requirement, as a condition of any asset sale, the surviving carrier will effect a merger of operations ensuring McCaskill-Bond’s mandatory procedures apply, and affected pilots be allowed to protect their jobs by following the acquired aircraft, routes, or other assets to the acquirer. ALPA contracts typically contain many more job security protections, including imposing employment obligations upon any successor carrier and prohibiting alter ego operations.
What is the McCaskill-Bond law?
The McCaskill-Bond statute was signed into law in late 2007. Unlike ALPA Merger Policy, it does not address integration of labor agreements and addresses seniority list integration only. The law applies to any transactions involving a (1) sale or acquisition of 50% or more of the value of a carrier by another carrier and (2) a combination of separate employee groups into a new, combined carrier employee group (also known as a single carrier transaction). If the prerequisites are met, the law requires that seniority lists of the previously separate groups be combined in a fair and equitable procedure pursuant to the Allegheny-Mohawk Labor Protective Provisions (“LPPs”), Sections 3 and 13. Those provisions require negotiation and, if necessary, arbitration of the seniority list issue. Under this law, the participants in the negotiation/arbitration process would be the affected pilot groups and the carrier or carriers involved.
Under McCaskill-Bond, if the merger involves employee groups represented by the same union, the statute provides the union’s internal merger policies apply exclusively, which in the case of a merger of two ALPA-represented groups means ALPA Merger Policy would exclusively govern, with no involvement from the respective carriers’ managements.
If we merge with another airline and we were both ALPA, it would be date of hire seniority integration, right?
No, that is a common misconception. ALPA merger policy is not date of hire.
Does that include a merger with our wholly owned regionals?
Yes it does, were that to ever occur.
What about Endeavor and Delta merging?
Contrary to popular belief, Delta and Endeavor are not merging. What they are doing is working collaboratively and more closely to ensure Delta has a steady pool of qualified pilots from which to draw from.
I hear we would be better off as an independent union than under ALPA if we were to merge with another airline. Is this true?
Okay, so let’s keep this simple as possible and stipulate that a proposed merger has survived legal challenges either by private parties such as labor unions or government agencies, if any, and the National Mediation Board has determined a single carrier exists. McCaskill-Bond, which covers integration between different unions, and ALPA merger policy are not effectively different at the end of each process. The net effect is that the parties would engage in direct negotiations, possible mediation and finally binding arbitration. The standard(s) the arbitrator(s) are required to follow share one factor but ALPA Merger Policy is slightly more expansive.
ALPA Merger Policy contains more structure in terms of timelines and process and encourages the parties to reach a consensual agreement. Should the parties be unable to reach a consensual agreement, the policy contains provisions considered by an arbitrator(s) resulting in a “fair and equitable” integrated seniority list. These provisions include but are not limited to “career expectations, longevity, and status and category in no particular order and with no particular weight.” ALPA Merger Policy mandates that airline merger representatives as well as mediators, and arbitrators must consider these provisions when determining an integrated seniority list. They are, however, also free to consider other issues they deem appropriate.
McCaskill-Bond, by contrast, only suggests a “fair and equitable” seniority list integration. Moreover, and almost more importantly, management is allowed a seat at the table for a seniority integration under McCaskill-Bond and could weigh in during an arbitration. Think about that…
So again, does this mean that ALPA merger policy is not strictly “date of hire?"
Yes. That is correct. ALPA Merger Policy contemplates “longevity” but does not prescribe strict “date of hire” as the only standard that must be applied.
So what you are saying is that in the end, either via our contract or federal law, we likely end up in binding arbitration. Is that correct?
Yes, that is correct.
Well, I still think we are better going at it on our own. We can make any argument we want to the arbitrator.
Yes, that’s true. We could make any argument we want in front the arbitrator(s). But under McCaskill-Bond, the arbitrator is bound by “fair and equitable” only as the standard. That is extremely broad, subjective and could result in a less than favorable award that may well be upheld by the court systems in the event of a legal challenge. ALPA Merger Policy mandates that the parties to the seniority integration process follow the aforementioned provisions at a minimum. This, while speculation, would arguably result in a seniority integration more palatable to the merging plots.
How is the ALPA BOD different from the APA BOD?
APA’s BOD is different from the ALPA BOD in that the ALPA BOD makes strategic, constitutional, and policy decisions for multiple member airlines. ALPA's BOD meets once every two years. The equivalent of the APA BOD under ALPA is an airline’s MEC, and each MEC has the ability to set their own “battle rhythm” with respect to meetings.
In military terms, think of ALPA National as the Pentagon, each airline MEC as a separate COCOM, and each LEC as a Wing, Group, or Battalion. The biggest difference from the military, though, is that ALPA is a “bottom-up” organization and a representative democracy rather than a military chain of command. At the end of the day, the “civilian control” originates from the membership’s duly-elected local status reps that make up the ALPA BOD. The ALPA BOD (consisting of every local status rep under ALPA) sets the strategic priorities for “ALPA National” to follow rather than the reverse, which is a common misconception from those pilots leaving the military.
What exactly does ALPA National do?
ALPA National sets the strategic direction for the piloting profession, both internally and externally.
Internally, this involves: constitution and by-laws creation, maintenance, and enforcement; shepherding of pooled staff resources, such as strategic communications, economic & financial analysis, legal representation, and engineering & air safety; addressing internal ALPA policies, such as ALPA’s Merger & Fragmentation Policy.
Externally, this primarily involves ALPA’s voice in Washington and it’s affiliation with the AFL-CIO. This includes: lobbying our legislative branch; interfacing with and providing expertise to regulators, such as the FAA; maintaining open lines of communication with the White House and Sec of Transportation.
If we rejoin ALPA, then will ALPA National tell our airline what we can and cannot do?
This is a very common misconception. As long as decisions fall within the bounds of ALPA's Constitution & By-Laws, then each ALPA pilot group has the freedom to set the direction that makes sense for them. As discussed above, ALPA National primarily sets the strategic direction for the profession and provides a large set of professional tools to its member pilot groups to accomplish their desired goals.
ALPA’s BOD consists of every single elected local status rep under ALPA, similar to the House of Representatives. This body elects the ALPA National officers and is the ultimate authority over ALPA’s C&B and policy decisions.
ALPA’s Executive Board consists of all member airline MEC chairs (equivalent of APA President) who create the strategic plan based on the BOD’s strategic priorities. They carry the voice of their respective airline’s MECs, which means each member airline is always represented at these semi-annual meetings.
ALPA’s Executive Council consists of all national officers (President and three Vice Presidents) and all ALPA executive Vice Presidents. This body simply executes on strategy. They can initiate suggestions to the Executive Board or ALPA BOD, but they cannot change the course of the union without direct membership input through their respective status reps or MEC chairs.
Negotiations at APA vs. ALPA
Do ALPA carriers have the equivalent of APA's President? If so, what is that person's function in the negotiating process?
Yes. Each airline has a Master Executive Council, or MEC, (equivalent to APA's BOD) and an MEC Chairman (equivalent to APA's President). Per ALPA's Constitution and Bylaws, the MEC Chairman is an ex officio member of the Negotiating Committee, which means that the MEC Chairman has the ability to influence the negotiating process and acts as a direct liaison between the MEC, the Negotiating Committee, and, at times, the senior management team at an ALPA member’s airline. A final agreement is always subject to MEC approval and generally is ratified by the membership. There is a lot more to unpack with these positions, and we will address major differences in governance at ALPA vs. APA in future articles.
APA has a Department of Negotiations that helps set strategy for negotiations with several full-time lawyers who are professional negotiators. What is different about ALPA's Department of Representation that improves an ALPA carrier's negotiating position?
Under ALPA, each member airline has its own Contract Administrator, which is the equivalent of the attorney running APA's Department of Negotiations. The Contract Administrator is intimately familiar with the ALPA member airline’s collective bargaining agreement. They guide the bargaining process through negotiations and modifications of the CBA, and they also enforce the contract. At ALPA National under the Department of Representation, there are a couple more layers of labor attorneys that step in to add horsepower to any negotiating process when needed. They also bring a wealth of experience with the RLA from numerous Section 6 processes at multiple carriers to help provide sage guidance to a pilot group and each MEC's Contract Administrator.
We have contacts at DAL and UAL's MECs and Negotiating Committees that brief us on all their big picture strategy. How would joining ALPA improve that situation? Isn't that pattern bargaining?
We can do more as a member of ALPA. While all airline unions strive to advance the profession, an occasional briefing from ALPA's Department of Representation or Economic & Financial Analysis Department (E&FA) does not equal the access of having those resources at all times. Our negotiating goals as a pilot group will remain the same, but we are now part of a larger group that brings more negotiating power for every ALPA member airline.
Merging with ALPA brings us true pattern bargaining as opposed to our current episodic bargaining strategy. When we join ALPA our pilot group will bring resources, perspective, and information that ALPA currently does not have at their fingertips. In exchange, the pilots of AA receive immediate access to every strategic resource ALPA can provide, to include its Representation and E&FA Departments. In other words, both sides gain negotiating resources out of a merger of the AA pilot group into ALPA. That is the true value of being part of an international trade union.
We poll and survey the membership routinely to figure out membership priorities, and the BOD produces Tasking Orders based on that membership input. How is ALPA's process substantially different?
ALPA places a very high value on membership engagement, polling, and surveying to determine the direction the membership wants to give their MEC. While APA does poll and survey, the frequent turnover of representatives combined with the dissolution of the APA Negotiating Committee every Fall leads to a substantial loss of institutional memory at APA's Headquarters. This leads to a much less resilient negotiating strategy that is typically at the mercy of the most recent political issues within APA.
By contrast, ALPA's National Bargaining Committee provides a compass back to the original negotiating priorities when new representatives are voted into office. When combined with the annual Representational Leadership Training that all newly-elected representatives must attend after election, the resources at ALPA National help ensure that negotiating positions at ALPA carriers are built to withstand the scrutiny of the National Mediation Board and judiciary when negotiations become more contentious.
If an MEC is setting priorities for the Negotiating Committee to bargain with the company, then how is ALPA's process any different from APA's process of the APA BOD providing Tasking Orders to the Negotiating Committee?
ALPA provides Elected Officer Training for its newly-elected representatives and officers on an annual basis to give elected leadership exposure to all the tools ALPA National has at its disposal and to provide a crash course on the Railway Labor Act's (RLA) limitations and benefits to labor. This helps to expand an elected leader's aperture to understand what tools are and are not available to them through the negotiating process.
Additionally, since each airline's MEC's Officers (equivalent to the APA President, Vice President, and Secretary/Treasurer) are elected by each airline's MEC (equivalent of the APA's BOD), more authority and autonomy is typically given to Negotiating Committees to bargain based on the initial strategic input from the MEC.
We have our own Economic & Financial Analysis Committee now. What makes ALPA's E&FA Department better?
APA's E&FA Committee is relatively new and currently consists of two to three pilot volunteers with a wealth of previous finance experience along with an outside consultant who could retire or have their service agreement terminated by the APA BOD at any time. Additionally, like any other pilot volunteer position, the pilots working at E&FA could lose or resign their positions at any time for a litany of reasons, from personal to political. If that were to happen, then APA would likely have to rebuild its capability again from scratch. Additionally, the committee is only working on current American Airlines pilot group issues, so their aperture and toolkit for quickly valuing proposals is more limited than ALPA's E&FA Department.
By contrast, ALPA's E&FA Department consists of a staff of 14 finance professionals who have a reputation with most airline management teams for providing accurate and objective costing and valuations for contracts. ALPA can provide additional analysts to a project for a member airline where needed. Many management teams have actually used ALPA E&FA’s inputs to improve their labor finance team's approach to costs due to faulty assumptions. They are always in multiple Section 6 processes at different airlines, which gives these professionals a lot of opportunities to keep their financial knives ready for the negotiating process on short notice.
Should the normally assigned analyst be unavailable during a negotiating session due to other obligations at ALPA (e.g., being a witness at an arbitration), another analyst who is already up to speed will step in and guide the negotiating session. Think of it this way: you wouldn’t take an airplane with no alternate or reserve fuel. ALPA’s E&FA Department provides fuel reserves, an alternate, and a crewed spare aircraft for the very critical task of quickly and credibly valuing contractual proposals.
You mentioned that ALPA tries to strategically position amendable dates to improve pilot contracts that are below industry standard. Does that mean ALPA will dictate our negotiating priorities and when we can have a contract?
No. Think of each ALPA member airline as an independent franchise of ALPA. ALPA provides resources and advice to each franchise, but each franchise is free to make its own decisions.
Will ALPA National not permit us to sign a contract?
No. Each MEC ultimately makes its own decisions after receiving counsel from ALPA's resources. The ALPA President must sign the agreement for it to be binding. That contract is presented to the ALPA President after having been sent to the membership for ratification.
This all fine but we could negotiate the best contract in the world and the company violates it left and right. We never have arbitrations to enforce our contract. So what’s the difference?
Some ALPA contracts actually have prescribed arbitration dates that are used to definitively resolve grievances between contract amendments. We will discuss the differences between ALPA’s and APA’s handling of grievances and arbitrations in a future article.