Judge James Zagel of the U.S. District Court in Chicago on May 26 deferred ruling on the machinists union's request for a temporary restraining order to preclude United from interfering with a strike, said IAM spokesman Joseph Tiberi. He said the union has maintained the right to strike, but requested the temporary restraining order because of public statements issued by the airline.
Mr. Tiberi said the machinists union submitted a "comprehensive proposal" to the airline late on May 26 and could still go on strike if the bankruptcy court on May 31 terminates their contract. As part of its proposal, the machinists union is seeking to become part of the multiemployer $6.4 billion IAM National Pension Fund.
United officials believe a strike would be illegal, according to United spokeswoman Jean Medina. "We also believe our employees understand that a strike would only punish our customers and our employees," she said.
Ms. Medina said United officials "expect to be negotiating a replacement pension plan" with the flight attendants union, but she did not provide a timetable. She said the carrier has a ratified agreement with the flight attendants, aside from the issue, and members of the mechanics union are currently voting on a proposed tentative pact.
Ms. Nelson Dela Cruz said United flight attendants union members remain prepared to strike if their pension plan is terminated.
The bankruptcy court earlier in the year approved United's new labor agreements with the Air Lines Pilots Association, the Professional Airline Flight Control Association and Transport Workers Union of America. Those groups agreed not to oppose termination of their pension plans.
Attorneys for the airline's flight attendants union, the United Master Executive Council of the Association of Flight Attendants-CWA, AFL-CIO, Rosemont, Ill., filed papers with the bankruptcy court May 18 stating the union will appeal the court's decision on the PBGC agreement. That same day, the flight attendants union filed a motion asking the bankruptcy court to preclude the PBGC from taking over United's pension plans until the union's appeal goes before the U.S. District Court in Chicago.
Attorneys for the flight attendants filed similar papers with the U.S. District Court in Washington, asking for a preliminary injunction to halt United's agreement with the PBGC. Ms. Nelson Dela Cruz said a hearing on the preliminary injunction is slated for June 3.
United on May 25 filed an objection in bankruptcy court in Chicago opposing the stay request. The objection said "it is highly unlikely that this court's decision will be reversed on appeal" and the flight attendants' "motion for a stay should be denied." The PBGC on May 25 joined in the airline's objection.
The machinists, racing against the clock to hash out a new contract with United before an interim pact expires, filed papers with the Chicago bankruptcy court May 20 stating the union's intent to appeal United's approved pact with the PBGC. The IAM on May 25 also filed a statement in bankruptcy court supporting the flight attendants' request to stay the termination of the pension plans.
Amid workers' discontent, Rep. George Miller, D-Calif., on May 18 asked PBGC Executive Director Bradley Belt to hold off taking over the United Airlines' underfunded pension plans for six months pending an independent analysis of the airline's ability to financially support the plans, and to give Congress time to consider pension reform legislation. Jeffrey Speicher, PBGC spokesman, said the agency had no comment on Mr. Miller's appeal.
Ms. Medina said the airline's agreement with the PBGC "is critical to the future of United as it strengthens the financial platform this company needs to attract exit financing and compete effectively." Company officials "recognize that termination and replacement of United's defined benefit pension plans is difficult" for the carrier's employees and retirees, "who have been doing extraordinary work throughout this restructuring," she said. Mr. Miller's request does nothing to help the airline's employees, customers or United as a whole, she added.