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America West Merger Committee Update April 10, 2015

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Your West Merger Committee has been busy at work over the past several weeks working diligently on the following tasks:

1. Procuring employment and seniority data. Pursuant to the terms of the Protocol Agreement, once the West Merger Committee was officially granted party status by the Preliminary Arbitration panel, we were entitled to all seniority data that the company had provided the other committees, as well as all of the seniority data that the other committees have exchanged between themselves to date. The other parties have made the required disclosures, and the amount of information was quite voluminous.

2. Producing a certified seniority list. Each committee is required to produce a certified seniority list of the pilots it represents, and each certified list will serve as the basis of that committee's seniority integration proposal. The Protocol Agreement requires that [t]he certified seniority lists will reflect the status quo of the three seniority lists in effect at the carriers on December 9, 2013 (i.e., American, US Airways (East), US Airways (West)); provided, that "this will be without prejudice to any Merger Committee's position on the appropriate snapshot or constructive notice date. What this means, simply, is that the parties have agreed upon a baseline date for the seniority data for purposes of uniformity, but that baseline date in no way requires or foreshadows any particular sort of integration methodology. Seniority list certification involves manually comparing the various sets of employment data, both past and present, to ensure its accuracy. At the time of this update, the list certification process is nearly completed, and it is anticipated that the parties will be able to exchange certified lists shortly.

 

 

3. Preparing for arbitration. Our legal team has been busy with a number of tasks related to preparing for the seniority integration arbitration commencing June 29, including: developing and refining strategy, working with the other committees attorneys and the arbitrators to finalize procedural ground rules for the hearings, and working closely with the committee to procure and prepare evidence and witnesses. Additionally, we have procured various experts to assist with analysis and potentially testify in the arbitration. Most notably, we have retained airline economist Dan Aikens. As many of you already know, Dan was a critical component of our America West Merger Committee under ALPA, and the Nicolau Award was substantially influenced by his analysis (the PEM Pilot Earnings Model ). Dan has subsequently worked with Jeff Freund and his legal team in both the Delta / Northwest and the United / Continental seniority integrations. We are pleased to have Dan working on behalf of the America West pilots again.

NEXT STEPS

Just over twelve weeks remain until the seniority integration arbitration hearings begin. During that time, the three merger committees will exchange certified lists, lodge appropriate objections to each list, if necessary, as well as discuss and resolve as many issues as possible prior to the arbitration date. In addition to integration methodology, the committees will also discuss and attempt to reach agreement upon a number of other issues, including: constructive notice date, snapshot date, methodology for determining longevity, and methodology for determining the actual number of pilots from the two airlines for each category and status (e.g. 757 Captain, A320 First Officer, etc.). The merger committees will attempt to reach consensus on as many issues as possible in the next few months, so as to minimize the number of issues that will ultimately be presented to the arbitration panel for resolution. We will keep you apprised of the status of these discussions.

THE LMRDA LAWSUIT

As you are aware, three West pilots recently filed a lawsuit in federal court in North Carolina against several USAPA principals. Click here to read the recent Leonidas LLC update announcing and explaining the lawsuit. The lawsuit is extremely relevant and important to your Merger Committee.

USAPA, during its tenure as lawful bargaining agent, collected dues as a condition of employment from all East and West pilots, and also initiated a merger assessment that required all US Airways pilots, East and West, to contribute additional monies to a fund to be used solely for the purposes of seniority integration. Of course, since that time,

 

USAPA lost its status as bargaining agent, and has also lost its ability to represent West pilots in the seniority integration process. Despite this, USAPA apparently believes that it is still entitled to use pilot dues and assessment dollars including dues and assessments collected from West pilots - to fund its merger committee, instead of properly returning those unspent dollars to the pilots individually. While we believe the USAPA principals are aware of this legal and ethical duty, as is usually the case, they simply will not comply with those legal obligations without a court order requiring them to do so.

The grounds available to the plaintiffs in that case are substantially different than what has been available to West pilots previously. This lawsuit is brought under a federal law (the Labor Management Reporting and Disclosure Act of 1959 or LMRDA ) that was enacted to prevent union officers from spending union money improperly particularly when doing so advances those union officers personal interests. The law on that subject is not as deferential to union officers decisions as is the case with the Duty of Fair Representation claims. In fact, as it pertains to the use of union dues and assessments, the LMRDA provides that union principals can be held personally liable for misuse of union funds, and gives federal judges broad discretion to award attorneys' fees against them.

In sum, the LMRDA lawsuit seeks to recover YOUR merger fund from those who would like to retain it for purpose of using it against you. We encourage you to provide this lawsuit your attention, as well as moral and financial support.

As always, we encourage you to contact us with your questions and feedback. We look forward to communicating with you again in the very near future.

Sincerely,
The West Merger Committee

David Braid       Eric Ferguson    Jim Van Sickle

Mark Burman    Jeff O'Connell    Mitch Vasin

Johan de Vicq   Russ Payne       Roger Velez