BNA Daily Labor Report: Mechanics Ratify Contract With United

December 30, 2011: Members of the International Brotherhood or Teamsters have ratified a first contract with United Airlines, a subsidiary of United Continental Holdings Inc., that provides some 5,500 aircraft mechanics and related employees with “significant” wage increases, maintenance of health care benefits, and enhanced job security protections, the union announced Dec. 29.

“Passage of this agreement was a real breakthrough and a major step toward achieving the ultimate goal of a single combined contract for the 9,000 mechanics” at a merged United and Continental Airlines, Roger Apana, a member of the IBT negotiating committee, said in a statement. “It feels good that we were able to achieve an $11,500 signing bonus along with restoring many of the items that were conceded in bankruptcy and securing the best job protection we've had in our 70-year history.”

In March, the parties reached an initial tentative agreement, which was rejected by union members (107 DLR A-17, 6/3/11). Five months later, the parties reached the revised tentative agreement (219 DLR A-2, 11/14/11) and put it out for ratification.

The agreement is the first between the parties since IBT won the right to represent United's mechanics in March 2008 (62 DLR A-8, 4/1/08). It was reached nearly one year after United Continental Holdings negotiated a similar agreement with IBT to cover Continental Airlines' 3,700 mechanics (249 DLR A-6, 12/29/10).

United and Continental merged on Oct. 1, 2010, but the two airlines continue to operate as separate operating subsidiaries. The two carriers hope to harmonize as a single carrier. The holding company and the union will forge a single agreement to cover all the carrier's mechanics.

Parties Now Will Negotiate Joint Agreement

In a Dec. 29 statement, Jim Keenan, senior vice president of technical operations for United, said with the ratification “we now turn our attention to a joint agreement for all United and Continental mechanics, and are committed to reaching an agreement that is fair to the company and fair to our employees.”

Under the United agreement, employees will receive wage increases averaging 16 percent over the life of the agreement, Teamsters spokeswoman Leigh Strope told BNA Dec. 29.

According to a summary of the agreement, upon ratification, technicians with 13 or more years of service will be earning $36.06 an hour on the day shift, $36.57 on the afternoon shift, and $36.64 on the evening shift. Those rates will increase July 1, 2012, to $36.92 on the day shift, to $37.43 on the afternoon shift, and to $37.50 on the evening shift.

In a Dec. 2 letter to members urging ratification of the revised tentative agreement, IBT General President Jim Hoffa and David Bourne, director of the union's airline division, said the new contract would provide a signing bonus of $11,500, a significant increase from the $3,000 lump-sum payment that had been included in the agreement rejected in June.

Another major change from the rejected agreement provides that once the contract becomes amendable on June 30, 2013, the existing medical plan will remain in place while the parties negotiate for a new agreement and continue until the new agreement is ratified by the membership.

Under the rejected tentative agreement, the medical plan would have sunset or defaulted Jan. 1, 2013, if the parties were unable to settle on a new, less costly plan by that date.

The contract provides for an early out, buy-out program that is based on a cost of $75,000 per employee, according to the summary. “Unlike prior company buy-outs, the program … is not conditioned on a minimum number of employees opting to take the buy-out.

Likewise, it does not contain the restrictive age-and-service requirements that were contained in prior buy-outs and which made those prior buy-outs rather ineffective,” Hoffa and Bourne said.

The agreement establishes a committee to study the cost of living for mechanics based in San Francisco, Seattle, Chicago, Denver, and Washington, D.C.

Text of the summary of the tentative agreement, the full tentative agreement, and the Hoffa and Bourne letter may be accessed here.

Michelle Amber BNA Daily Labor Report.

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