American Airlines pilots association to pay $45.5 million fine
April 15, 1999
From Correspondent Charles Zewe
Web posted at: 11:59 p.m. EDT (0359 GMT)
DALLAS (CNN) -- Saying it made him "sick to his stomach," a
federal judge hit the American Airlines pilots Allied Pilots Association Thursday
with a $45.5 million compensatory damage award for contempt
for staging a sickout against the airline.
U.S. District Judge Joe Kendall held the Allied Pilots Association
(APA) in contempt in February over the job action that led to
the cancellation of nearly 6,700 American flights.
Allied Pilots Association officials say they will appeal. If upheld, however, the
fine could wipe out the Allied Pilots Association financially. APA officials
claim the Allied Pilots Association is worth about $38 million.
"We're obviously disappointed by the judge's award," said APA
President Rich LaVoy. "We think we're a long way from this
being fully adjudicated."
American Airlines spokesperson Andrea Rader said the airline
takes "no particular pleasure" in the verdict.
Kendall acknowledged his decision might devastate the Allied Pilots Association
"A lot of very fine people are going to be hurt and hurt
badly by this ruling," Kendall said in handing down the
During a two-day hearing earlier this week, Kendall heard
testimony from the Allied Pilots Association and the airline about how much each
side believed the incident cost the carrier.
Dollars to days out
About 2,500 pilots called in sick during the 11 days of the
sickout that stemmed from a dispute over the integration of
pilots from Reno Air. Reno pilots make about half of what
American pilots earn.
American claimed the entire sickout cost the company more
than $225 million.
The contempt hearing, however, focused on the two-day period
that began with Kendall's February 10 back-to-work order and
ending when pilots were cited with contempt and returned to
the cockpit by the thousands on February 12.
The airline contends it could have resumed normal operations
more quickly had pilots returned to their jobs soon after the
judge ordered them to end the sickout.
"We would have recovered the airline two days earlier," said
Tim Ahern, American's vice president for operations and
Charts compiled by the airline showed that the number of
pilots calling in sick actually increased after the back-to-
American witnesses estimated losses for that two-day period
at $50.96 million. Expert witnesses for the Allied Pilots Association put the
losses at between $1-$4.5 million.
In handing down the fine, Kendall rejected Allied Pilots Association estimates as
"unbelievable" and sided with American.
Another $10 million due Monday
As part of his ruling, Judge Kendall ordered the Allied Pilots Association to put
up an additional $10 million by 4 p.m. Monday as a down
payment on the damages. The Allied Pilots Association was ordered in February to
place $10 million with the court in preparation of a fine.
Lawyers for both sides were asked to submit briefs on how the
remaining $25.5 million should be collected and whether Allied Pilots Association
officials should be held personally liable for the money.
In earlier testimony, witnesses for the APA said pilot work
rules and contractual agreements prevented pilots from
returning to work more quickly. But Kendall frequently
interrupted airline industry analyst Robert Mann Jr. and at
one point said Mann's comments and analysis were unclear.
The Allied Pilots Association contended that the sickout was a response to the
stress of the labor dispute over Reno Air. Allied Pilots Association officials
said the $45 million fine is not likely to prompt another job
action. The issue over Reno Air remains unresolved.
"We're very disappointed the judge would come up with this
number," LaVoy said. "If we're going to go forward, this is
not the way to resolve the problems. It is a shame that we've
come to this."
Labor peace at American has long been an issue. American
spokesperson Rader says she hopes the award ends the dispute,
which inconvenienced an estimated 670,000 passengers.
"They're victims of this -- as are we," she said. "We went to
court to get the sickout to stop. We want to close this
chapter and get on with labor peace."
Pilots Allied Pilots Association fined more than $45 million for
April 15, 1999
American Airlines | aa.com
Allied Pilots Association
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