Negotiations Update

Brothers and Sisters,

The full negotiating committees met with Association attorneys in December to prepare our Scope proposals followed by a sub-committee meeting in Washington D.C. the week of January 2nd to the 5th, along with the Association legal team to finalize these Scope proposals.

The Executive Negotiating Committee met face to face with American Airlines this week in Washington D.C. The Executive Committee presented our proposals and positions on Scope articles for all Association Classifications to the company. This is another important step that will ultimately bring the parties closer to resolutions on the remaining critical economic topics.

Additionally, the parties had dialogue and narrowed the gaps on MLS/M&R overtime opportunity distribution procedures and the unpaid LOA matrix charts for all groups.

Complete Tentative Agreements were reached on:

Reduction in Force- MCT

Reduction in Force – MTS

ASAP (Aviation Safety Action Program) Letter of Agreement- M&R – MLS

The future negotiating calendar is as follows:

January 22- DCA

February 12- DCA

February 19- DCA

Fraternally,

Fleet Negotiating Committee: Mark Baskett ,William Fa, Mike Fairbanks, Tim Hughes, Steve Miller, Tim Murphy ,Pat Rezler, Art Risley, Andre Sutton, Rodney Walker, Bill Wilson

Mechanic and Related/Stores Committee: Jason Best, Mike Bush, Ken Coley, John Coveny, Dale Danker, Mark Huffman, Bennie Martino, Gary Peterson, Rollie Reaves, Sean Ryan, Jay Sleeman, Mark Strength,

Legislative Update

In November, we provided you information about the changes the US Department of Transportation (DOT) made to the federal drug testing requirements. As you recall, workers already subject to DOT drug tests will now be screened for four additional drugs, specifically, semi-synthetic opioids. That change took effect January 1, 2018. More information is available on the TWU website.

 

In our effort to keep you informed of updates relating to this DOT change, we’re alerting you to two documents DOT produced intended to help workers navigate the drug testing changes.

 

1. The first document is an Employee Notice, intended to provide some real-world interpretation of how the new drug testing process will occur. You can access that document here.

 

2. As you recall, under the revised DOT regulation, before a MRO reports information about your prescription drugs to DOT or employer, the MRO may give you 5 business days to ask your doctor to call the MRO and determine if the medication can be changed to one that does not pose a significant safety risk.

 

The second document is official DOT guidance that describes scenarios in which the MRO can report information about your legally prescribed medication to a third party (employer, etc) before those 5 business days have passed. The second DOT document is here.

Equity Update

Brothers and Sisters:

As we enter a new calendar year and begin to analyze the implications of the recently enacted changes to the U.S. tax code, TWU’s lawyers are pressing the IRS for a determination as to the tax-exempt status of the reserve fund created to hold the American Airlines stock granted to the TWU during the bankruptcy reorganization. This determination by the IRS is critically important. Our tax lawyers advise us that, if the IRS determines that the reserve fund is not a tax-exempt entity, a potential capital gains tax liability of almost half the estimated value of the reserve fund may be owed to the IRS. Although this means that a full distribution of the fund will be postponed until the extent, if any, of these tax liabilities is determined by the IRS, we expect to distribute most of the monies from the fund within the next few months.

Unfortunately, your distribution payouts were delayed for several years by the now-concluded litigation contesting the TWU distribution plan. Mindful of this, we are working hard to get the reserve fund monies into your pockets as quickly as possible, while also preparing for an adverse determination by the IRS. To do that, our lawyers advise us that we must do two things. The first is that we have to set aside approximately half of the fund to pay the potential capital gains tax liability in the event the IRS does not agree with the TWU’s position that the reserve fund should have the same tax-exempt status as our Union does. The second is that we have to await American Airlines’ agreement to a system for the payout of the reserve fund balance to the members, including the withholding of all applicable income and FICA taxes.

To expedite that process, TWU’s lawyers and accountants are actively engaged in discussions with American Airlines, but they have not yet agreed to pave the way for these payments. We remain optimistic that an agreement will be reached with the Company in the very near future, so that payouts can commence. But again, the Company has not yet agreed to make this happen. Unlike in 2013 when American Airlines first made distributions of the dollar value of stock to our members through its payroll system (withholding taxes and paying its share of FICA), the Company is refusing our request to do so again now. Their refusal both unreasonably delays the distribution process and makes it more costly to TWU members.

Instead, American Airlines has proposed that TWU retain an outside company to act as a payroll agent. This is unreasonable, costly, and potentially problematic in many ways. The Union continues to press the Company to do the right thing, but as of now American Airlines is not helping this situation.

Suffice it to say that we understand your frustration with the time it has taken to get to this point. Unfortunately, while the court litigation was pending, we were constrained by court order from doing anything with the reserve fund monies.

Rest assured that the Union’s leadership, lawyers, and other professional advisors are doing everything in our power to move the process along and, of course, to get the reserve fund monies into your pockets as soon as possible.

On behalf of the entire TWU International leadership, please accept my best wishes to you and your loved ones for a happy and healthy 2018.

Fraternally,

Mike Mayes

TWU International Vice President and Air Division Director

AA Bonus Update

Brothers and Sisters:

You likely received a message from American Airlines notifying you of a $1,000 distribution for every team member. The company claims this bonus is to celebrate the hard work of each of you, and that the extra money is a result of the new tax structure recently passed by Congress. Don’t buy it!

American Airlines has been making record profits for years, and they’ve benefitted from their protected bankruptcy status and have paid next to nothing in taxes for several years.

They have had enough money to give TWU members bonuses, raises, and lower cost benefits for years, they have simply chosen not to do it, or negotiate it in a JCBA. While TWU members continue to provide record-setting performance, American’s leadership team seems to take us for granted.

Now that the government gave them (and every other corporation), an even bigger tax break, they are sending members a letter trying to make themselves look like the good guys, taking care of their workforce. It’s time we call this corporate propaganda what is: Doug Parker and Robert Isom trying to distract you from the fact that we’ve been negotiating for over two years, and they have still failed to negotiate the industry leading contract they continue to promise.

Do they think $1,000 is going to make up for their complete lack of investment in their largest workforce on the American Airlines property? The leadership continually tells the membership that they want to reach a JCBA, yet none of the key leaders have come to the bargaining table. While Doug talks about the best labor relations, those at the bargaining table continue to fight over items United and Delta employees enjoy today.

The new year has begun with the same rhetoric from the top AA management. It’s time for Doug Parker to recognize they have still failed to deliver on anything close to the contract our members have been promised. In November, Doug Parker said reaching a JCBA was his top priority, and TWU intends to hold him and his leadership team accountable for delivering on that commitment.

Fraternally,

Mike Mayes

TWU International Vice President and Director, Air Division