The Teamsters Union on Thursday said bankruptcy reform is needed to protect airline workers from abuse under the current law.
Stephen Nagrotsky, deputy director of the Teamsters Airline Division, testified before the House Subcommittee on Commercial and Administrative Law hearing, “Protecting Employees in Airline Bankruptcies.”
Airlines received $5 billion in taxpayer money in the aftermath of the Sept. 11, 2001 attacks, reimbursement for increases in insurance premiums and billions in loan guarantees.
In addition to that substantial public assistance, airlines shifted their pension liabilities to the Pension Benefit Guarantee Corporation and the U.S. taxpayer.
Large carriers used the U.S. Bankruptcy Code to reject their collective bargaining agreements, cut employees’ wages and terminate their pension plans, Nagrotsky said.
“The Code has been used by the carriers to slash, cut and dump their employees’ wages and benefits,” Nagrotsky said.
He urged that Congress preclude airlines from using the bankruptcy code to get rid of their pension obligations without a process that takes employees’ concerns into account. A process involving negotiation and mediation has been used successfully by the railroad industry for decades.
Nagrotsky recommended that air carriers covered by Title II of the Railway Labor Act be treated the same as their counterparts in the railroad industry. Rail carriers are exempt from two sections of the Bankruptcy Code, 1113 and 365.
“Both of these statutory provisions have been used by carriers to reject collective bargaining agreements in order to outsource skilled and highly critical jobs overseas and to terminate their employees’ defined benefit pensions,” Nagrotsky said.
The Teamsters Union Airline Division represents more than 43,000 airline employees, including 18,500 mechanics across 10 airlines, as well as pilots, flight attendants, customer service agents, reservationists, simulator technicians, ramp agents, stock clerks and dispatchers.
