BEFORE THE PRELIMINARY ARBITRATION BOARD In the Matter of the West Pilots’ Request for a Merger Committee between Allied Pilots Association Arbitrators Shyam Das, Steve Crable and Joshua Javits and American Airlines Pilots Seniority Integration Committee f/k/a Allied Pilots Association Merger Committee and ALLIED PILOTS ASSOCIATION’S US Airline Pilots Association PRE-HEARING BRIEF and US Airline Pilots Association Merger December 3, 2014 Committee and West Pilots Merger Committee and American Airlines, Inc. and US Airways, Inc. INTRODUCTION US Airways, Inc. (“US Airways”) and American Airlines, Inc. (“American”) merged into a single airline (“Company”) effective December 9, 2013 (the “US Airways/American Merger”). Seniority integration for the pilots at the merged carrier is governed by the McCaskill-Bond Amendment to the Federal Aviation Act (“McCaskill-Bond”), which incorporates the longstanding airline merger principle that pilot seniority lists must be integrated “in a fair and equitable manner,” including, if necessary, through a final and binding arbitration. Prior to the merger, the Allied Pilots Association (“APA”) (then the certified representative of the pre-merger American pilots) and the US Airline Pilots Association (“USAPA”) (then the certified representative of the pre-merger US Airways pilots), and the carriers negotiated a Memorandum of Understanding (“MOU”) that established a seniority integration process (consisting of negotiation and, if necessary, arbitration) consistent with McCaskill-Bond. As is standard practice in the seniority integration context, APA and USAPA each designated committees to represent the interests of their respective pre-merger pilot groups in the seniority integration process. On September 16, 2014, the National Mediation Board (“NMB”) certified APA as the collective bargaining representative for all Company pilots and decertified USAPA as the collective bargaining representative for the pilots of US Airways. As the certified bargaining representative, APA now owes a duty of fair representation (“DFR”) to all pilots flying on behalf of the Company, and has the right and the responsibility to ensure that the seniority integration proceeding is fair and equitable as required by McCaskill-Bond. To this end, APA has committed not to interfere with the existing merger committees’ deliberations or decisions. 2 To permit the seniority integration arbitration to proceed as currently structured, however, would ignore a critical reality: the Company has three unmerged pilot seniority lists. In addition to the American Seniority List, there is also the US Airways (East) Seniority List, and the US Airways (West) Seniority List. The two unmerged US Airways lists are a legacy of the longstanding and bitterly-fought seniority dispute that arose following the 2005 merger of US Airways and America West. The former America West pilots vigorously support a previously- arbitrated seniority list (the “Nicolau Award”), which was driven largely by “pre-merger career expectations” and has never been implemented. USAPA, in contrast, was formed in reaction to the Nicolau award and is constitutionally mandated to oppose its implementation and advocate for seniority integration solely based on date-of-hire principles. In light of USAPA’s constitutional mandate, the fraught history of the East/West seniority dispute, and the fact that USAPA no longer owes any duty of fair representation, the West Pilots suggest that APA would breach its duty of fair representation by delegating control over integration of the US Airways (East) and US Airways (West) seniority lists to the USAPA committee. Thus, were APA to permit the USAPA committee to be the sole representative of the former US Airways pilots in the seniority integration process, and not enable the West Pilots to be separately represented, the West Pilots would almost certainly bring suit against APA for a breach of the duty of fair representation. APA takes no position on whether USAPA or the West Pilots have the better of the argument regarding how the relative seniority of East and West Pilots should be determined in connection with the US Airways/American seniority integration. APA does, however, have a strong interest in ensuring that the seniority-integration process is administered in a manner consistent with its DFR obligations and the “fair and equitable” requirements of McCaskill-Bond. APA therefore considers it prudent to designate a separate 3 merger committee to represent the interests of the West Pilots in the upcoming seniority arbitration. The designation of such a committee is within APA’s discretion as the certified bargaining representative, under both the duty of fair representation and McCaskill-Bond, and is consistent with past industry practice in seniority integration arbitrations. During discussions with USAPA over the Seniority Integration Protocol Agreement (“Protocol Agreement”) to implement the MOU, APA took the position that, pursuant to the court’s decision in Addington v. US Airline Pilots Ass’n, No. CV-13-00471-PHX-ROS, 2014 WL 321349 (D. Ariz. Jan. 10, 2014), USAPA would no longer be a party to the Protocol Agreement (and therefore able to constrain APA’s discretion to appoint a West Committee) once it ceased to be the certified bargaining representative for the former US Airways pilots. USAPA indicated that if APA exercised its discretion to designate a West Committee, USAPA would sue. USAPA proposed instead that APA permit a neutral panel of arbitrators to decide whether the West Pilots would have separate representation in the seniority arbitration. APA agreed and that compromise is reflected in the final Protocol Agreement. Accordingly, APA now asks this Preliminary Arbitration Board to affirm APA’s valid exercise of its discretion and grant the West Pilots’ request that a separate merger committee be designated to represent their interests in the upcoming seniority integration arbitration. QUESTION PRESENTED APA is the exclusive certified collective bargaining representative for all Company pilots and considers it prudent, in light of the duty of fair representation and McCaskill-Bond, to designate a separate merger committee to represent the interests of the West Pilots in the upcoming seniority integration arbitration. Pursuant to the Protocol Agreement, however, APA 4 has delegated the decision whether to appoint a West Committee to this Preliminary Arbitration Board. Should the West Pilots’ request that APA designate a separate merger committee to represent the interests of pilots on the US Airways (West) Seniority List be granted as a valid exercise of APA’s discretion as the exclusive certified bargaining representative for all Company pilots? FACTUAL BACKGROUND A. Seniority Dispute Between the East and West Pilots and the Formation of USAPA. In 2005, US Airways, Inc., then in bankruptcy, and America West Airlines, Inc., combined to create the successor airline, US Airways, Inc. (“US Airways”). US Airways/America West Airlines, 35 NMB 65, 68 (2008), J. Exh. 28.1 At the time of the 2005 merger, the Air Line Pilots Association (“ALPA”) represented the pilots at the two pre-merger carriers through separate Master Executive Councils (“MEC”): the US Airways MEC represented approximately 5,100 pilots (“East Pilots”), of whom approximately 1,700 were on furlough; the America West MEC represented approximately 1,900 pilots (“West Pilots”), none of whom were on furlough. In connection with the US Airways/America West merger, the East Pilots and the West Pilots (through their respective ALPA governing bodies) and the merging airlines agreed, in a collectively-bargained US Airways/America West Transition Agreement negotiated pursuant to the Railway Labor Act (“Transition Agreement”), that the pilot workforces of the two airlines would be combined. Transition Agreement, J. Ex. 1; see also ALPA Merger Policy, J. Ex. 3. A 1 APA and the Company have submitted Joint Exhibits in this Preliminary Arbitration. These Joint Exhibits are referenced throughout this brief as “J. Ex.” 5 dispute arose, however, as to the relative placement of the two groups of pilots on the integrated seniority list that was to be used by the combined, post-merger US Airways. This dispute proceeded to what was supposed to be final and binding arbitration before a neutral arbitrator, George Nicolau, who issued his award on May 1, 2007 (“Nicolau Award”). Nicolau Award, J. Ex. 2. Largely driven by the disparity in furloughs and a further disparity in the two pilot groups’ “pre-merger career expectations,” the Nicolau Award placed approximately 500 East Pilots at the top of the seniority list, 1,700 furloughed East Pilots at the bottom of the list, and blended the remainder of East Pilots with West Pilots generally according to their relative positions on their pre-merger seniority lists. On December 20, 2007, US Airways accepted the Nicolau Award. Nevertheless, the Transition Agreement provided that the Nicolau Award would only be implemented when the parties had reached a single collective bargaining agreement for the East and West Pilots. In response to the perceived unfairness of the Nicolau Award, a group of East Pilots formed a new organization called the US Air Line Pilots Association (“USAPA”), which was constitutionally mandated to oppose implementation of the Nicolau Award and advocate for seniority integration based solely on date-of-hire principles. USAPA Constitution, J. Ex. 4. USAPA filed a petition with the National Mediation Board (“NMB”)