Thursday, January 23, 2014

Is $53 Million Fair Compensation for ALPA Betrayal?

Twelve years may be a long time to wait for justice, and it may not have arrived even now. Still, today the twenty three hundred pilots who worked for Trans World Airlines, and who wound up on the bottom of the seniority list when the airline was acquired by American in 2001 are closing in on a settlement in their lawsuit against the Air Line Pilots Association.  

Allen Press
ALPA told its members this afternoon that it had agreed to stop fighting a court finding that it had betrayed its TWA members and will instead pay them $53 million. The settlement, "allows your union to move forward," ALPA president Lee Moak wrote. "This is positive progress for you and for your union and will close a difficult chapter in ALPA's history."

When I reached him on the phone this afternoon, Allen Press, the attorney who represented the TWA pilots in Brady v. ALPA was pragmatic. "It is a compromise," he said of the figure which was considerably below the amount ALPA might have been expected to pay if the financial losses of all two thousand plus pilots were tallied and presented to the court. But the dollar figure was what Press called, meaningful.  "The case has been going on for 12 years and the end was not in sight."  

Former TWA pilots and their lawyers in 2011
I spoke to a much more ebullient Press in July 2011, right after a jury ruled for the pilots. The jurors in New Jersey found that ALPA had sold out its members by failing to support their integrated into the American Airlines seniority list after the merger.  In exchange, ALPA was hoping that American's pilots would give up their in-house union, Allied Pilots Association, and return to the ALPA fold. That did not happen, but sure enough, the TWA folks wound up in a last-hired/first-fired situation when they started flying for American. When the industry tanked shortly thereafter, about half of these TWA pilots lost their jobs. 

But winning a jury verdict is far from the end of the matter. Press and his plaintiffs including Alan Altman, now a pilot with JetBlue had to prepare for another trial, this one to determine how much ALPA should pay for its bad behavior. In these discussions, nearly every figure tossed around was higher than the announced settlement. Some even suggested the damages could exceed one billion.

On the other hand, the plaintiff's lawyers had to consider how much ALPA could even pay. They were working with the idea that the union's net worth was $30 million and the insurance wasn't such a sure thing. Would bankrupting the union benefit the plaintiffs?

Lee Moak, ALPA photo
Over at ALPA HQ, the leadership has been struggling to keep members in the fold. The pilots at Delta who are pushing to leave the union have their own Facebook page and fund raising campaign. 

In his announcement to members, Moak promised dues will not rise and insurance will pay part of the claim. He may be gritting his teeth, but Moak must be hoping that by paying the money, this nasty business will soon be visible in his rear-view mirror. 

The same cannot be said for the wronged TWA pilots. Press must now come up with a plan to divvy up the money so that those most affected will receive fair compensation without pushing those who do not receive as much to challenge the distribution. 

"We've been working for a couple of weeks on different formulas and we are close to where we have an optimum model," Press said.  "It's not a number to make everybody happy, but a lot of people felt vindicated" in 2011, when the court affirmed they'd been wronged.

So to the question, "What's the penalty for treachery and deception?", it would appear the answer is $53 million. But there's no certainty that everyone who fell victim to it will agree that 12 years is long enough and its time to move on.




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