[JURIST] Within hours of the court-appointed deadline, leaders of the flight attendants union have reached a tentative settlement with bankrupt Northwest Airlines (NWA) [official website; press release], after the two sides spent over 24 straight hours at the negotiating table in New York, the Minneapolis Star Tribune reported Wednesday. As Wednesday's end-of-the-business day deadline looms, the pilots union, Northwest Airlines Air Line Pilots Association [union website; press release], has yet to reach an agreement with NWA. A spokesman for the pilots' union said the negotiations remain "very fluid" and noted that US Bankruptcy Judge Allan Gropper has twice previously extended bargaining deadlines in the case.
If the flight attendants' deal is approved by a majority of members of the Professional Flight Attendants Association (PFAA) [union website; press release], the agreement would restructure their current collective bargaining agreement. Although the details of the agreement have not yet been released, NWA initially sought to eradicate $195 million - or a 17.5 percent wage decrease - from the PFAA contract and insisted in court briefs that it was unwilling to back down from that "ask."
The deal between the PFAA and NWA eliminates the possibility of a bankruptcy judge rejecting the collective bargaining agreement (CBA) altogether, a prospect that the pilots' union still faces. Section 1113 of the US Bankruptcy Code [text] allows a reorganizing debtor, in this case NWA, to renege on its labor contracts - without penalty - provided the judge finds the debtor renegotiated with the labor unions in good faith.
Should a judge elect to reject the contract and declare the current CBA void, the pilots union has threatened to strike, which analysts predict could force the company into liquidation. NWA insists, however, that the Railway Labor Act (45 U.S.C. 151) [text], which compels parties to a CBA to make "every reasonable effort" to avoid interruptions that would affect mass transportation, would forbid a strike during bankruptcy. The Star Tribune has local coverage. AP has more.