U.S. Dist. Judge William Dimitrouleas fined a Port Everglades, Fla.-based marine firm $60,000 on Sept. 22 for making illegal payments to union boss Walter “Buster” Browne in 1995. The fine, recommended by prosecutors as part of a plea agreement in June, was equal to the amount the company, Hvide Marine Corp, admitted to paying Brown. Dimitrouleas handed down the sentence after investigators completed a background check of the firm’s records.
Hvide executives also agreed to cooperate with federal investigators who are targeting Browne, the politically connected president of the Nat’l Fed’n of Public & Private Employees. Browne was a paid consultant for Hvide on government issues from 1993-98. Prosecutors tried and failed to convict him for tax-evasion and mail-fraud charges in the 1990s, but he did plead guilty in 1996 to charges stemming from a rigged union election. On previous occasions Browne has said publicly that he expects a federal indictment. [Sun-Sent. (Ft. Lauderdale) 9/24/00]
Court: Union, Bosses Must Pay $45.5 Million Damage Award
The U.S. Fifth Circuit Court of Appeals held Sept. 21 that the Allied Pilots Ass’n (APA) and two of its bosses must pay American Airlines (AA) $ 45.5 million in compensatory damages for failing to carry out a temporary restraining order requiring the union to call off a sickout by the union.
Judge Robert M. Parker affirmed the award imposed by the district court in Apr. 1999 and rejected APA’s argument that the penalty was awarded without regard to its due process rights and inconsistent with the Railway Labor Act. The ruling came one day after union members rejected a tentative agreement between AA and APA that would have extended their contract for one year and nullified the damages award.
After acquiring Reno Air Inc. in Dec. 1998, AA told APA that it intended to operate Reno Air separately for a transitional period. APA argued that the newly acquired airline fell under the existing collective bargaining agreement, and that AA’s operation of Reno Air with pilots not on American’s pilot seniority list violated the agreement. APA said AA unilaterally amended the collective bargaining agreement, and APA pointed out that such an act, under the RLA, justified a strike or other self-help measure. AA argued that the disagreement was a “minor” dispute under the RLA, making it illegal for the union to take any self-help measures.
The parties negotiated for about two months without a resolution. On Feb. 5, 1999, union members began an unannounced sickout that resulted in over 1,600 flight cancellations and cost AA millions of dollars in lost revenues. U.S. Dist. Judge Joe Kendall granted AA a temporary restraining order on Feb. 10, 1999. The order required APA, president Richard LaVoy, and vice-president Brian Mayhew, to take “all reasonable steps within their power” to prevent the continuation or encouragement of the sickout, including instructing the pilots to resume their normal work hours, notifying pilots by the “most expeditious means possible” of the order and its meaning, and posting the order on the union’s telephone and Internet hotlines.
Finding that after the restraining order went into effect, the sickout increased in size, the district court Feb. 12, 1999, issued an order of civil contempt against APA. After a hearing on compensatory damages, the district court awarded the airline $ 45,507,280, an amount equivalent to the losses attributable to APA’s conduct.
The Fifth Circuit agreed with the district court that LaVoy and Mayhew violated sections of the order by failing to take all reasonable steps to end or prevent the sickout and failing to issue “cease and desist” directives to the pilots. In addition, their communications with the pilots on Feb 10 and Feb. 11 were not in compliance with the order.
Affirming the damage amount, the Fifth Circuit said “Based on the testimony of American’s damage experts … the district court determined that American’s overall loss caused by the work stoppage were somewhere between $200 [million] to $250 million. The basis of the district court’s compensatory damages award was the actual damages suffered during the two days the APA was in contempt. This amount, approximately $ 51 million, was reduced another 11 percent for the margin of error in American’s estimation and ‘booking away’ [where passengers change their reservations to another airline because of a potential disruption in service] that may have occurred.” [BNA 9/25/00]