American eyes award against union

Wednesday, November 8th 2000, 12:00 am
By: News On 6

Pilots criticize move to tap $21.65 million escrow fund

By Katie Fairbank / The Dallas Morning News

American Airlines Inc. said Tuesday that it plans to soon collect nearly half of the $45.5 million judgment assessed against its pilots' union for a sickout last year that cost the Fort Worth-based airline $225 million.

The Allied Pilots Association put $20 million into escrow in May 1999 with the U.S. District Court in Dallas, and the sum has grown to $21,650,000 with interest.

Until Tuesday, the airline had not commented on whether it would immediately seek to collect all or a portion of the judgment, and union leaders had said they planned to meet and discuss the matter with company officials.

In a telephone message to American's nearly 10,000 pilots, union leaders said late Monday that the demand for the money in escrow is confusing since American chief executive Donald Carty had assured them that he was willing to negotiate.

"Management continues to express its desire for better employee relations and its willingness to meet with APA to discuss next steps relative to the fine, while simultaneously taking the steps necessary to collect $21,650,000 of your dues," Gregg Overman, director of communications, said in the informational message.

The airline must collect the money because it has a responsibility to shareholders, said American spokeswoman Karen Watson.

If American seeks payment in full, the union has said, the $45.5 million judgment could bankrupt the organization.

"We are willing to sit down with them and discuss payment terms on the balance," Ms. Watson said.

"American has no interest in bankrupting the APA," she said, "but we have a fiduciary duty to our shareholders to collect the award."

The fine stems from a February 1999 work action by pilots protesting details of American's purchase of Reno Air Inc.

A Dallas federal judge ordered the pilots to return to work and assessed the fine after ruling that the union and two of its top leaders failed to promptly obey his order.

The union has said it plans to appeal the $45.5 million award to the U.S. Supreme Court.

It could seek an emergency stay of the payment but has not done so yet.