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US Airways Bankruptcy Judge Backs Unions
After extracting billions of dollars in concessions from union workers, the 23 top executives at bankrupt US Airways shamelessly decided to hand themselves fat severance packages on top of all the bonuses and perks they already enjoyed.
However, the judge overseeing the bankruptcy proceeding refused to approve the golden parachutes, backing an objection filed by CWA, AFA-CWA, and the pilots and machinists unions along with the United States Trustee.
The executive "retention" contracts for the top officers, originally valued at up to $18 million and later reduced to $14.3 million through negotiations pressed by the unions and the Official Unsecured Creditors' Committee, were disallowed in a June 15 order by U.S. Bankruptcy Judge Stephen S. Mitchell.
The package for the 23 officers was part of a proposed "transaction retention program" the airline wanted to implement, which would have allotted as much as $55 million in total bonuses and severance payments for 1,900 management employees.
Besides nixing the bonuses for the top execs, the objections of the unions and others resulted in the judge slashing the potential executive severance payout in the event the airline is liquidated from the $55 million figure down to $15 million.
CWA's attorney in the case, Daniel M. Katz, said that such rulings are rare, noting that bankruptcy courts routinely rubber stamp management proposals. "The unity produced by the joint opposition of the four major unions and the Office of the U.S. Trustee has informed management in no uncertain terms that they are being closely watched and that they don't have a free pass to pay themselves rich rewards when their principal accomplishment thus far has been to cut $1 billion a year in pay and benefits from rank-and-file workers," Katz said.
CWA's objection to the executive severance plan was presented to the court along with petitions signed by more than 2,200 union workers expressing outrage over management's hypocrisy.
The CWA filing noted that approval of the management payout "would generate a devastating loss of morale among the rank-and-file workforce... thousands of workers who have sacrificed on the job and at home, in a myriad of serious ways, would understandably view these payoffs as an insulting and treacherous stab in the back."
However, the judge overseeing the bankruptcy proceeding refused to approve the golden parachutes, backing an objection filed by CWA, AFA-CWA, and the pilots and machinists unions along with the United States Trustee.
The executive "retention" contracts for the top officers, originally valued at up to $18 million and later reduced to $14.3 million through negotiations pressed by the unions and the Official Unsecured Creditors' Committee, were disallowed in a June 15 order by U.S. Bankruptcy Judge Stephen S. Mitchell.
The package for the 23 officers was part of a proposed "transaction retention program" the airline wanted to implement, which would have allotted as much as $55 million in total bonuses and severance payments for 1,900 management employees.
Besides nixing the bonuses for the top execs, the objections of the unions and others resulted in the judge slashing the potential executive severance payout in the event the airline is liquidated from the $55 million figure down to $15 million.
CWA's attorney in the case, Daniel M. Katz, said that such rulings are rare, noting that bankruptcy courts routinely rubber stamp management proposals. "The unity produced by the joint opposition of the four major unions and the Office of the U.S. Trustee has informed management in no uncertain terms that they are being closely watched and that they don't have a free pass to pay themselves rich rewards when their principal accomplishment thus far has been to cut $1 billion a year in pay and benefits from rank-and-file workers," Katz said.
CWA's objection to the executive severance plan was presented to the court along with petitions signed by more than 2,200 union workers expressing outrage over management's hypocrisy.
The CWA filing noted that approval of the management payout "would generate a devastating loss of morale among the rank-and-file workforce... thousands of workers who have sacrificed on the job and at home, in a myriad of serious ways, would understandably view these payoffs as an insulting and treacherous stab in the back."