CHICAGO (CN) - The Teamsters Union may be liable for revoking the seniority of flight attendants who worked for Midwest Airlines before it went bankrupt and was engulfed by another airline, the 7th Circuit ruled.
Republic Airways Holding, the parent group of Republic Airlines, acquired Midwest Airlines through its parent company Midwest Air Group in 2009.
Though Republic integrated seniority lists for mechanics, baggage handlers and administrative personnel, it furloughed the flight attendants and required them to apply for "new" jobs. If rehired, the Teamsters Union placed them at the bottom of the seniority list.
Three Midwest flight attendants and a committee "purporting to speak for all of them" filed suit, saying that the union's actions violated federal law.
Under the McCaskill-Bond Amendment to the Federal Aviation Act, combinations of multiple airlines into a single carrier require the new entity to merge the seniority lists of the two carriers' employees. The legislation derives from American Airlines' acquisition of TWA in 2001 when strikes were threatened over seniority disputes.
U.S. District Judge Rudolph Randa in Milwaukee ruled against the flight attendants, finding that Republic had not completely taken over Midwest though it acquired some assets related to air transportation. "McCaskill-Bond was never meant to protect the employees of an air carrier that simply goes out of business," Randa had said.
But the 7th Circuit reached a different conclusion, noting that Republic had taken control of Midwest's gates, take-off and landing slots, and trademarks. Republic's return of nine leased planes to Boeing also suggested a takeover, rather than just a partial buyout, the court determined.
"One cannot remove bankrupt and soon-to-disappear carriers from the statute's coverage, as the Teamsters propose, without simultaneously circumventing the statutory text and frustrating the design behind it," Chief Judge Frank Easterbrook wrote for a three-member panel, noting the McCaskill-Bonds Amendment's history.
The statute would have been satisfied with the acquisition of only half of Midwest's assets, the court noted.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.