American Air, Gate Gourmet Face Pressure on Contracts to Avoid Strikes

(Bloomberg) -- President Joe Biden’s administration is pressing negotiators to reach agreements on new contracts for flight attendants and airline caterers, hoping to give a boost to union allies without setting off a summer of labor strife that could have dire consequences for his reelection hopes.

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The National Mediation Board, which oversees labor relations and contract talks between airlines and unions, last week summoned representatives from American Airlines Group Inc. and the Association of Professional Flight Attendants to Washington for days of intensive mediation on a new contract for the union’s 27,000 members.

The NMB has urged both sides to wrap up a deal by the end of May, according to people familiar with the talks, who spoke on condition of anonymity to discuss the negotiations. The parties have already been in mediation seeking a new deal for more than a year.

The board has issued an unusual ultimatum to American and to Gate Gourmet, a major airline caterer that is negotiating with its own union workers, one person briefed on the discussions said. NMB has specifically warned the companies that they could be released from mediation if the two sides don’t come to a deal around the beginning of June, the person said.

Releasing the parties from mediation would trigger a 30-day “cooling off” period under federal law, after which the airline and catering workers would be permitted to strike if no agreement has been reached in the interim. Until that happens, the employees are barred from walking off the job under the terms of the Railway Labor Act, which governs union relations in the air travel industry as well.

By raising the prospect of releasing them from mediation, NMB is making the path to a strike clearer. The administration is counting on the idea that the pressure will make the companies settle to avoid the stoppage. But if the gambit fails, labor unrest could trigger a massive disruption in the US air travel system just in time for summer and ahead of the final sprint for Biden’s reelection campaign.

The labor talks represent a political and economic tightrope for Biden and a fresh test of his relationship with organized labor, whose support in swing states is critical to his reelection hopes.

Read more: Biden Loves Unions But Blue-Collar Workers Don’t Love Him Back

The board didn’t respond to requests for comment. The White House declined to comment.

“Our flight attendants deserve to be paid as well as the best paid flight attendants in the business,” American said in an emailed statement. “We’re ready to get a deal done quickly and appreciate the National Mediation Board for its oversight to help make that happen.”

The NMB’s move comes amid growing pressure from Congress to speed up talks on new labor agreements. Last week, 178 members of Congress signed a letter to the NMB urging the panel “to use all of the tools at its disposal” to work toward resolving ongoing negotiations with ratified new contracts “that are long overdue.”

‘Intensive’ Negotiations

American and the APFA will begin “intensive” talks in Washington Thursday and Friday, and again May 28 through May 31, the union told members Monday. The sessions follow three weeks of bargaining in the Dallas area.

American’s latest proposal would provide a 17% pay increase when a new contract is signed, short of the 28% the union is seeking, according to the APFA. The union also wants retroactive pay to cover the five years since flight attendants last received a raise, something it says American is not offering. While the carrier’s proposal adds pay for passenger boarding time, it does not include a per diem boost sought by the union.

“We believe in order to get American Airlines to where we need them to be, it needs to be under threat of a strike,” said Paul Hartshorn Jr., an APFA spokesman. The flight attendants haven’t received a pay raise since 2019. The NMB earlier declined at least one request by the union to be freed from further talks.

A Gate Gourmet spokesperson said the company is “engaged in good faith discussions” with negotiators from unions including Unite Here and the International Brotherhood of Teamsters. “The discussions are ongoing, and we are committed to reaching a new labor agreement that recognizes our valued employees without any disruption,” the spokesperson said.

A spokesperson for Unite Here said its members at Gate Gourmet, as well as a competing caterer, had voted in 2019 to authorize a strike if released from mediation by the NMB. The union “remains committed to doing everything within legal means — up to and including strike activity — to ensure these workers receive just compensation for their essential work,” the spokesperson said.

Pay Raise

Southwest Airlines Co. flight attendants in April approved a new four-year agreement with an initial 22.3% pay increase, followed by three annual raises of 3%, The workers also will split a pool of at least $364 million for ratification bonuses based on time worked during the years the accord was being negotiated. It was the first contract approved during the latest round of talks between unions and three of the four largest airlines, and set some standards that workers at American and United Airlines Holdings Inc. will seek to match.

Read more: Southwest Flight Attendants Approve Contract Worth $6.3 Billion

American Airlines flight attendants staged a strike in late 1993 that ended after President Bill Clinton persuaded both sides to submit the dispute to a presidential mediator for binding arbitration. The union came close to another walkout in June 2001, reaching an agreement with American shortly before a strike deadline. President George W. Bush had vowed to block a strike at the height of the summer travel season if the deal had not been reached.

The last strike at a major US passenger carrier was in June 2010, when Spirit Airlines Inc. pilots walked off the job for a week before reaching a tentative contract agreement.

Biden has touted himself as the most pro-labor president in US history and won the endorsement of influential unions ahead of November. But the president faces a tougher task courting rank-and-file workers, with presumptive Republican nominee Donald Trump enjoying strong support among blue-collar voters skeptical of Biden’s economic policies.

Biden’s dealings with organized labor have been tumultuous. His move to impose a deal on freight-rail workers in 2022 rankled union allies. But the president bolstered his standing with another influential union, the United Auto Workers, joining a picket line during a strike against Detroit’s legacy automakers and eventually securing the group’s endorsement.

--With assistance from Jordan Fabian.

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