About the Contract Negotiations
Who is involved in the negotiations?
Atlas and Southern (collectively, the “Company”), and the Union have their own respective bargaining committees and each side selects its own representatives.
What is the process for the Atlas and Southern pilots to reach a new collective bargaining agreement?
Both Atlas and Southern have collective bargaining agreements (CBAs) with the Union that require all parties to follow specific procedures to negotiate for a JCBA in the event of a merger, as we have here. Specifically, both the Atlas and Southern CBAs have merger provisions in Sections 1F and 1B, respectively, which apply in a merger where the same union represents employees from both companies. Both CBAs are very clear about the applicable procedure, which provides a path to promptly obtain a new JCBA in the event of a merger as we had with Atlas and Southern.
The merger provisions provide for a defined nine-month period of bargaining, which starts to run when the Union provides the Company with an integrated seniority list.
Following that period of bargaining, any unresolved issues are determined promptly via binding arbitration as set forth in the CBAs.
In this case, the Union has flatly refused to follow the merger provisions and has also refused to provide the integrated seniority list to the Company, despite numerous requests for it. This has been the root of the delay and the primary reason our pilots do not yet have a new JCBA.
Should pilots expect a pay increase as a result of these negotiations?
Yes. Atlas and Southern recognize that the market has changed and that increases to the existing pay scales are warranted in the next agreement.
How long will the negotiation process take?
The timeframes remain open for now and are subject to resolution of pending legal disputes. Once the procedural path forward is determined or agreed, negotiations can be completed within a reasonable period of time, not to exceed nine months from the time we receive the integrated seniority list, as set forth in the CBAs. These periods could be accelerated by mutual agreement with the Union based on significant progress already in the negotiations.
We continue to do everything we reasonably can to move the process forward while seeking to obtain the Union’s compliance with the CBAs.
In the meantime, the Company and the Union have continued to bargain pursuant to an agreed Framework Agreement that has resulted in meaningful progress while we await the outcome of the pending legal disputes. The parties have agreed that any Tentative Agreements (TA’s) will not be subject to re-negotiation.
The significant progress made under the Framework Agreement could help accelerate the ultimate resolution of a new JCBA. We have continued to inform the Union that we remain committed to completing a JCBA as soon as possible.
What has taken so long to reach the new JCBA?
The Union’s refusal to follow the merger provisions for a new JCBA has resulted in significant delay. Once the Company announced Southern would be merging with Atlas in 2016, the Union would not engage with the Company on negotiations for a new joint CBA. Rather the Union declared the parties were at an impasse in bargaining and sought assistance from the National Mediation Board (NMB), even though the parties had only been bargaining for a couple of months and had only discussed a few sections. The Company does not believe that the NMB has the authority to decide this matter at this stage, and to date, the NMB has not intervened in the negotiations or related disputes.
As a result of the Union’s failure to comply with the seniority integration and JCBA negotiation processes that are contractually required, Atlas and Southern have been compelled to file legal proceedings to move the process forward. Had these delays not occurred, and had the Union provided the Company with the integrated seniority list when the Company announced it would be merging Southern into Atlas in 2016, our pilots would have a new JCBA by now. The reality is that Union leaders do not want the parties to promptly get a new JCBA, but rather they want to delay the process as long as they can in attempt to put increasing pressure on the Company at the bargaining table.
We are currently engaged in voluntary collective bargaining with the Union and have made progress in a number of areas. While significant progress has been made in many sections, it is important to note the Company has requested and is waiting, for the Union to provide us with a comprehensive proposal for pay and benefits for the new JCBA. This is critical for the parties to make any meaningful progress in negotiations.
Quite simply, we need a complete proposal on the remaining compensation and work rule requests to fully assess the cost of the Union’s proposal.
We value our pilots’ significant contributions and want to pay them accordingly. As our Company grows, we have told the Union that we believe that the compensation of our hardworking employees should grow as well.
Will scheduling practices be a part of JCBA negotiations?
Yes, scheduling is definitely part of our negotiations.
We work hard to ensure efficient and fair scheduling policies to recognize regulatory requirements, appropriate rest and quality-of-life considerations, as well as meeting the demands of our customers. Part of our competitive advantage is our ability to provide customers with flexibility, reliability and superior service.
Can Atlas or Southern pilots strike? Can the Company impose a lockout?
The Union currently has no contractual or legal right to strike, regardless of any strike authorization vote. Likewise, Atlas cannot impose a lockout.
The Atlas and Southern CBAs specifically provide that if the parties cannot reach a negotiated JCBA within a set period of time, any open issues are resolved through an orderly binding arbitration process.
What happens if Atlas is unsuccessful in enforcing the merger provisions of the respective CBAs?
The merger would be further delayed and the parties would need to negotiate separate CBAs under traditional “Section 6 bargaining” for both Atlas and Southern pilots, with no defined timelines for resolution. Any remaining open issues that cannot be settled through bargaining are resolved through the threat of a strike under “Section 6 bargaining,” instead of via the timely and orderly arbitration procedures provided for in the parties’ CBAs.
What is the status of the legal disputes?
In late June and early July, 2019, two important legal decisions relative to the negotiations were returned. In one, an arbitrator ordered the Union representing Southern pilots to comply with the JCBA and provide seniority lists to the company. In another, the federal Court of Appeals upheld a preliminary injunction that was imposed to stop an illegal work slowdown by the Union. In August 2019, an arbitrator affirmed that the merger provisions of the CBA apply in connection with Atlas Air’s acquisition of Southern Air, Inc., in April 2016. The arbitrator’s decision further affirmed the Company’s long-standing position that the Union has been in violation of the existing CBA.
The arbitrators in both cases ordered the Union to now proceed with contractually required negotiations for a new JCBA in connection with the merger. The Union is required to submit an integrated seniority list of Atlas Air and Southern Air pilots to the company within 45 days, followed by a period of bargaining, after which any unresolved issues would be submitted to timely, interest-based arbitration.
In the meantime, the Company remains highly motivated to reach a new CBA that increases pilot pay and updates work rules.
About the Atlas pilot workforce
How may pilots work for Atlas and Southern?
Atlas and Southern currently employ over 2,000 pilots (as of May 1, 2019).
How are pilots compensated at Atlas and Southern compared to the industry?
Our pilots receive a competitive total compensation package, as per agreements previously reached with the Union. This includes generous health and welfare benefits; competitive wages; Company 401(k) match; and a long-standing profit sharing program.
Since Atlas acquired Southern, the Company has also provided additional compensation and benefits to our Southern pilots to match that of Atlas pilots.
We are very eager to make further improvements to pilot compensation to recognize their contributions and remain competitive in this tight labor market.
Have the pilots been without a raise under the current CBAs?
No. While the Union continues to publicly state that pilots have been without a raise, the fact is that all of our pilots receive annual raises under the existing pay scales in the current CBAs (with the exception of pilots who may have maxed out under the pay scale due to longevity).
Atlas is committed to increasing the wage rates within these pay scales, under the JCBA.