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Transportation — McCaskill-Bond Amendment

By: WISCONSIN LAW JOURNAL STAFF//November 30, 2011//

Transportation — McCaskill-Bond Amendment

By: WISCONSIN LAW JOURNAL STAFF//November 30, 2011//

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United States Court of Appeals

Civil

Transportation — McCaskill-Bond Amendment

Airlines’ seniority lists must be merged when one airline purchases another.

“Nothing in the text of the statute asks whether one of the merging carriers is bankrupt and about to vanish when the transaction closes. There’s a good reason for the omission: this statute grew out of American Airlines’ acquisition of Trans World Airlines, which was bankrupt and would have closed its doors had it not been acquired. TWA had its main hub in St. Louis; the two Senators whose names are on the legislation represented the State of Missouri. (The original sponsors were Senators Bond and Talent; Sen. McCaskill replaced Sen. Talent as a sponsor when she succeeded him.) What seniority TWA’s former employees would retain was a contentious issue that threatened to frustrate the transaction or precipitate a strike; the statute provides how these transactions must be handled in the future. 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. ‘[W]hat those words would mean in the mouth of a normal speaker of English, using them in the circumstances in which they were used’ is that they govern all transactions in which an acquisition is followed by joint operations, whether or not one carrier was on the brink of collapse. Republic acquired Midwest—what little of it remained— lock, stock, and barrel, via a merger, which turns two corporations into one, while the statute would have been satisfied with the acquisition of only 50% of Midwest’s assets.”

“The statutory requirement that the (formerly) separate carriers operate as a single carrier matters when the carriers maintain separate businesses. Although United Airlines and Continental Airlines have merged (rather, their holding companies have merged), they have continued to operate as separate businesses, integrating their operations only slowly. Until the joint operations have reached the point that they have become a ‘single air carrier,’ they need not merge their seniority lists. Midwest, by contrast, integrated operations with Republic, Chautauqua, and Shuttle America expeditiously; that’s why it was able to give up its certificate and planes, while transferring gates and landing slots for use by the other jointly operated carriers. Midwest and Republic engaged in a ‘covered transaction.’ The later wasting away of Midwest illustrates the completeness of the integration; it does not negate the statute’s coverage.”

Reversed and Remanded.

11-1921 Committee of Concerned Midwest Flight Attendants for Fair & Equitable Seniority Integration v. International Brotherhood of Temasters Airline Division

Appeal from the United States District Court for the Eastern District of Wisconsin, Randa, J., Easterbrook, J.

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