Analysis: Judge’s ruling that blocks Allegiant pilots from striking isn’t a surprise

Allegiant Air pilots picket in front of the Allegiant Air headquarters in Summerlin on Tuesday, Jan. 13, 2015.

When Allegiant Air pilots lost in court last week in their attempt to go on strike, the airline dodged huge financial losses and a lot of angry fliers, while the aviators refused to give up their labor fight.

Perhaps this shouldn’t be much of a surprise.

Airline pilots face more barriers than almost any other set of U.S. workers to legally go on strike, experts say, and such walkouts rarely occur. One lasted just minutes before then-President Bill Clinton stepped in and prevented a work stoppage.

Allegiant pilots’ legal defeat, however, has not deflated their union, the Teamsters, who promised to appeal and have not dialed back their rhetoric toward the airline.

U.S. District Judge Andrew Gordon on Friday granted Las Vegas-based Allegiant a preliminary injunction, barring the Teamsters and its members from striking, picketing, or taking part in a sick-out, slow-down or other “concerted action” that aims to disrupt the discount carrier’s regular operations.

His ruling lifted the pilots’ month-old threat, at least for now, off Allegiant, which flies leisure travelers from small, underserved cities to Las Vegas and other warm-weather vacation spots with almost no competition on its routes.

The strike-that-never-was had an impact, though. Allegiant’s once ever-soaring stock price has dropped sharply since the aviators threatened to walk.

Moreover, the Federal Aviation Administration stepped up scrutiny of Allegiant due to the labor spat. Company officials said last month that the FAA planned to block Allegiant from flying to more airports beyond its existing route network and from flying additional planes beyond its current fleet until the outcome of the litigation emerged.

Allegiant claimed a strike would cost it millions of dollars per day and erode its standing with passengers, who “would certainly be less likely to fly Allegiant in the future.”

Strikes are designed to force companies — fearful of a shutdown and the ensuing financial losses — to give labor groups what they want. Gordon sided with the airline, citing the "potential harm to Allegiant's reputation" and adding that canceled flights lead to “unhappy customers, particularly where alternative options are not readily available."

A strike’s potential harm to Allegiant “is significant,” he wrote, but the possible damage to pilots “is negligible.”

On Saturday morning, an hour before Allegiant announced the ruling, Teamsters officials said they would appeal the decision. The union described Allegiant as a company “that has blatantly violated” workplace rules.

“For our airlines to run safely and efficiently, pilots must have a voice,” Allegiant pilot and union leader Cameron Graff said in the news release.

U.S. labor law requires airlines and unions to follow a lengthy list of steps — negotiations, mediation, arbitration, cooling-off periods and possible White House intervention — that can last several months, if not a year or more, before both sides can legally pull the trigger on such threats as a strike or a lockout.

The Teamsters argued that Allegiant illegally replaced workplace rules and benefits while the two sides negotiated a collective bargaining agreement. This gave the pilots a right to strike, the union claimed.

Allegiant argued a strike would be illegal because the Teamsters had not “exhausted” the dispute-resolution steps called for by the Railway Labor Act, which covers the airline industry.

In his ruling, Gordon wrote that he doesn't intend "to diminish the obvious frustration" Allegiant aviators have with the current pilot-scheduling system — the biggest bone of contention between the union and the airline.

But, he wrote Allegiant "has tried" to teach its pilots about the system and has developed, with their input, a way to make it more transparent and predictable.

All told, "it would be unlawful for the pilots to strike at this point," Gordon wrote.

The Railway Labor Act was designed to ensure uninterrupted interstate commerce, and the U.S. Supreme Court has described the mandated steps “as ‘purposefully long and drawn-out,’” said employment lawyer E. Scott Smith, a partner with Fisher & Phillips in Atlanta.

"It makes the parties jump through all those hoops," Smith said.

Violence was not uncommon in railroad labor disputes in the late 1800s and early 1900s. With unions and companies “beating each other up,” Congress passed the labor act in 1926 to find ways to resolve disputes in an industry critical to the U.S. economy, said lawyer Gary Kaplan, a partner with Seyfarth Shaw in Chicago.

Airlines were added to the law in 1936. Just four workers strikes occurred at major U.S. carriers between 1990 and 2002, with six presidential interventions in that time to prevent walkouts, according to a 2003 report from the U.S. agency now known as the Government Accountability Office.

American Airlines pilots, for instance, went on strike in February 1997, but Clinton intervened minutes later, ordering the 9,000 aviators back to work and convening an emergency board to review the dispute.

The last pilots strike at a major U.S. carrier was in 2010, when Spirit Airlines’ 2,600 aviators stopped working for five days.

The labor law often "wears parties out,” prompting them to throw in the towel and reach an agreement, said attorney Randy White, a partner with Conner & Winters in Dallas.

That didn’t happen with Allegiant.

Its pilots voted in August 2012 to join Teamsters Local 1224 but still do not have a collective bargaining agreement under the union.

The Teamsters sued Allegiant in November 2013 to restore workplace rules and benefits while they negotiated a new deal, and Judge Gordon ordered Allegiant last July to bring some back, but not everything the union had sought. Allegiant appealed, and the case remains open.

Meanwhile, the airline and the union have been in federally monitored mediation since April 2014, court records show.

Allegiant pilots voted in mid-January to authorize a strike, and the Teamsters announced April 1 that the airline's more than 500 aviators would walk off the job the next day.

But hours later, U.S. District Judge Gloria Navarro granted Allegiant a temporary restraining order, halting the plans.

Shares of Allegiant Travel Co., the carrier’s parent, dropped nearly 6.6 percent that day to $179.65 apiece.

The stock closed Monday at $159.92, up 1.4 percent from Friday but down 19 percent from a high of $197.33 on March 17.

Last Friday, before Gordon issued his ruling, at least one airline-industry analyst expected the judge to rule in Allegiant’s favor.

“You can’t just decide next Tuesday you’ll go on strike,” said Bob McAdoo, of Imperial Capital.

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