For over 73 years labor-management relations in the U.S. airline industry have been governed by the Railway Labor Act (45 U.S.C. §§151-188). In April of 1936 the Act was amended to add the airline industry to the jurisdiction of the statute. The Act previously had applied only to the nation's railroad industry under the original 1926 legislation.
Airline Collective Bargaining Process
The process for developing an initial collective bargaining agreement, or revising an existing agreement, is specified in significant part by the Railway Labor Act. See the RLA collective bargaining flowchart which depicts the Act's bargaining processes.
In summary, representatives of labor and management initially must file written demands on each other regarding the new terms and conditions that they propose for their labor contract. Until they reach agreement, or the RLA's dispute resolution processes have been exhausted, neither party to the negotiations may alter the status quo, such as by a labor strike or by the implementation of management's proposals.
After their bargaining proposals have been exchanged, the parties must meet and confer in an attempt to reach a voluntary agreement. Either party may invoke mediation assistance with the National Mediation Board. In rare labor emergencies, the NMB may trigger the mediation process itself.
Once mediation commences, the National Mediation Board has broad discretion under the present terms of the Railway Labor Act regarding whether and when the RLA's mediation process will terminate. As long as the NMB maintains a matter within its mediation jurisdiction, neither labor nor management lawfully are free to engage in self-help, such as by a labor strike or by the implementation of management's proposed rates of pay and working conditions.
Unless labor and management reach an agreement during the mediation process, the NMB will at some point in the mediation process offer the parties the opportunity to arbitrate the unresolved issues. If either party refuses the offer, which is the norm, a thirty-day "cooling-off" period commences. At the end of this time, the parties generally are free to exercise the full range of non-violent self-help options.
In statistically limited cases, upon a statutory notification by the NMB, the President will establish a Presidential Emergency Board to address the dispute further. When this is done, the mandatory status quo period of the Act is extended - generally for an additional sixty days.
At various times, both labor and management have criticized the NMB regarding its administration of the mediation process - particularly the timing of the termination of mediation. As a practical matter, one of the parties to a labor-management dispute generally is more interested in changing the current wages and working conditions, while the other party prefers to maintain the existing terms in the collective bargaining agreement. In large part, the parties' preferences depend on the prevailing economic conditions.
If the economy is expanding, labor generally is pressing for wage increases and other economic enhancements. In a constricting economy, airline management frequently seeks economic concessions or other relief from labor. Accordingly, in an expanding economy, labor generally seeks a prompt release from NMB mediation and in a constricting economy management frequently is more interested in the termination of mediation. As a consequence, the NMB typically is criticized for "delaying" a release from mediation by the faction that favors an economic revision to the existing collective bargaining agreement at that particular time.
Airline Contract Administration Process
Once a collective bargaining agreement is in place, the Railway Labor Act requires that labor and management follow a dispute resolution process to resolve differences regarding the meaning and implementation of the agreement. See the RLA contract administration flowchart which depicts these processes.
In summary, labor and management must first attempt to resolve the dispute in direct meetings - following a process specified by the applicable collective bargaining agreement. If these initial efforts are exhausted without success, then either party may invoke an arbitration process. In the airline industry, the arbitration tribunals established by the parties generally are called system boards of adjustment. An equal number of partisan members of such boards are appointed by labor and management. If a majority of the partisan members of the system board votes to resolve the issue, the board's decision is final and binding at that stage of the process.
In many instances, the partisan members of the system board deadlock (by a tie vote of the board) and a neutral arbitrator is then selected and empowered to decide the case. The arbitrator's decision (or partisan members' decision) is final and binding with only extremely limited judicial review available under the RLA. The federal courts have applied the narrow standards of review specified in Section 153, First (q) of the act (45 U.S.C. §153, First (q)) to airline industry system board arbitration decisions.