Judge Won’t Order Pilots Back to Work : Eastern Warns That Only Alternative Is Bankruptcy Filing

MIAMI —  A federal judge on Tuesday refused to order Eastern Airlines pilots back to work, apparently setting the stage for a threatened bankruptcy court filing by the airline.

The court decision came as an attempt by the 41,000-member Air Line Pilots Assn. to launch a job slowdown in support of the Eastern strike fizzled. A spokesman for the Federal Aviation Administration said the agency had received “a couple dozen reports of incidents” out of 20,000 airline flights on Tuesday.

U.S. District Judge Edward B. Davis in Miami rejected the airline’s request for a ruling that Eastern’s 3,600 pilots were engaging in an illegal separate strike rather than simply honoring picket lines set up Saturday by striking machinists and baggage handlers.

Lawyer’s Testimony

Earlier in the day, an Eastern lawyer said in court that the airline would have no choice but to enter bankruptcy proceedings if the judge didn’t impose the emergency order.

“We have a situation of no revenues and immense expenses,” said David L. Ross, the Eastern lawyer. “If this court does not bring the pilots back to work immediately, the simple fact is that Eastern Airlines will have no alternative but to seek the protection of the bankruptcy courts of the United States.”

To underscore its position, Eastern announced 2,500 additional layoffs of non-union personnel Tuesday, blaming pilots for leaving it with “no business on the books.”

Eastern has just 1,500 workers on the job compared to 31,200 before the strike, said Joe Leonard, Eastern’s vice president and chief operating officer.

Public Safety Concerns

The job action by ALPA, in which pilots were encouraged to fly by instruments even in clear weather, was described by Roger Hall, first vice president of ALPA, as an effort to “ensure the safety of the traveling public” at a time when the nation’s air passenger service had been disrupted by the Eastern strike.

But labor experts saw it as a tactic to pressure President Bush to call for a 60-day cooling-off period in the strike, which would allow the machinists to return to work at their current wages. Eastern wants a $150-million wage cut from the International Assn. of Machinists and Aerospace Workers, and has maintained that continuing to pay the machinists at current rates would quickly bankrupt the airline.

Bush told a press conference Tuesday that “I continue to feel it would be inappropriate for the government to intervene and impose a solution.” He urged the pilots “not to make . . . the innocent traveling public a pawn in this dispute.”

Reports indicated that some pilots were deliberately taxiing their planes unusually slowly, using the full length of the runway on landing instead of pulling aside on high-speed turnoffs, and repeating--sometimes incorrectly--verbal instructions received from air traffic controllers, officials said.

“It’s been an annoyance, but it doesn’t seem to have created any problem,” said John Leyden, a spokesman for the FAA.

Airports in Los Angeles, New York, Atlanta, Philadelphia, Indianapolis, Kansas City, Mo. and Phoenix reported few or no delays because of the slowdown.

Eastern didn’t immediately say if it would appeal the judge’s ruling allowing its pilots to remain on the picket line. There also was no immediate word on when the airline would go into bankruptcy court, or what type of proceedings it would file.

Legal experts said Eastern most likely would file for protection from creditors under Chapter 11 of the federal bankruptcy law. That would allow the airline to continue its few remaining operations under current management and protect it from creditors while it comes up with a plan for reorganization.

$2.5-Billion Debt

The airline, which lost $462 million in 1988, currently is about $2.5 billion in debt.

If Eastern does go into bankruptcy court, it would be the second time that Frank Lorenzo, Texas Air Corp.’s chairman, took one of his airlines into bankruptcy proceedings. Texas Air also owns Continental Airlines. In 1983, Continental filed for protection from creditors under Chapter 11. Lorenzo used the bankruptcy filing to cancel union contracts with Continental’s pilots, flight attendants and machinists. Continental has since emerged from bankruptcy proceedings, and the employees have been working at sharply reduced wages, without union contracts.

But that move prompted an outcry by organized labor. In response, Congress changed the bankruptcy laws to make it more difficult for corporate management to use the bankruptcy courts to break union contracts. So it is by no means clear whether a bankruptcy filing will enable Lorenzo to expunge Eastern’s union contracts.

A machinists union source expressed skepticism that Lorenzo will take Eastern into bankruptcy, but said “if they (Eastern) go to Chapter 11, hallelujah, someone else will be looking over their shoulder.”

In issuing his ruling, Davis said the terms of the Railway Labor Act, which governs union-management relations at airlines as well as railroads, don’t allow him to grant an injunction forcing the pilots back to work. The act permits members of transportation unions to refuse to cross picket lines set up by other legally striking unions.

Charles E. Bryan, the head of Eastern’s machinists’ local, said he was delighted by the court ruling. “Thank God the judge was an honest judge and upheld the law,” he said.

John J. Bavis Jr., an Eastern pilot and chairman of the Eastern pilots’ ALPA master executive council, said he was pleased that the judge upheld the pilots’ right to observe the machinists’ picket lines. He said he hoped it would spur Bush, despite his stated reluctance, to establish an emergency board that would oversee a 60-day cooling-off period.

Legislation Advances

Meanwhile, a House subcommittee, voting mostly along party lines, gave first-stage approval to emergency legislation aimed at establishing such a board.

Although the measure probably would not survive a threatened presidential veto, Democratic sponsors and their labor allies said they hoped it would put pressure on both Bush and Eastern management to facilitate a solution.

By a vote of 21 to 12, the Public Works and Transportation subcommittee on aviation approved a bill requiring the President to appoint a board to review issues in dispute while Eastern resumed full operations.

In addition to threatening a veto of such legislation, the Bush Administration has threatened to introduce a bill prohibiting secondary boycotts by transportation unions in support of the Eastern strike.

Machinists at three suburban New York rail lines on Tuesday appealed a judge’s temporary order barring such walkouts. The judge earlier had extended his order until Friday.

An AFL-CIO official in Washington who requested anonymity indicated on Tuesday that the unions are stepping carefully when it comes to secondary boycotts. “We know we can do it only one time. After that, it’s gone,” he said, explaining that Congress almost certainly would move to ban the huge bargaining club--it is already banned in every other industry--if commuters erupted in outrage over widespread shutdowns of train service.

Pay Cut Refused

The strike at Eastern occurred because the machinists have refused to give in to Eastern’s demand that they accept an average pay cut of 15%. Eastern’s pilots and flight attendants three years ago accepted 20% pay cuts, but the machinists held out. Eastern claims that the airline in its present financial condition can’t afford the machinists’ salaries and benefits.

But the unions accuse Lorenzo of stripping the airline of profitable assets, including selling off its computer reservations system and the profitable Eastern shuttle serving New York, Boston and Washington. The sale of the shuttle to Donald Trump is still pending.

The machinists and pilots have said that they favor a bankruptcy filing. They believe it would give them a greater say in the restructuring of Eastern, and they believe that they would get more equitable treatment from a bankruptcy judge than from Eastern’s current management.

Staff writers Henry Weinstein in Los Angeles, Bob Secter in Chicago and Douglas Jehl and Paul Houston in Washington contributed to this story.