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Law360 (May 6, 2020, 4:59 PM EDT ) United Airlines Inc. has been hit with a lawsuit in New York federal court claiming the company reneged on its promise not to cut workers' pay rates or benefits in exchange for receiving federal relief funds less than two weeks after it accepted $5 billion under the coronavirus rescue package.
In their complaint on Tuesday, the International Association of Machinists and Aerospace Workers, AFL-CIO and IAMAW District Lodge 141 alleged that United breached federal and state contract laws and violated the Railway Labor Act by attempting to force roughly 27,000 passenger service and fleet service employees into part-time positions.
Contrary to United's contention, the move will slash the workers' pay by at least 25%, reduce their benefits and result in furloughs — measures the airline agreed not to take in a payroll support program agreement with the U.S. Department of the Treasury, according to the union.
"United's plan does violence to the purpose and intent of the PSP agreement," the union said.
The union further argued that United's decision to push the workers into part-time positions ran afoul of the collective bargaining agreements covering the workers in violation of the Railway Labor Act.
When the airline floated the plan as a potential cost-cutting measure in case it was denied relief under the Coronavirus Aid, Relief and Economic Security Act, it conceded that it couldn't make the change without the union's consent, the complaint said.
Yet, United announced that it was unilaterally moving forward with the same plan after receiving the coronavirus relief funding and agreeing to maintain pay rates and benefits before Sept. 30, according to the union.
The union said that the airline asserted that its actions were in line with the CARES Act because it wasn't cutting "pay rates." But the reductions in hours would result in a reduction in pay and benefits, according to the complaint.
United gave the workers until May 13 to make an "irrevocable decision" of being reduced to part-time, retiring without recall rights, leaving the company without recall rights, or taking a furlough with furlough pay and recall rights, the complaint said.
The suit asks the court for a temporary restraining order keeping the company from holding workers to the deadline and a preliminary injunction barring United from moving forward with the mass reduction, among other things.
Counsel and representatives for the parties didn't respond immediately to requests for comment.
The union is represented by John J. Grunert and Jeffrey A. Bartos of Guerrieri Bartos & Roma PC.
Counsel information for United wasn't available on Wednesday.
The case is International Association of Machinists and Aerospace Workers AFL-CIO, et al. v. United Airlines Inc., case number 1:20-cv-02045, in the U.S. District Court for the Eastern District of New York.
--Editing by Nicole Bleier.
For a reprint of this article, please contact reprints@law360.com.
