Medical Malpractice

How Retiree Medical Benefit Language was Lost During the Restructuring

The language protecting Retiree Medical Benefits was apparantly lost during the Restructuring. The company appears to have known about it, but it only become public knowledge when a retiree inquired about the drastic changes to the Retiree Plan on a chat board. The company and union have agreed to address the loss of language through the next round of negotiations, but that merely suggests that the comany is willing to give us back that which we already had in exchange for something else.

Medical Malpractice
By Rock Salomon
February 3, 2007

As you may have heard, APFA reached another Presidential Grievance Settlement with AA in January, this one over the company’s January 2006 changes to the Retire Health Plan.

In short, the company made changes to the Retiree Medical Benefits Plan effective January 1, 2006, and made notice of the said changes via JetNet and Flagship News in September 2005. We, the APFA membership, only became aware of these changes via a chat board in December 2006, and that was only because an APFA retiree joined the chat board to inquire about the changes.

At issue is whether retiree medical benefits are contractual or not. The union's position is that the Retiree Medical Benefits Plan is a contractual issue and not amendable until negotiations. The company's position is that the Retiree Medical Benefits Plan is not incorporated into either the 2001 Collective Bargaining Agreement (CBA) or the 2003 Restructuring Participation Agreement (RPA).

Though this Settlement might seem like the first real victory for APFA since the Hutto-Blake Administration assumed office in 2004, the Settlement itself leaves some very important questions unanswered: mainly, why is the company claiming that the Retiree Medical Benefits Plan is non-contractual? What happened to the language? We know it existed, so where did it go?

The company claims that:

"…there has been no contractual violation in this matter. Attachment K of the 2003 RPA incorporated only the "Standard Medical and Dental Plan for Flight Attendants" into Article 35 of the CBA. It did not incorporate the Retiree Medical Plan…."

The RPA Letter of Agreement signed by Jeff Bott and witnessed by Lenny Aurigemma, Susan M. French, Patt A. Gibbs Patrick Hancock and Becky Kroll states:

"It is hereby mutually agreed that the Standard Medical and Dental Plan for Flight Attendants shall be incorporated into Article 35 of the Collective Bargaining Agreement…."

As you can see, the word "Retiree" is not mentioned, which leads me to believe that the company's assertion is correct.

So what happened? What happened to the language protecting Retiree Medical Benefits? We know that there was language. It read like this in 1995:

"The Health Benefit Plan for retirees, other than Article 30 retirees and those flight attendants who elect to take Appendix T, shall be the retiree health plan for pilot employees of American Airlines represented by the Allied Pilots Association ("Pilot Retiree Plan"). This shall include any changes, modification and/or amendments to the Pilot Retiree Plan, including changes, modifications and/or amendments to contributions made by retired pilots."

As you can see, the 1995 language regarding the Retiree Medical Benefits Plan for flight attendants had clear language; it was tied directly to the Pilot's Retiree Plan. But in 2001 APFA loosened the language when it incorporated prefunding and tied the plan to the Ground Workers Retiree Plan. The 2001 language reads:

"Effective January 1, 2002. Flight Attendants will participate in American's prefunding program under the terms and conditions in effect for American's ground personnel as of June 30, 2001, whereby employees contribute toward the cost of Retiree Medical Plan coverage during their active status. Flight Attendants who elect not to prefund will not be eligible for Retiree Medical Plan coverage at retirement."

What I personally find so fascinating about this issue, more than the mystery surrounding the missing contract language, is how APFA portrayed the 2003 RPA Medical Benefits Changes as an improvement over anything we previously had. Yes, even though flight attendants were going to have to continue prefunding their Retiree Benefits with income that was greatly reduced by the pay cuts imposed on them against their NO vote of April 15, 2003, Jeff Bott, former APFA VP, considered this an improvement.

So was this another empty bAAg???

When we consider that AA and APFA " agree to reserve their respective positions...with respect to the question of whether the Retiree Standard Medical Plan was incorporated into the CBA in the RPA..." (in other words, agree to disagree) and " agree to attempt to resolve this question during the next round of collective bargaining," (in other words, waste valuable resources renegotiating the blunder) I would have to say yes—absolutely.

What we do know about the 2003 changes comes from an article Jeff Bott wrote in Skyword. Mr. Bott wrote:

"The collaboration between seasoned APFA representatives and experts of the highest caliber paid off. We put together a proposal that gave the company $8 million in savings for 2004, no more, no less, and provided significant benefits for flight attendants."

Seasoned reps??? Experts of the highest caliber??? If these reps were so seasoned, how then did the language protecting retiree medical benefits disappear? I believe the only thing accurate about this statement is the fact that APFA "gave" the company millions in savings.

Mr. Bott continues:


I put together what I consider a dream team to work with me on this project. I would like to thank them publicly for the participation, commitment, and for sharing their collective knowledge and wisdom: Susan French, Patt Gibbs, Patrick Hancock, and Becky Kroll. We could not have put this deal together without the support and participation of the Division Representatives: Lori Bassani, Jeff Crecelius, Brett Durkin, Greg Hildreth, Leslie Mayo and Linda Richardson. Thanks also to Executive committee member Lenny Aurigemma and Tony Leonhardt (LAX).

I could say something here, but I believe the words "dream team" say it all; rather than hiring professionals to assist us, APFA Leadership once again chose to save money by using flight attendants.

When will we ever learn—we get what you pay for? Every time APFA opts to save money by not hiring professionals, the APFA membership pays for it and pays dearly. We ALWAYS get the short end of the stick.

We we consider that 800 or so members of AMR's senior management team are going to be sharing approximately $210,000,000 in bonuses come April, there's no denying that the flight attendants were almost duped. I say "almost" because we said NO on 4/15/03. Even without professionals, the flight attendants could see the writing on the wall. And so did our union leadership. They knew about the bonus plans back in 2003. And because of their unwillingness to hire any professionals, AMR execs are going to be receiving lavish bonuses for TAKING money rather than MAKING money.

Why is this stuff even important to us? I answer this question by asking this: Do flight attendants want the very people who gave it all away negotiating for them in the future? Remember, Tommie Hutto-Blake's campaign slogan was "He gave it away; We want it back." So far, three years later, Ms Hutto-Blake hasn't gotten us anything back that didn't cost us something else.

So who really does represent us? That's a topic for another newsletter.