Seventh Circuit Gives Guidance on McCaskill-Bond Amendment to Federal Aviation Act

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The McCaskill-Bond Amendment to the Federal Aviation Act provides that a merger of air carriers requires the new entity to merge the seniority lists of the two carriers’ employees. Republic Airways acquired Midwest Airlines, and thereafter the Teamsters Union, which represented the flight attendants at Republic’s older carriers, refused to integrate the seniority lists for flight attendants and placed Midwest’s flight attendants at the bottom of the seniority roster. A group of Midwest flight attendants challenged the action, asserting that it violated the amendment. The Teamsters argued that, at the time of acquisition, Midwest was on the verge of bankruptcy, that Republic abandoned Midwest’s regulatory certificate, and therefore Midwest was not an “air carrier” for the purpose of the amendment. The U.S. District Court for the Eastern District of Wisconsin characterized the transaction as merely Republic’s acquisition of some of Midwest’s assets, but not the acquisition of an air carrier for the purposes of the amendment, thus holding that integration of seniority lists was not required.

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