Inside Union Negotiations at Southwest Airlines

By Alison Datko

Originally published: theguardian.com, Thursday 3 April 2014 07.00 EDT

*Read this article on The Guardian website here.

A Southwest Airlines Boeing 737 at Taney County Airport, where it landed in error.

Photograph: Valerie Mosley/AP

Southwest Airlines is one of the world’s most admired companies. You know it well – it’s the one with rapping flight attendants and free cocktails on Valentine’s Day. It has the best customer service, the lowest baggage fees, the cleverest ticker symbol – LUV – and the most cheerful employees. The airline even has warm relationships with its unions.

Right?

Sort of.

The employees take pride in the jovial culture and camaraderie – but of late they seem to feel that their enthusiasm is under-appreciated and exploited, really, by headquarters. Thorny union negotiations – the first difficult ones in the company’s history – have made employees wonder if its Dallas-based executives are economizing at the expense of employee wages and happiness, drawing $805m in record profits for the company last year while salaries stagnate and pay increases languish. 

As a result, significant cracks have emerged in the previously cordial relationship between Southwest and its union, the Transport Workers Union (TWU), of late. In the past, they agreed on union contract agreements relatively easily – hence an abundance of happy employees. 

Since the latest contract became amendable in June 2011, however, the two parties have been deadlocked in exceptionally tense negotiations.

For now, workers remain protected by the old union agreement – but there are drawbacks. Until a new contract is signed, for instance, senior employees – those who’ve been with the company for 11 years or more – are stuck with stagnant salaries. 

For them, this summer marks four anniversaries of dedicated baggage handling with zero pay increases.

Local 555 president Charles Cerf thinks he knows the reason for the delay: the Southwest’s push to reduce its number of “career jobs” and make part-time workers 40% of the company’s workforce.

The most fraught disagreement between Southwest and its unions is over the issue of replacing career workers with part-time workers. 

After a few skirmishes between the company and its union over sick time, 

Southwest is now “doubling its efforts” to push for more part-time workers, Cerf said.

Southwest spokeswoman Brandy King says that the proposal is based on a need for flexibility. The airline hopes to call on part-timers during periods of unusually high activity, she says: “Current part-time legacy work limitations severely constrain how we could further optimize our network and schedules to better match our customers’ desires.”

This is emotional territory for Southwest employees. The threat of more part-time jobs suggests the beginning of the end of an era. Part-timers are inherently less vested in the company and its culture than their full-time counterparts, say union members.

They are worried that once again, it comes down to money. Full-time employees can claim spouses and children on their medical coverage, while their part-time counterparts cannot – leading some to suspect that low medical coverage costs are the driving force behind the proposal. 

As wage earners around the nation have surely noticed, this cost-cutting practice is not uncommon, especially within corporate environments. 

However, it does seem hard for employees to understand a justification for cuts, given the fact that the airline announced record profits last year.

The unusually sticky union negotiations recently are concerning for those who’ve long viewed the airline as a shining beacon of compassion in a nationwide fog of corporate greed and corner-cutting.

Unsurprisingly, a switch from career jobs to part-time workers is a proposal the union is not eager to entertain. Southwest’s workers are used to seeing the company’s success tied to their own in a “people before profit” philosophy. 

“Remember, bags fly free – on OUR backs,” said Phil McNally, Local 555 District 2 representative.

Despite the union’s range of complaints, Southwest spokeswoman Brandy King says she would not describe the company’s relationship with TWU as strained. 

“As a company, we are making changes to remain competitive, but this process creates more discussion points during negotiations,” King says.

For an insider’s perspective, I spent a day on the tarmac at Orlando International Airport, talking to Southwest employees on their own turf. 

I was escorted through security by a member of TWU Local 555, the branch of the union that represents Southwest Airlines (SWA) ground operations. We spent the morning in the break room, where union members were gathered for the organization’s annual Unity Day. I shook hands with Local 555’s national representatives, who’d flown in from Dallas for the occasion, and listened as they each gave brief presentations.

Much of the discussion revolved around objectionable treatment of employees. This is, no doubt, standard union discourse in any industry – but it is wildly uncharacteristic for Southwest in particular.

I asked Local 555 financial secretary Ralph Darnell about the seemingly dwindling morale. 

“Sometimes we’re our own worst enemies,” he explained. “Race horses like to run. Hunting dogs like to hunt. And we’ve been taught to do more with less. It’s easy to get caught up in the romanticism of the old Southwest.”

Traditionally, Southwest employees are some of the happiest around, thanks to the company’s founder Herb Kelleher, who believed in an “employees come first” approach to business. Motivated employees create happy customers, which in turn please shareholders. Additionally, Kelleher implemented personality-based hiring practices and promoted the “golden rule”, which, over the years, has become a sort of unofficial mantra among SWA employees.

There’s another hinge for the company’s tight-knit culture. Southwest was built on full-time “career jobs”, or jobs that provide security for families and, in turn, instil employees with a vested interest in the company’s success. 

Career jobs pay for college tuition and mortgages. They also include break room potlucks and flower deliveries for injured co-workers. They have put smiling faces on flight attendants and customer service agents, and provide passengers with positive, recommendation-worthy travel experiences.

“We hire for attitude and train for skill,” explains Southwest spokeswoman Allison Osborne. “Our customer service and our culture are two of the strongest points that we’re proud of, and that we consciously put a lot of time, effort and money behind.” 

Osborne, who supports Southwest’s Culture Services Department, agreed that the airline’s roots include “taking care of employees first”.

It’s common for employees to compare current Southwest CEO Gary Kelly with his widely adored predecessor. Kelleher, the founder of Southwest, stepped down in 2008, and former chief financial officer and “numbers man” Kelly has since taken the reins.

In the midst of Unity Day activities, I listened as employees nostalgically referred to the “Herb Era” and pointed out the differences between Kelleher and Kelly. 

“Herb was a people person,” recalled Phil McNally, the union representative. “If he met you once, he remembered your name for life.” 

A numbers man has his place in a Fortune 500 company, McNally admits. “His financial expertise helped make the company successful. But you have to acknowledge the people who make the money for you.”

Once upon a time, employees boasted about Kelleher’s open-boardroom-door policy; in recent years, however, those doors seem closed. Employees still get anniversary cards from headquarters these days, but they are coolly stamped with Kelly’s signature. 

Less friendly are the memos like the one issued earlier in the year, regarding the company’s notorious January meltdown on Chicago’s snowy runways. Company representatives issued a notice telling employees that anyone who called in sick during a period of unusually high nonattendance without providing a doctor’s note could face disciplinary action, “up to termination”. 

Local 555 is pursuing a grievance process based on the claim that its contract does not allow the company to make such demands. 

Southwest’s official statement regarding the meltdown, said King, is: “We were dealing with unusual and extreme conditions at [Chicago’s Midway airport], working to adapt to one weather event after another. A combination of the holiday season and severe weather exhausted our staffing resources.” 

Regarding the extreme conditions, spokeswoman Bridget Osborne acknowledged that “there were some folks who just physically couldn’t make it to work”.

Around noon, Cerf called for the final event of the day: a J-line meeting, named for the stretch of painted concrete on which it’s held. We gathered on the tarmac, a sea of blue uniforms and orange safety vests visible from the windows of a nearby aircraft. That’s the point – a display of unity. A message to passengers that the romanticism of the good old days, before stalled contracts and slight-of-hand cutbacks, indeed lives on.

Standing atop a belt loader, clipboard in hand, Cerf faced the crowd. “We want career jobs,” he shouted, his voice booming above the roaring jet engines in the distance. “And equal benefits for everyone!” 

His audience applauded enthusiastically. On the J-line, camaraderie continues to thrive.