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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at [http://www.house.gov/transportation]. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.







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Printed for the use of the

Committee on Transportation and Infrastructure


BUD SHUSTER, Pennsylvania, Chairman

THOMAS E. PETRI, Wisconsin
HOWARD COBLE, North Carolina
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JOHN J. DUNCAN, Jr., Tennessee
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
JOHN L. MICA, Florida
SUE W. KELLY, New York
RAY LaHOOD, Illinois
FRANK RIGGS, California
CHARLES F. BASS, New Hampshire
JACK METCALF, Washington
ROY BLUNT, Missouri
JOSEPH R. PITTS, Pennsylvania
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JOHN R. THUNE, South Dakota
CHARLES W. ''CHIP'' PICKERING, Jr., Mississippi
JON D. FOX, Pennsylvania
J.C. WATTS, Jr., Oklahoma

NICK J. RAHALL II, West Virginia
ROBERT A. BORSKI, Pennsylvania
ROBERT E. WISE, Jr., West Virginia
BOB CLEMENT, Tennessee
ELEANOR HOLMES NORTON, District of Columbia
PAT DANNER, Missouri
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JAMES E. CLYBURN, South Carolina
BOB FILNER, California
FRANK MASCARA, Pennsylvania
GENE TAYLOR, Mississippi
BILL PASCRELL, Jr., New Jersey
JAY W. JOHNSON, Wisconsin
JAMES P. McGOVERN, Massachusetts
TIM HOLDEN, Pennsylvania

Subcommittee on Aviation

JOHN J. DUNCAN, Jr., Tennessee, Chairman

ROY BLUNT, Missouri Vice Chairman
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RAY LaHOOD, Illinois
CHARLES F. BASS, New Hampshire
JACK METCALF, Washington
JOSEPH R. PITTS, Pennsylvania
CHARLES W. ''CHIP'' PICKERING, Jr., Mississippi
JON D. FOX, Pennsylvania
J.C. WATTS, Jr., Oklahoma
BUD SHUSTER, Pennsylvania
(Ex Officio)

NICK J. RAHALL II, West Virginia
PAT DANNER, Missouri
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JAMES E. CLYBURN, South Carolina
(Ex Officio)



Text of H.R. 991, To amend the Railway Labor Act concerning the applicability of requirements of that Act to United States air carriers and flight deck crews engaged in flight operations outside the United States


    Babbitt, Capt. J. Randolph, President, Air Line Pilots Association, and Vice President, Transportation Trades Department of the AFL–CIO'S, accompanied by Russell Bailey, Counsel, Air Line Pilots Association

    Borer, David A., General Counsel, Association of Flight Attendants, ALF–CIO

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    Cronin, Capt. Michael P., Chairman of the Legislative Affairs Committee for the Allied Pilots Association

    Petersen, Scott C., Counsel for the Fedex Pilots Association

    Taylor, Steven H., Managing Attorney for Labor and Employment, Federal Express Corporation


    Costello, Hon. Jerry F., of Illinois

    Cramer, Hon. Bud, of Alabama

    Lipinski, Hon. William O., of Illinois

    Poshard, Hon. Glenn, of Illinois


    Babbitt, Capt. J. Randolph

    Borer, David A

    Cronin, Capt. Michael P
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    Petersen, Scott C

    Taylor, Steven H


    DeFazio, Hon. Peter A., a Representative in Congress from Oregon, statement of Mark J. Abbott, Pilot, Federal Express, Subic Bay, Philippines

    Taylor, Steven H., Managing Attorney for Labor and Employment, Federal Express Corporation, Analysis of Proposed Extraterritorial Extension of Railway Labor Act



Driscoll, Edward J., President and Chief Executive, National Air Carrier Association, Inc.:

Letter to Rep. John J. Duncan, Jr., September 10, 1997

Statement , October 5, 1994

Gelband, Stephen L., Esq., Hewes, Morella, Gelband & Lamberton, P.C., representing Tower Air, Inc., statement, October 5, 1994
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Pollard, Charles W. , President, World Airways, Inc., letter to Rep. Jim Oberstar, September 30, 1994

    Hedges, Denise, President, Association of Professional Flight Attendants, letter, September 8, 1997

    Nicklas, Bob, Acting Director, Government Affairs, International Brotherhood of Teamsters, letter to Rep. Duncan, September 9, 1997




U.S. House of Representatives,

Subcommittee on Aviation,

Committee on Transportation and Infrastructure,

Washington, DC.

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    The Committee met, pursuant to call, at 2 p.m. in room 2167, Rayburn House Office Building, Hon. John J. Duncan (chairman of the subcommittee] presiding.

    Mr. DUNCAN. The Committee will be in order.

    Today's hearing deals with a technical, but very important aspect of labor law, the extent of the coverage of the Railway Labor Act.

    I certainly want to thank everyone for being here with us this afternoon.

    This Act, the Railway Labor Act, governs labor relations in the airline industry within the United States. Some have questioned whether or not that should also apply to U.S. airline operations outside of this country.

    Our distinguished colleague and member of the Subcommittee, Mr. Rahall, believes that it should, and he has introduced a bill, H.R. 991, that would accomplish this. I understand that this legislation now has some 77 co-sponsors.

    On the other hand, there are some who question whether it should—it would be appropriate to extend the coverage of U.S. labor law outside the United States. These people are concerned that doing so could put our airlines in the middle of a conflict between the U.S. and a foreign government over whose labor law should apply.

    They also say that H.R. 991 is inconsistent with our bilateral aviation agreements with other countries which say that that host country's labor laws will apply.
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    It is my understanding that other labor laws, such as the Fair Labor Standards Act, do not apply outside the United States.

    The opponents of this bill would prefer that the applicable law be a matter of negotiations between the parties. This issue has increased in importance in recent years for several reasons:

    For one, the courts decided in 1991, in a case involving Pan Am and its flight attendants, that a labor agreement between the two of them in Germany could not be enforced because the Railway Labor Act did not apply there. However, the court stated that Congress had the power to revisit this issue.

    H.R. 991 would, in fact, overturn this decision and allow contracts made between labor and management in this country to be enforced in a foreign country.

    In addition, H.R. 991 would also apply all of the collective bargaining mediation, arbitration and cooling off procedures of the Railway Labor Act to U.S. airline employees based overseas.

    Another reason why this issue is significant is that international aviation is becoming increasingly important to airlines. With skies opening up around the world, foreign air travel is becoming a big growth area and profit center for our air carriers.

    Airlines such as United, Northwest, Federal Express and others are establishing crew bases overseas. I believe that if this trend continues, the question of the Railway Labor Act's coverage could soon come to a head.
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    So we appreciate the willingness of FedEx, pilot representatives and flight attendant representatives to come before us this afternoon to discuss this complex and very important issue.

    I would also note that the State Department and the Department of Transportation were also invited to testify. However, both departments apparently at this point feel this is a somewhat controversial issue and I suppose have not fully determined their position as of this date.

    Hopefully, the Subcommittee will receive some information, at least in writing, from these departments in the very near future.

    I will now yield to my good friend and very distinguished ranking member of the Subcommittee, Congressman Lipinski.

     MR. LIPINSKI. Thank you, Mr. Chairman.

    Mr. Chairman, I will be brief. I have a statement that I would like to put in the record without any objection, and I would simply like to say that I commend Congressman Rahall for again introducing this important piece of legislation into the 104th Congress.

    I am proud to be a co-sponsor of H.R. 991. I look forward to all the testimony today, both the pro and the con. I doubt it will change my position on it, but I am always trying to learn new and interesting things.
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    I yield the balance of my time to the sponsor of this piece of legislation, my very good friend, Congressman Rahall.

    [The prepared statement of Mr. Lipinski follows:]

    [Insert here.]

    MR. RAHALL. Thank you very much, Mr. Lipinski, and I want to thank you, our Subcommittee Chair, and my good friend, Jim Duncan, for agreeing to hold today's hearings on H.R. 991, a bill that, as you have mentioned, I have introduced to amend the Railway Labor Act.

    Mr. Chairman, I would like to note for the record and very happily note that this legislation now has 91—I am sorry—81 co-sponsors, may have 91 before the day is over, because the list is growing daily, and it also has the support of our other independent pilot unions, in addition the Airline Pilot's Association.

    For 61 years, since 1936 when Title II was added to the RLA to ensure that U.S. pilots would receive the benefits of U.S. labor laws while engaged in interstate and foreign commerce, no problem has evolved with any foreign government with respect to whether their labor management laws applied to those pilots.

    The problem that has arisen, however, has been in recent court cases where it has been ruled that the RLA does not apply to certain employees who are engaged in overseas flights.
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    The court decisions have suggested, Mr. Chairman, the need to clarify the RLA if the courts are going to be called upon in the future to resolve these disputes. That is what this legislation will do, simply clarifies that the RLA applies to flight deck crew members employed by U.S. carriers, regardless of whether the flight deck crew members are based and perform their duties within or outside the U.S.

    Now you may ask yourself, if the RLA does not cover pilots engaged in modern day international aviation, then what does the labor law do?

    The answer is, none. In 1936, when the RLA was first amended to insert Title II covering airline employees, it was done at the behest of ALPA. Today, six decades later, they are on pilots associations asking simply for Congress to reaffirm that the 1936 labor law applies to U.S. pilots.

    The 1936 amendment reads that the RLA is amended to cover, and I quote, ''Every common carrier by air engaged in interstate or foreign commerce, and every carrier by air transporting mail for or under contract with the United States government, and every air pilot who performs any work as an employee of such carrier or carriers,'' end quote.

    And as I asked earlier, if the RLA does not cover pilots, what labor law does cover pilots?

    And if it is not certain that the RLA covers pilots, should not our job be to ensure that it does?
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    Does anyone here believe it was ever the intent of Congress not to ensure the U.S. citizens working abroad on U.S. flight carriers flying U.S. routes, have the benefits and protections of U.S. labor laws of their own country?

    Does anyone here believe we should leave decisions up to the courts? I would think not.

    Mr. Chairman, if we did not already have Title II of the RLA, which we have presumed for 61 years has covered U.S. citizens and pilots, we would have to go out and invent it.

    I do not believe we have to invent a labor law for pilot coverage. I think we merely have to reaffirm Title II of the Railway Labor Act to show the intent of Congress in 1936.

    Simply stated, when foreign carriers fly into and out of the U.S., their employees are covered by their own country's labor laws. The same can or at least should be said for employees for U.S. carriers when flying into and out of a foreign country.

    As we get into the question and answer period, Mr. Chairman, I do have several questions for ALPA and other witnesses here today to inquire into the questions about sovereignty and foreign labor laws and the so-called retaliation we hear a lot about in opposition to this bill, retaliation presumably foreign governments would take if this bill is enacted, and I believe that we will answer a lot of misperceptions and set everyone's minds at ease by the conclusion of this hearing.
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    I am going to attempt to define exactly what ''domicile'' once and for all means in order to clarify in all of our minds what is meant by the word, ''domicile.''

    I also note, for the record, a question concerning the definition of ''foreign commerce'' has been raised, and perhaps we can shed some light on that, as well.

    Since 1936, we have had no interest and do not now have any interest in imposing our labor laws on the employees of foreign carriers. We have no interest in this legislation on imposing our labor laws on the employees of foreign carriers, and I hope that will be kept in mind throughout today.

    And it should be noted that if enacted, H.R. 991 would affect only flight deck crews, not ground service crews either here or abroad. Repeat, only flight deck crews, not ground service crews either here or abroad.

    Since many members of this Subcommittee are familiar with our maritime labor laws, I hope you will see, and let me say that my Bill simply tracks the longstanding application of U.S. labor laws to crew members on U.S. maritime vessels.

    The U.S. maritime labor law ensures, and it should ensure the U.S. citizens working abroad on U.S. flight carriers have the benefits of U.S. labor laws. The same should apply to international aviation.

    That is what I attempt to do today, Mr. Chairman, no more, no less, and I thank you again for this opportunity.
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    Mr. DUNCAN. Well, thank you very much, Mr. Rahall, and certainly we appreciate your bringing this legislation to the attention of the Subcommittee.

    Mr. Rahall and I served on two full committees, the same two committees, and we have worked together for many years and have a long time friendship, and I know of the outstanding work that Mr. Rahall does in many areas.

    Mr. Bass?

    Mr. BASS. Mr. Chairman, I have no statement except to thank you for holding this hearing and I am looking forward to an instructive and informative process here.

    Mr. DUNCAN. All right. Thank you very much.

    Mr. Boswell?

    Mr. BOSWELL. Thank you, Mr. Chairman. I, too, appreciate you doing this and I do not know why we would even hesitate to give the airline pilots the same kind of protection we give other folks, so I think this is time to recognize just a common-sense application, and I appreciate the effort that is being made and want to be helpful.

    Mr. DUNCAN. Thank you very much.

    Mr. Pease?
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    Mr. PEASE. Thank you, Mr. Chairman. I also wish to thank the Chair and to advise the Chair that I have another committee that has several members that are meeting, so rather than make a statement, I will yield my time so we can hear from the folks here.

    Mr. DUNCAN. All right. Thank you very much. We will go ahead and proceed with the witnesses, then, and we have two very distinguished panels.

    I would like for the first panel to come forward at this time.

    The first panel consists of Captain J. Randolph Babbitt, who has testified in front of this Subcommittee perhaps more than any other witness, and always is a great witness, a very effective witness.

    Mr. Babbitt is the President of the Airline Pilots Association. He will be accompanied by Mr. Russell Bailey, who is counsel for the Airline Pilots Association, and Mr. Steven H. Taylor, who is the managing attorney for the Federal Express Corporation.

    If the first panel would come forward at this time.

    We always proceed on this Subcommittee with the witnesses in order in which they are listed on the call of the Committee hearing or on the formal announcement of the agenda, and that means that Captain Babbitt, you will go first.
    [The prepared statements of Mr. Cramer, Mr. Costello, and Mr. Poshard follows:]
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    [Insert here.]


    Capt. BABBITT. Thank you very much.

    Mr. DUNCAN. Thank you.

    Capt. BABBITT. Thank you very much, Mr. Chairman. I appreciate very much the opportunity to come before the Subcommittee today.

    As you have stated for the record, I am the President——

    Mr. DUNCAN. Let us see. I am not sure that is turned on. Is that——

    Capt. BABBITT. Am I not close enough to this microphone?

    Mr. DUNCAN. Well, the microphone is not working, for some reason, and you think if he gets——
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    Capt. BABBITT. I really—I am about as close——

    Mr. DUNCAN. Yes.

    Capt. BABBITT.——as I can get.

    Mr. DUNCAN. You are about as close as you can get to the mike.

    Well, I apologize, but let us——

    Capt. BABBITT. Treat it like the headset in the airplane. Pull on it.

    Mr. DUNCAN. Let us wait just a minute and see. If we cannot get it worked out, then we will have to proceed with, but——

    Capt. BABBITT. Is there a switch, maybe?

    Mr. DUNCAN. I think we will get it working here in just a minute. I do not know——

    Capt. BABBITT. Does this one? Apparently, this one works.

    Mr. DUNCAN. Okay. Well, let us go ahead and do that then.
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    Capt. BABBITT. This one?

    Mr. DUNCAN. Yes. Okay. That is great.

    All right. Thank you very much. You may proceed.

    Capt. BABBITT. Thank you, Mr. Chairman. I do appreciate the opportunity to come before the Committee, and for the record, again, I am the President of the Airline Pilots Association. I am also the Vice President of the AFL–CIO's Transportation Trades Department.

    I also, in the past, served as a member of the national commission to ensure a strong, competitive airline industry.

    ALPA represents 47,000 airline pilots at 35 U.S. and ten Canadian carriers, many of which are engaged in flight operations outside of their home country.

    I very much appreciate the opportunity to appear before the Subcommittee, and to give you ALPA's views on H.R. 991.

    I would also like to thank the 17 members of the Subcommittee who co-sponsored this legislation and made this testimony possible.

    This Bill, in our view, would confirm that the Railway Labor Act applies to air carriers and their flight deck crews while they are engaged in international operations. We believe that the measure is a timely effort to dispel any confusion about the application of the Act, and collective bargaining agreements reached under the Act, as applied to international operations of U.S. airlines.
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    In 1936, as Congressman Rahall stated, Congress amended the Railway Labor Act and he articulated the key points that we would focus on. I will not repeat them here.

    But in light of the actual route structure and operation of U.S. airlines in 1936, it is plain that the Amendment evinces the clearly expressed intention of Congress at that time to extend the coverage of the Railway Labor Act to pilots of U.S. carriers who are domiciled overseas if they are engaged in foreign commerce.

    When the Amendment was passed, two of the largest and most prominent U.S. airlines at that time, Pan American World Airways and Panagra, flew nothing but international routes. I repeat, they flew nothing but international routes, a fact undoubtedly known to Congress as those two carriers held many of the original international air mail contracts awarded by the U.S. Postal Service.

    These airlines also had pilots at foreign domiciles, and ALPA, who was then, as now, a proponent of the Amendment, had membership that included those pilots at Pan American and Panagra.

    We advised Congress that pilots engaged in service in foreign countries were among the airline employees that ALPA sought to protect with that Amendment.

    In these circumstances, if Congress had not intended to include U.S. pilots flying between foreign points or based in foreign domiciles under the Railway Labor Act, it would have expressly excluded them from coverage. But there is not the slightest amount of evidence to suggest that there was any intent to exclude such pilots, either in the actual Amendment, or in its text, or in the legislative history surrounding the Amendment.
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    Rather, Congress covered, and I quote again, ''every common carrier by air engaged in interstate or foreign commerce and every carrier by air transporting mail for or under contract with the United States government, and every air pilot who performs any work as an employee of such carrier or carriers.''

    Interstate and foreign air commerce was a phrase defined in the Air Commerce Act. It was in effect in 1936 and in pertinent part covered, and I quote, ''air commerce between any state and any place outside thereof.''

    Air commerce, in turn, was defined as, quote, ''transportation in whole or part by aircraft of persons or property for hire, navigation of aircraft from one place to another for operation in the conduct of business,'' end of quote.

    In other words, what mattered to Congress was not where a pilot was domiciled or performed his work, but what his or her work was.

    If a pilot engaged in foreign commerce or carrying U.S. mail for the U.S. Government aboard a U.S. carrier, then the Act considered that pilot covered by the Railway Labor Act.

    The industry understood clearly in 1936 the Amendment to cover all pilots of U.S. air carriers, and this is evidenced by the behavior of the U.S. carriers at the bargaining table in the years following the Amendment.

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    Shortly after the Amendment, Pan American and Panagra, which as I mentioned earlier, flew only international routes at the time and had pilots domiciled in foreign countries, recognized ALPA as the duly-recognized bargaining representative of their pilots. And until they ceased operations, Panagra in 1966 and Pan American by merger in 1991, these two carriers bargained with and concluded many, many agreements with ALPA over rates of pay, rules and working conditions of their pilots.

    And throughout these bargaining relationships, the two carriers maintained numerous foreign domiciles.

    Similarly, ALPA bargained on behalf of Braniff pilots domiciled in Lima, Capital Airlines pilots domiciled in Frankfurt, Northwest airline pilots domiciled in Tokyo, Viet Nam and Greece, TWA pilots domiciled in Cairo, and a number of locations in continental Europe, as well as United pilots domiciled in London and Hong Kong.

    Indeed, to ALPA's knowledge for nearly 60 years, no U.S. carrier has ever contested the applicability of the Railway Labor Act to its pilots based on where they were domiciled.

    This historic practice and understanding of the Act only makes sense.

    A crew of United Airlines pilots, for example, might fly an international trip that originates and terminates in Honolulu, but has stops in Tokyo, Shanghai and Beijing. They are, of course, flying over U.S. routes on U.S. registered aircraft.

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    The application of one set of labor laws to this flight operation promotes stable labor relations and the continued growth of U.S. airlines.

    As the United States seeks to maintain a competitive edge in the expanding global economy, U.S. airlines may be increasingly called upon to serve the nation's needs by carrying passengers and cargo outside this country. And with improved technology and diminished regulatory barriers, U.S. carriers will be able to integrate a larger number of international segments into their U.S. anchored global networks.

    We do not believe that there is a rational basis to exclude, nor do we believe that Congress ever intended to exclude, portions of a U.S. carrier's integrated route system from coverage of the Railway Labor Act.

    There have been a handful of court cases that have held that the Railway Labor Act does not cover flying by U.S. air carriers between two foreign points. ALPA believes that the decisions in these cases were based on a fundamental misreading of the 1936 Amendment, and although none of them have addressed pilots specifically, they have created needless doubt about the scope of the Railway Labor Act.

    Furthermore, these court cases threaten to undermine the key policies of the Railway Labor Act.

    First, the Act expresses a strong preference that classes of employees, such as pilots, be represented on a system-wide basis. In other words, when pilots of an airline select a representative for collective bargaining purposes, that representative represents all the pilots of that airline.
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    The court cases at issue run contrary to this principle. H.R. 991 would preserve the Act's preference for a system-wide collective bargaining agreement.

    Second, these court cases also undermine, in our view, the central purpose of the Railway Labor Act, to prevent the interruption of vital transportation services by requiring airlines and their employees to negotiate labor agreements through collective bargaining and resolve the labor disputes through binding labor arbitration.

    Without clarification from Congress, these cases call under question both whether pilots employed by U.S. carriers are, in fact governed by the Act's restrictions on strikes and other forms of labor unrest while they are engaged in international operations, and whether the flight deck crew of a U.S. airline can enforce collective bargaining agreements governing international operations of U.S. carriers as they have for years.

    H.R. 991 eliminates the confusion created by these cases by confirming that the Railway Labor Act covers flight deck crew employed by U.S. airlines who happen to be based overseas while engaged in flying in U.S. commerce.

    The proposed Amendment has been narrowly drawn to accomplish this purpose. First, the proposed Amendment only applies to U.S. air carriers, a term defined in U.S. transportation laws. Thus, it does not apply to foreign crews or foreign carriers or employees of any other form of carrier under the Railway Labor Act.

    Second, the proposed Amendment applies only to flight deck crew employees who are engaged in the actual operation and service aboard the aircraft as they cross international boundaries and global operation.
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    The Amendment leaves untouched the labor relations arrangements applicable to foreign nationals employed by U.S. carriers to provide ground service and related services at foreign airports. Such ground service employees are frequently represented by unions in their home countries under the laws of those countries.

    Third, the proposed Amendment does not affect the ability of U.S. airlines and their flight deck crews to adopt special provisions governing international operations or foreign based flight deck crew members through collective bargaining under the Act. For example, several U.S. airlines have reached collectively bargained agreements that applied different work rules to pilots working out of foreign bases. The proposed Amendment is designed to preserve and strengthen the ability of U.S. airlines to adopt such solutions through collective bargaining.

    And, fourth, the Amendment does not interfere with the rights of foreign states.

    The United States has a substantial interest in the uniform application of its labor laws to the highly mobile flight operations of its own air carriers which are flying over U.S. routes, using U.S. registered aircraft, subject to regulation by the United States Federal Aviation Administration.

    Foreign states, by contrast, have little, if any, interest in application of their labor relations laws to such U.S. air carrier flight crews. Indeed, foreign flight crews apply their own labor laws to their own flight deck crews.

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    A Lufthansa pilot, for example, continues to be governed by the working conditions established under German labor law when his airline flies passengers or cargo to a United States city or from a United States city to a third country.

    And, finally, the proposed Amendment tracks the longstanding application of U.S. labor laws to crew members on U.S. maritime vessels.

    In that arena, the U.S. has declined to assert jurisdiction over labor relations on foreign flag vessels, even when they are operating in U.S. waters, and, on the other hand, the U.S. has asserted, with court-approval, jurisdiction over labor matters on U.S. flagged vessels when those vessels are operating, or, in fact, even based in foreign waters.

    In short, international aviation, as well as in the maritime realms, the United States has an interest in ensuring, and should ensure, that U.S. citizens working aboard U.S. flagged carriers have the full benefits of all U.S. labor laws.

    That concludes my oral testimony, and I would be happy to answer any questions at the appropriate time, Mr. Chairman.

    Mr. DUNCAN. Thank you very much.

    Mr. Taylor. And you need the mike.

    Mr. TAYLOR. Mr. Chairman, members of the Committee, I thank you very much for giving us the opportunity to speak to you today.
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    My name is Steven Taylor. I am the Managing Attorney for labor and employment law at the Federal Express Corporation. Doyle Cloud from our office normally comes and testifies in front of this Committee, but he was unable to make it today, so I am here in his stead. I cannot fill his shoes, but I will do the very best I can to explain our position and answer your questions.

    As this Committee knows, FedEx is a very large, global leader in the express shipping business. We employ approximately 130,000 employees throughout the world. Approximately 108,000 of those employees are in the United States, including approximately 25,000 in our home state of Tennessee. Another 22,000 are in other countries.

    We presently service 212 countries around the world with service, and two of our largest operational hubs are in Subic Bay in the Philippines and in Paris, France.

    In terms of pilots, FedEx employs approximately 3400 pilots. Since 1996, our pilots have been represented by the FedEx Pilot Association, whom I understand will be testifying here today, and we are currently engaged in negotiations with the FPA for a collective bargaining agreement.

    FedEx opposes this proposed legislation for a number of reasons.

    First of all, it is our belief that application of the Railway Labor Act on an extraterritorial basis will inevitably result in conflicts between U.S. and foreign law. It will also violate many of the aviation bilateral agreements presently in effect between the United States and other countries. And if enacted, this Amendment will also reverse what we consider to be 70 years of well established legal precedent.
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    It is our view that this is not a clarification of existing law, but it is a dramatic and substantial change in the Railway Labor Act.

    The National Mediation Board has uniformly found through the years that the Railway Labor Act does not apply to a carrier's employees domiciled and flying among foreign countries. This is an issue that impacts the Department of Justice, the National Mediation Board, the Department of State, and will have substantial impact on their dealings with other countries.

    Also, Congress itself has actually looked at this on a number of occasions, beginning in the 1950's, and more recently, there were hearings in 1994.

    On all of these occasions, Congress determined that the present state of the law is adequate. It balances the interest of the carrier and the Union, and the law does not need to be amended.

    As Captain Babbitt mentioned, the beauty of this situation is that presently, air carriers and pilot unions have the ability to negotiate over the representation and terms and conditions of employment, and they often do.

    Most carriers and unions presently have some sort of agreement that allows the parties to balance the interests of the carrier with the interests of the unions and work out a resolution that complies with U.S. law and with foreign law.

    We think that the existing law should be continued. There should be no amendments, and the parties should continue to be free to negotiate these types of arrangements.
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    And, finally, playing into that same issue, I think what is important is that it is our view that really what this is about is an attempt by certain airline pilot unions to represent airline pilots in such a way that they get additional leverage during the negotiating process.

    There really are no strong policy arguments supporting passage of this Amendment. Instead, it is an Amendment designed to give one party additional bargaining leverage when negotiating a collective bargaining agreement.

    Again, I appreciate the opportunity to speak to the Committee and I am available to try to answer any of your questions.

    Mr. DUNCAN. All right. Thank you very much, Mr. Taylor. We do have a quorum call that is going on right now and then a 5-minute vote following that. So I suppose that we probably should break at this time and come back following those two votes.

    The Committee will be in recess.


    Mr. DUNCAN. Mr. Rahall, since he is the author of the Bill, we will go first to Mr. Rahall for any questions that he may have.

    Congressman Rahall.
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    Mr. RAHALL. Thank you very much, Mr. Chairman, and I thank all the panel for their testimony.

    Captain Babbitt, I might begin with you, if I might, and first ask you, and I know you touched upon this in your testimony, but I think it would be good if we make it perfectly clear for the record and get before all members' minds clearly what is the definition of ''domicile.''

    Capt. BABBITT. That is a good point.

    Mr. Rahall: Is it—well, let me let you go ahead.

    Capt. BABBITT. Okay. Domicile does not have anything, in our view, to do with citizenship or nationality, or any of those issues. It simply is a point where pilots begin their work. And that is a common definition used in most of the labor agreements that I am familiar with.

    Pilots, quite often, live near or around that domicile, quote, unquote. It is not a requirement, though. A pilot could commute to that domicile from another point. But the basic definition, it is simply a place where work begins and ends.

    Mr. RAHALL. Can I punch in the clock here? Although you may live in New York, you punch it in here in this city?

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    It is not necessarily where you call, ''home''?

    Capt. BABBITT. That is absolutely correct. I am sure within the District, there is a lot of people that consider themselves to be employees of the District when they, in fact, live in Maryland or Virginia or other places.

    Mr. RAHALL. Okay. Let me ask you, in addition, about the question of retaliation that the opponents of this legislation, even our own State Department, I think, sometimes misinterpret it and perhaps base their early opposition on the wrong reading of this legislation.

    But if the legislation were to become law, do you really feel that foreign governments would retaliate or reciprocate, or whatever term you want to use?

    In other words, would they change their practices in any way or another because of passage of this legislation?

    Capt. BABBITT. No, sir. I do not see any change whatsoever. I would not even review it as retaliatory.

    As a matter of fact, we belong to a larger group called the International Federation of Airline Pilots. That is pilots gathered together from 90 different nations, and we have done some checking internally, and traditionally, the pilots are governed for their labor relations laws by the laws of their land, no matter where they are.

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    If they have, again going back to the Lufthansa example, if this Amendment were to go through, which I view obviously as simply a clarification of what Congress intended to do in 1936, but if you clarify it with this Amendment, the effect would be zero with regard to a German pilot.

    Currently, that pilot, if you were to have an incident while en route over the United States, he would go home and that incident would be adjudicated using German labor relations laws, not U.S. laws. So that is what is already in effect.

    So there would be no retaliation. It would simply be a continuance of what they do today, which is basically what we are suggesting with this Amendment that you proposed.

    Mr. RAHALL. Thank you. I appreciate that.

    Let me ask you, Mr. Taylor. Your testimony, you based a lot of your opposition on the fact that this may give ALPA or some other unions some future leverage.

    Mr. TAYLOR. Yes, sir.

    Mr. RAHALL. Or bargaining power, or whatever.

    Mr. TAYLOR. Yes, sir.

    Mr. RAHALL. Highly hypothetical.

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    What would be the effect today if such legislation were passed upon your company's ability to conduct business?

    Mr. TAYLOR. Well, it is substantial. First of all, we do perceive—it is our belief that there is a strong conflict if you attempt to apply the Railway Labor Act extraterritorially.

    And if I may, for example, if you had a base in Paris for pilots, there is the implication to what is being said that somehow, there is a vacuum today and the Railway Labor Act needs to be applied to fill that vacuum.

    In effect, there is no vacuum today. It is quite clear that a group of pilots, working for FedEx, flying out of Paris to London and to Moscow and to Italy and to any other country is covered by French labor law.

    And if you pass this Act, what you are going to do is not fill a vacuum, but you are going to create a direct conflict between French labor laws and American labor laws.

    That puts tremendous pressure on an American carrier because they have to then attempt to either withdraw from that market and just allow carriers from other countries to serve that market, or they have to somehow try to work out some accommodation with their union that they make sufficient concessions that the union would not attempt to enforce the Railway Labor Act.

    Mr. RAHALL. Does not that foreign country have similar laws applying to their employees?
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    Mr. TAYLOR. Yes, sir. They do, and I might add also that I very respectfully disagree with Captain Babbitt. I believe that if Lufthansa had 50 pilots based in New York, flying out of New York, and if those 50 German pilots approached ALPA and asked ALPA to represent them, the NMB would certify an election and ALPA would have the opportunity to represent those people.

    So the key here is the nexus between where the flying is occurring, where the individuals are residing.

    It is not the nationality of the carrier.

    Mr. RAHALL. I am not sure I follow that scenario or totally agree with it.

    Let me ask Captain Babbitt if he would like to respond to what was just stated and/or any previous testimony.

    Capt. BABBITT. Yes, sir. I would again respectfully disagree.

    Those Lufthansa pilots, again, it is not where you are doing, it is what you are doing. And those Lufthansa pilots would not be engaged in U.S. air commerce. They would be engaged in German air commerce.

    They are working for a German corporation. They happen to be domiciled in the United States, but they are clearly not engaged in U.S. commerce under the definition of U.S. foreign commerce or any other definition in my view.
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    I would touch upon a piece of the testimony that I think leaves, at least in my mind, a conflicting viewpoint as stated by the testimony here given by Federal Express, and that was the suggestion that the employer and the employees should negotiate solutions. And I completely agree with that.

    But the problem is, by declining to accept the Railway Labor Act as the prevailing labor law, how is it that we are going to enforce those things that we have agreed to?

    And I will go a step further with that.

    If I were a pilot for Federal Express and they opened the domicile I suggested in Paris, and I used my collectively bargained agreement to bid that spot in Paris, if I accepted what was just stated here, I have just bid myself into a one-way street. I can never come home because once I get over there, the contract that was negotiated that got me there is no longer applicable, and I have no labor law to turn to to get home.

    Mr. RAHALL. Thank you.

    Thank you, Mr. Chairman.

    Mr. DUNCAN. Thank you, Congressman Rahall.

    Vice Chairman Blunt?

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    Mr. BLUNT. Mr. Chairman, thank you for holding this hearing.

    I am fundamentally confused on this topic and I wonder if there is any way to resolve this?

    Is this just an absolute disagreement?

    You negotiate these contracts, do you not, Mr. Taylor?

    Mr. TAYLOR. We do. Yes, sir.

    Mr. BLUNT. And how are your pilots that are domiciled somewhere else treated?

    Mr. TAYLOR. Well, and I think that is a very good point.

    Our pilots—we have pilots domiciled outside of the United States and while we are in the midst of collective bargaining negotiations with our pilots—and I really do not want to get into that—I think if you looked at the 70 years of history of this legislation, if you look at all of the examples that Mr.—that Captain Babbitt referred to during his testimony, the airlines and the unions are able to work out between themselves an accommodation that they can balance their interest, while at the same time, respect foreign labor law.

    And there are many ways that a carrier and a union can sit down and negotiate a contract, and I believe a contract that can be enforced in the U.S., without conflicting with French law or Belgian law, or whatever country that you are flying into.
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    The existing situation allows that and this legislation will create the conflict that is not necessary.

    Mr. BLUNT. Is there any room for any middle ground here where you would say that the Railway Labor Act would apply unless it is in conflict with the labor law of the country where people are stationed or where people are located?

    Mr. TAYLOR. Well, clearly, there are labor laws in every country that I am aware of, so there are always going to be conflicts. I do think that it is important to distinguish some of this gateway flying from flying purely foreign points.

    I do not believe that there is a strong disagreement among carriers and unions that gateway flying; that is, flying that starts in the U.S. and ends in another country or starts in another country and ends in the U.S. is covered by the Railway Labor Act. The existing law does that.

    The concern is an attempt to apply this to, a foreign national, a French pilot working in Paris who never flies to the United States. That individual clearly has a much stronger nexus with French law, has an expectation that French law would apply, and this legislation would attempt to take U.S. law and impose it on those individuals in Paris.

    Mr. BLUNT. But do you not negotiate with those pilots, for instance, to where under the overall contract, U.S. law would apply to that French pilot you gave as an example?
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    Mr. TAYLOR. There are many different ways that the parties can negotiate arrangements that satisfy all of their interests, or at least balance their interest so they can live with it, and that exists in many contracts.

    Carriers and unions have a number of different agreements, many different flavors and styles that tend to deal with these issues, and it is worked for the past 70 years.

    Mr. BLUNT. Captain?

    Capt. BABBITT. Yes, sir. I cited a number of instances and cases of foreign domiciles, and we talk about the 60 year history. And it is interesting and I think worthy for the record to note that in this 60 year history, there have been no conflicts.

    Throughout the entire time we had a domicile from 1947 to 1957 in Tokyo. The Northwest pilots were based there. There was never any question on the part of Northwest Airlines, the pilots of Northwest Airlines or the Japanese government as to whose labor law applied to those pilots. There were no conflicts. Throughout all of these cases, we have not had a conflict, per se.

    Secondly, I think it is important, we talk about the gateway flying. I will go back to the definition of foreign commerce, and that is, any time we are moving U.S. goods on U.S. air carriers, and remember again, it is what, not where, but what we are engaged in doing, that that makes it U.S. commerce.

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    So, for example, if a pilot were to fly from New York to London and then London to Frankfurt, in that second leg, is he still engaged in U.S. air commerce?

    He absolutely is, under all of our labor law interpretations, under all of our commerce law interpretations.

    If the flight makes four more stops all the way down to Cairo, he is still a U.S. citizen, flying a U.S. carrier, engaged in U.S. operations, and carrying U.S. foreign commerce, by definition.

    So, you know, we again—I would not get too focused on the gateway issue.

    We have pilots that, for example, would lay over in Tokyo and fly three more legs, you know, coming back maybe every other night back to Tokyo.

    If I accepted what is being suggested here, then when the pilot leaves the United States and passes Honolulu, that is the end of U.S. labor law.

    When he lands in Tokyo, Japanese labor law would take over. The next morning, when he arrives in Hong Kong, it would be British until July, and then it would become Chinese labor law. And then he goes to Taipei and so on.

    It is ludicrous to think that we could, every time we touch the ground or fly through the air space, that we would suddenly become chameleons and adopt the en route labor law. It does not make any sense.
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    It is not a feasible operation, and finally we go back to the fact that we have been able to negotiate very effective solutions, but the underlying and the underpinning is the enforceability.

    How do we enforce that labor law or that contract that we have negotiated?

    If we do as suggested and negotiate terms to establish a foreign domicile that balances everyone's interest, now we have an agreement. But all agreements have a place we turn to for dispute resolution.

    Where do we turn to for dispute resolution for this U.S. negotiated contract for U.S. pilots and U.S. carriers? That is a big question and I think that this Amendment resolves that.

    Mr. Blunt: But apparently that has not been a problem for 70 years? We just have not had a problem with these negotiated deals and these negotiations in the 70 year history of this?

    Capt. BABBITT. We have not had a conflict with any foreign labor laws, to my knowledge and our research.

    Mr. BLUNT. I guess my final question would be, are you more concerned about the enforceability, even though that has not been a problem?
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    Are you more concerned as the airlines get into more of a worldwide posture that they will not be as willing to negotiate this structure that has pretty much been standard in the negotiations?

    Capt. BABBITT. It is a good point that the world is, in fact, globalizing, and we are, in fact, going to be exposed to more of this.

    I am not concerned, and perhaps I have not been clear enough on this issue. I am not concerned that we will not have the willingness of the carrier to negotiate the terms. My concern is, once negotiated, the enforceability of those terms.

    Again, the one-way street example. I have signed an agreement that allows pilots to go to London, and at the end of a year, they are supposed to come home. I will use a ridiculous example. At the end of the year, the company says, ''Well, we are not going to pay for your moving expenses to come home.''

    Well, who do I turn to? British law? The contract was not negotiated—was not anticipated to be interpreted under British law. It was clearly planned to be governed by the Railway Labor Act.

    And we know under the Railway Labor Act what the process would be. We do not have a clue when we are on foreign soil.

    And, again, we have had such a long history in the maritimes, I mean absolutely, the flag of the vessel was the law of the vessel. That is tradition. It always has been since labor rules were recorded.
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    This is simply an offshoot of that same theory.

    Mr. BLUNT. Just one quick follow-up, Mr. Taylor. Who would he turn to?

    Mr. TAYLOR. One is that the parties have never had trouble arbitrating these disputes and reaching results in the past, and also, even the Pan Am decision which is the decision that they refer to as being problematic, I think there are a number of ways that these agreements can be enforced in federal courts or state courts. The agreements are enforceable.

    Mr. BLUNT. In whose federal court?

    Mr. TAYLOR. In the United States Federal Court, based on diversity, is one way that we could do it.

    I think that that has not been a problem, historically.

    Mr. BLUNT. Thank you, Mr. Chairman.

    Mr. DUNCAN. Thank you, Mr. Blunt.

    Mr. DeFazio?

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    Mr. DEFAZIO. Thank you, Mr. Chairman.

    Mr. Taylor, I had an interesting exchange with your colleague a couple of years ago on this issue, Mr. Cloud. And it goes back to your point about applying the standards of, you know, the labor law of the country in which crews are based. And at the time, the issue—he had mentioned Macau.

    And the problem I raised with him then, and I guess I just do not see it any different today. In fact, we are closer to the reality, and Macau is soon to be a part of the Peoples Republic of China, a country which does not recognize human rights, labor rights or any other rights of individuals.

    So would you subject U.S. domiciled pilots to a complete deprivation of civil and constitutional liberties and say they would be subject to Red Chinese law and the arbitrary nature of it while based in Macau?

    Mr. TAYLOR. No, sir. One is if you have a base in Macau, they are subject to Chinese law. We have no choice. They are physically flying out of——

    Mr. DEFAZIO. Not labor law, necessarily. They are subject to the civil laws, as they live in the country, as are people domiciled in this country. But we are talking about labor law as employees of the U.S. airline.

    Mr. TAYLOR. Yes, sir. I believe most countries, including the United States, will apply its own labor laws to individuals flying out of that country.
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    In the United States, TACA is an example. In the early eighties, it had Salvadorian pilots flying out of the United States, and the U.S. applied its labor laws to those foreign pilots flying out of the U.S.

    So two issues here: One is, I do believe that China would apply its labor laws to our pilots, whether we wanted them to or not, but I think protections can be guaranteed to those pilots through the collective bargaining process.

    I think that——

    Mr. DEFAZIO. Well, yes. Their laws would provide no protection, so, hopefully, our laws on collective bargaining——

    I guess you keep coming back to collective bargaining, and you are saying you are going to have agreements that are collectively bargained, but what you are saying is you want to be able to have one bargaining unit which is foreign domiciled based and another unit which is U.S. based.

    Is that correct, because you are talking about giving too much power. You want to have separate agreements with those who are foreign based and those who are U.S. based?

    Mr. TAYLOR. I just think you need the flexibility, sir. I do not——

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    Mr. DEFAZIO. Well, but that is ultimately sort of where you are headed here, right? I mean you want to be able to have different agreements and use the company's clout with a smaller unit overseas to negotiate less favorable agreements.

    Say, ''Hey, look. You are living there. It is cheap to live there. You do not need to be paid as much. You know, people there work 80 hours a week. Maybe you should work 60.'' I mean things like that, right?

    Mr. TAYLOR. No.

    Mr. DEFAZIO. I mean you could have different standards?

    Mr. TAYLOR. No, sir. I do not think that is necessarily the case.

    Mr. DEFAZIO. Okay.

    Mr. TAYLOR. I do not think you need different standards.

    I do think, though, that you are going to have to recognize that if you are flying out of a particular country, that country, whether we like it or not, is going to impose its laws on those employees, and we have got to work some arrangements——

    Mr. DEFAZIO. Well, I am not aware that we are, doing that today with foreign airlines, you know, who have domiciled people in our country.
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    Mr. TAYLOR. Yes, sir. I believe we are.

    Mr. DEFAZIO. Well, I am not aware that we are. Perhaps the attorney at the other end can address it.

    Well, let me ask something else first.
    Who—what other airline opposes this legislation?

    What you are saying is, there has never been a conflict. There is no problem. We all want to have the same standards. We all want to comply with the same laws. We all want to give them rights as U.S. citizens. There is no problem, but we can see a day where there might be a problem because we want to be able to negotiate in a way that might not quite provide the same benefits.

    So who else is expressing this concern?

    I have not heard from any of the other major international carriers that they are opposing this legislation, that they believe it violates U.S. law—I mean international law, international treaties; that it is going to cause them grave problems in terms of disproportionate clout to their bargaining units. No one else is.

    Can you name another U.S. based carrier who is in opposition?

    Mr. TAYLOR. I have not taken a poll, but in 1994, there were a number—I think Delta was involved. I think the ATA, which is the association representing carriers was.
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    Mr. DEFAZIO. But, now, today. It is 1997. Are you aware of anybody else, personally?

    Mr. TAYLOR. I am not personally. No, sir. I suspect there are, but I am not aware of them. No, sir.

    Mr. DEFAZIO. Okay. I am not aware that there are any. You seem to stand alone.

    And I guess the unfortunate thing I see here is it seems that Federal Express seems to have particular problems with the U.S. labor law. I mean you went and held up the entire government of the United States hostage last year in order to get a special exemption or provision for express carriers from the Railway Labor Act.

    Is that not correct?

    Mr. TAYLOR. No, sir.

    Mr. DEFAZIO. You did not get special individual legislation that benefited your company last year, and it did not hold up the Senate of the United States from adjournment?

    Mr. TAYLOR. That is not the way I would characterize it, sir.

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    Mr. DEFAZIO Well, it is certainly what I and other members of Congress and the popular press perceived, but so I am wondering why do you have such extraordinary problems?

    If you want to be such a good employer and you want to extend these rights and benefits universally to all your employees who perform well, why do you have such problems with the Railway Labor Act?

    What is the matter with the Railway Labor Act?

    Why should we not extend the Railway Labor Act to all of your pilot employees who are U.S. citizens, who are working in international commerce that is part of an integral international operation?

    Mr. TAYLOR. Well, FedEx is an excellent employer. I think our pilots feel like we are a very good company. We have a good relationship with our pilots.

    But the reason is because it will inevitably create conflicts with foreign law. The law has——

    Mr. DEFAZIO. Well, I will tell you what. Tell you what. Let us cut a deal.

    We are the Congress. Downtown is the State Department. We will worry about the conflicts with international law. If it is going to cause us problems, in GATT or the international courts or whatever, that is what we have a State Department for. They will resolve those things.
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    What problems do you have as an employer extending the rights that individuals have under the Railway Labor Act to your employees overseas?

    Mr. TAYLOR. Because we feel like it would give unfair and unnecessary bargaining leverage to the pilots and to the——

    Mr. DEFAZIO. To the 50 people in Subic Bay? They got this—they are going to have huge leverage because they will be part of a larger group?

    Is that why? Do you want to bargain with them as 50 people isolated in Subic Bay?

    That does not sound great to me.

    Mr. TAYLOR. And we feel like, presently, we can negotiate with our pilots. We can work out all of these issues.

    We have 3400 pilots. We are involved in the collective bargaining process. We are confident that we can work out an arrangement, balancing everyone's interest in such a way that the pilots will be satisfied with the result and the carrier will be able to operate in those countries.

    We do not want to be forced to abandon those countries because we cannot operate without conflicting laws.
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    Mr. DEFAZIO. Well, again, we will worry about the conflicts. I am not aware that foreign law is taking precedence.

    We certainly do not have pilots flying more hours than are authorized under U.S. laws overseas, do we?

    I hope not.

    Mr. TAYLOR. No, sir. I am not familiar with that at all.

    Mr. DEFAZIO. And flight duty time. Your planes overseas have to meet the same standards that they have to meet in the United States for maintenance, I would assume.

    Mr. TAYLOR. They do.

    Mr. DEFAZIO. Right. Okay. And so if another country does not have laws or have substandard laws, you are not—you know, we are not dummying down here, are we?

    Mr. TAYLOR. No, sir. But I do believe that if we are flying in and out of Paris, we have a number of laws that the French will impose on us that we have to comply with.

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    When we operate in a country, we try to comply with that country's laws, and we do our very best. If we are going to operate in this country, we are going to abide by our laws and standards and regulations, and there are times when they conflict.

    And we are saying that, presently, it is not necessary to amend this law because the existing situation is quite satisfactory to all the parties.

    Mr. DEFAZIO. Well, it is not. I have a letter, Mr. Chairman, which with unanimous consent, I would like to put in the record at the end of my question period from a resident of my district, a voting resident of my district, who is resident in Subic Bay as a pilot for Federal Express, and he is one of, I believe, a number who do not feel that they are fully and well represented under the existing situation. And he is expressing concerns. And I do not think he is unique. He has, long experience as a pilot and is enthusiastic about working for the company, but he just would like the same rights as other workers. And because he is based in Subic Bay, he does not want to be deprived of rights that other pilot employees might have.

    I do not think it is unique. We kind of have this idea of fairness, equity, equal protection under the laws and, just because my company sends me overseas, and says, ''Well, you know, now you are in a different category. You are subject to Chinese labor law. That means you will be working 80 hours a week with anklets and manacles on.''

    I do not think, that is a good thing for us to aspire to. I think we should continue to assert U.S. sovereignty and say—if Red China does not like it, well, let them come talk to the State Department. You do not have to worry about it.

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    Mr. TAYLOR. I believe our pilots in Subic Bay are well protected. They are well treated. They bid there. They are paid the same fundamentally as the pilots here in the United States, and the concern always is not that we are not able to reach some sort of accommodation with our pilots that they can live with, but the concern is that there is going to be legislation passed that will make it impossible for us to operate in some countries because there will be conflict.

    Mr. DEFAZIO. Well, we have a fundamental disagreement there. I do not think it will make it impossible for you to operate, and I believe that the State Department can work out any differences and, you know, that is—with that, Mr. Chairman, my time is expired. But I would like to put the statement of Mark J. Abbott in the record at this point, if that would be appropriate.

    Mr. DUNCAN. Yes, Mr. DeFazio. You certainly can do that.
    [The prepared statement of Mr. Abbott follows:]

    [Insert here.]

    Mr. DEFAZIO. Thank you, Mr. Chairman.

    Mr. DUNCAN. And we will go next to Mr. Ewing.

    Mr. EWING. I have no questions, Mr. Chairman.

    Mr. DUNCAN. All right. Then we will go next to Mrs. Danner.
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    Mrs. DANNER. I have no questions, Mr. Chairman.

    Mr. DUNCAN. Mr. Bass?

    Mr. BASS. Thank you, Mr. Chairman. I just have one question as a point of clarification.

    This proposed Bill would apply to U.S. citizens who are living in foreign countries, working for U.S. air carriers carrying—working for those companies, not foreign citizens living in foreign countries working for U.S. air carriers.

    Is that correct?

    Mr. TAYLOR. It is my understanding that this Bill would apply to foreign nationals working in foreign countries for American carriers.

    Mr. BASS. Foreign nationals. In other words, citizens of other countries——

    Mr. TAYLOR. Yes.

    Mr. BASS.——working for U.S. carriers in foreign countries?

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    Mr. TAYLOR. Yes, sir. That is my understanding.

    Mr. BASS. Is that your understanding also, Captain Babbitt?

    Capt. BABBITT. Our point of clarification would be the contract involved if that employee was hired by a U.S. carrier, working under the contract of that U.S. carrier. As a pilot, in this case, he would be covered by the Railway Labor Act because he would be part of that system-wide bargaining unit.

    As a practical point, I do not know of any foreign nationals that we are employing in that regard. But, yes. To answer your question accurately, it would apply in that narrow instance.

    Right now, there are only U.S. citizens involved.

    Mr. BASS. We are, of course, dealing here with transportation issues.

    I think one of you made reference to the fact that U.S. labor law does apply to U.S. flagged vessels.

    Can you draw a comparison from both positions as to why the U.S.—why the similar law should not apply to airline pilots as well or the converse?

    Mr. TAYLOR. Yes, sir. I think there is a fundamental difference between a ship and an airline. Basically, sailors on a ship, live on a ship, work on a ship, entertain themselves on a ship. They are in open seas for weeks, months at a time. And I am not expert in maritime law, but it does seem logical that there needs to be some rule of law on a ship in open seas at months at a time.
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    It is—I cannot imagine a pilot, a FedEx pilot ever being on the airplane for more than 10 or 12 hours at a time. The rest of the time, they are going to be in one country or the other.

    And a FedEx pilot who flies out of Paris, who never comes to the United States and who might not even be a U.S. citizen, who might be a French citizen, French law should apply to that person and not the laws of the United States.

    Capt. BABBITT. In both instances, and it is careful or very important to recognize this, all work is being done aboard U.S. vessels, and that is the underlying piece here.

    We are consistent everywhere else. For example, that airplane that is U.S. owned by a U.S. carrier is regulated by the Federal Aviation authority, and they exert their authority all over the world, no matter where that airplane lands.

    If that airplane is being operated by a U.S. carrier with U.S. crews in it, it is going to comply with and be subject to the full force of U.S. regulatory authority.

    And we are suggesting that we think the Congress intended that when they passed this Amendment in 1936, and we are simply attempting to clarify it today in 1997.

    Mr. BASS. Thank you.

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    Mr. Chairman, I have no further questions except to say that I do think that it appears to be consistent to me that—it seems to be argument that because you live on a ship, therefore, you should—American law should apply.

    We are only talking about your job here. Your job is to fly an aircraft.

    I do not know whether these contracts have any bearing on what you do when you are not working. It would seem to me to be consistent to apply the same principles to the airline or the airline pilots as you would the people who work on ships.

    I will yield back, Mr. Chairman.

    Mr. DUNCAN. All right. Thank you very much, Mr. Bass.

    Mrs. Millender-McDonald?

    Mrs. MILLENDER-MCDONALD. Mr. Chairman, thank you so much.

    I just want to raise this question to Mr. Taylor.

    It points out here that this particular piece of legislation purpose is to prevent interruptions in vital transportation service by requiring carriers and their employees to exhaust all avenues or reach an agreement before a strike and are taking other self-help measures.

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    Are you opposed to that?

    Mr. TAYLOR. That is one of the purposes of the Railway Labor Act, and, no. We are not opposed to that.

    Mrs. MILLENDER-MCDONALD. You are not opposed to that?

    Mr. TAYLOR. No. We do not believe this legislation does that, but I think the principle behind it is a good principle.

    Mrs. MILLENDER-MCDONALD. What do you think the legislation does?

    Mr. TAYLOR. We think this legislation will create conflicts, and let me give you an example.

    Basically, if the processes of the National Mediation Board were extraterritorially applied, you could have French pilots in Paris flying inside Europe, never coming to the United States, engaged in a dispute and having the National Mediation Board in the United States going to Paris to mediate a dispute among foreign nationals of a foreign country.

    And I do not think anybody thinks that is the intent—that is wise—I think clearly that is the result of this legislation. The existing law has worked quite well, and we think it has encouraged the parties to agree.

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    There has been very little interruption on an international basis that I am aware of, and that is why we do not think the law is——

    Mrs. MILLENDER-MCDONALD. Well, obviously, it is not working when it says—it cites in the report that some flight attendants were replaced by foreign flight attendants.

    I mean is that a working type of relationship that we want to have?

    Mr. TAYLOR. I am aware of the situation involving United where the French government basically imposed on United that they hire a certain number of flight attendants.

    Now I am not personally familiar with that situation. I do think that represents the kind of conflicts that we are concerned about which is that if you are going to operate in a particular country, then that country may impose certain requirements that you hire foreign nationals.

    Citizens of that country, it puts—it appear they are in a very difficult situation. They either have to comply with that country's law, or if the Railway Labor Act somehow keeps them from doing that, they have to withdraw from that country and not compete.

    And that is not, I think, in the best interest of anyone.

    Mrs. MILLENDER-MCDONALD. It would appear to me in the absence of the flight attendants being a part of the previous law and H.R. 991 then clearly puts them in the position of collective bargaining and other labor law protections.
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    You would not want to impede that.

    Am I correct on that?

    Would you want to impede that type of protection for flight attendants, as well as the pilots?

    Mr. TAYLOR. Well, yeah. I think this legislation just applies to pilots.

    But, again, I strongly support the idea of giving the parties the freedom to sit down and negotiate as they have done for the past 70 years and work out agreements that deal with these complex issues of foreign law and the rights and obligations of American pilots. And we think that that has been successful for the past 70 years.

    Mrs. MILLENDER-MCDONALD. All right. Thank you, Mr. Chairman.

    Mr. DUNCAN. Thank you, Mrs. Millender-McDonald.

    Mr. Lipinski.

    Mr. LIPINSKI. Thank you, Mr. Chairman, Mr. Taylor, Captain Babbitt. It was very interesting listening to the both of you gentlemen discuss this issue back and forth.
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    Mr. Taylor, at the present time, your contract with your pilots, how is the labor—the Railway Labor Act handled at the present time, your existing contract?

    Mr. TAYLOR. I think we are negotiating, as you know——

    Mr. LIPINSKI. Yes.

    Mr. TAYLOR.——with the FedEx Pilots Association, and the Railway Labor Act applies to all of those pilots who work, are domiciled in the United States, and it does not to those outside of the United States. That is determined by the NMB certification.

    Mr. LIPINSKI. Okay. And was—it was your union that negotiated that contract with FedEx, though, right?

    Capt. BABBITT. FedEx pilots do not have a contract. They have been in negotiations for about 4 years, and thus far, have not concluded a collectively bargained agreement.

    Certification changed, yes, on a system-wide basis. The pilots there were originally represented by the Airline Pilots Association. Today they are represented by the Federal Express Pilots Association.

    Mr. LIPINSKI. The Airline Pilots Association, did they negotiate the last existing contract between the pilots and FedEx?
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    Capt. BABBITT. Again, we do not have—we never did achieve a collective——

    Mr. LIPINSKI. Oh, you never did?

    Capt. BABBITT.——bargaining agreement.

    No. But the representation, I would take a little bit of exception to the statement that was made.

    Our certification was for all pilots in the employ of Federal Express. When the Airline Pilots Association represented those pilots, it did not say just the ones in the United States. It said, ''all pilots represented by or employed by Federal Express Corporation are represented by ALPA.'' And I would assume that same representation by the FPA applies to all pilots employed, not just those who happen to be domiciled in the U.S.

    Mr. LIPINSKI. Mr. Taylor, do you agree with that interpretation?

    Mr. TAYLOR. I do not disagree with what Captain Babbitt said initially. Frankly, I am not quite sure what the certification was with ALPA.

    I believe that the FPA, the FedEx Pilots Association, would agree. I think they are going to testify that presently, their certification does not extend to pilots outside of the United States, domiciled flying exclusively outside of the United States.
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    Mr. LIPINSKI. And you do not know what the situation may have been back when the certification took place between FedEx and the Airline Pilots Association?

    Mr. TAYLOR. I do not believe there was a foreign domicile at that point. I could be wrong, but I do not believe there was.

    Capt. BABBITT. It was one created during the period of representation, and again, with all due respect, I think I would be careful with the certification.

    The National Mediation Board certifies all of the employees in the class and craft. That is consistent with the system-wide application of the Railway Labor Act, which is one of the points, obviously, of contention, looking for solution in this Amendment.

    Mr. LIPINSKI. Mr. Taylor, would you run by me that situation you talked about earlier?

    I did not catch the whole thing about France. You were talking about something in France.

    Mr. TAYLOR. I think involving the National Mediation Board.

    I think that if you were to attempt to apply the Railway Labor Act extraterritorially, as I understand this legislation is intended to do. FedEx has foreign nationals flying for it, as does, I suspect, most carriers. They have individuals who are not U.S. citizens that fly for it.
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    And it is quite possible that an American carrier could have domiciled or based in Paris foreign nationals flying exclusively outside of the United States, flying from Paris to Germany and Paris to Italy. There could be a labor dispute among those individuals with FedEx, and rather than French law applying, which would be, I think, the position of the French government, those individuals could invoke the processes of the NMB.

    The NMB would be obligated then to invoke its processes, its mediation processes on behalf of foreign nationals in a foreign country where they never fly into the United States.

    Mr. LIPINSKI. It would seem to me that the ruling factor there would be that the corporation, the airline was owned in the United States. That would be my opinion on it, that, you know, since the corporation is an American corporation, the labor law that would apply would be American labor law.

    I think that it would be a very interesting case to argue, even though I am not a lawyer.

    There was someone speaking to you, Captain. Was there something you wanted to add to anything that you may have set there, or——

    Capt. BABBITT. Well, no. I just think we are creating a very unrealistic hypothetical case here. The position that has been stated has been the corporate position of Federal Express, and I appreciate that. They are entitled to express that.
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    But the hypothetical is simply not realistic that you have foreign nationals—that I am aware of, there are no foreign nationals employed under the terms and conditions—hired here in the United States by the Federal Express pilots. Now they may have some other pilots.

    Secondarily, I guess you can turn the question around. Suppose those French pilots wanted to have some type of labor disruption, would they be free to strike on Mondays and Fridays outside of the Railway Labor Act?

    I would not think that would be appropriate, either.

    I think for consistency, we have taken the position all along that the U.S. laws that enable the negotiations that provided the contract, that provided the solution steps, negotiation, mediation, arbitration, all designed to promote transportation, should apply uniformly across the system.

    If they happen to domicile those pilots in another country, it has been, again, our consistent practice in our 60 plus or 70 plus year history, I am not aware of any conflict that has arisen or foreign law intervention that would stop the application of the law as we understand it to be under the Railway Labor Act.

    Mr. LIPINSKI. Of course, you are saying that as long as that has been the case, that you really do not have to worry about it?

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    Capt. BABBITT. Well, I find it interesting, though, that when pressed as to where we would go for the final solution, we wind up back in U.S. courts.

    Then would we use U.S. law in those courts, and I think——

    Mr. LIPINSKI. I would certainly assume that we would.

    Capt. BABBITT. Yes.

    Mr. LIPINSKI. I understand, based upon information supplied to me, that actually the situation with the pilots in foreign domiciles only really applies to FedEx because there are no other American air carriers that have any pilots in foreign domiciles.

    Is that correct?

    Capt. BABBITT. We currently do not, but we have as recently as 6 months ago, and any particular carrier, when they laid out their route structures, might decide that it was economically advantageous, or for some other reason, for scheduling purposes, might want to open a domicile in a country.

    Mr. LIPINSKI. Could you tell me who that carrier or carriers are that happened 6 months ago and where they work?

    Capt. BABBITT. Yes. The carrier, United Airlines, had temporary domiciles in Geneva. They also had them in Paris, France.
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    They have had temporaries in London. I cited a number of cases where we have had TWA pilots based in Cairo, and there was a 10-year, probably the longest standing domicile was a 1947 through 1957, Northwest Airlines had crews based in Tokyo.

    Mr. LIPINSKI. And the Railway Labor Act applied in all those situations?

    Capt. BABBITT. Yes, sir.

    Mr. LIPINSKI. As far as the American carriers were concerned?

    Capt. BABBITT. There was never a conflict. There was never a question that it was applicable throughout that period of time.

    And many of the contracts that we have in force today have provisions in them for foreign domiciles to be created, you know, as Mr. Taylor suggested. But, again, I go back to the key piece here. It is somewhat disingenuous to suggest that we could get along and create these solutions and then turn right around and say, we have no ability to enforce them. No labor law to prevail to provide the enforcement for the employee who went along and negotiated the solution.

    What I cited was a one-way street. You could get me out under my contract in the U.S., but when I get there, I have no way to get home because you are going to tell me that the labor law does not apply any longer now that I have been out of the country.
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    Mr. LIPINSKI. Maybe we could come back and try it in the state court in Tennessee.

    And with that, I will turn it back to a former judge from Tennessee, the Chairman of this Committee, Mr. Duncan.

    Mr. DUNCAN. Thank you. Thank you, Mr. Lipinski.

    Mr. Taylor, both of you have been very effective witnesses, but Mr. Taylor, I want to go back to something that you have been getting close to most of the day, but let us just talk about this in a plain, down to earth, non-technical way.

    What difference would it make to Federal Express if this Amendment was passed?

    I mean I hear you saying that Federal Express is real good to its employees and I mean are you treating some of these employees who are domiciled overseas differently?

    Mr. TAYLOR. No.

    Mr. DUNCAN. I have heard you say several times that you feel it could lead to conflicts in the future, but then I think I have also heard you and Captain Babbitt say that there have not been any conflicts in the past.
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    Can you help me out there?

    Mr. TAYLOR. Yes.

    Mr. DUNCAN. Explain to me what the difference is—what the difference would be.

    Mr. TAYLOR. Yes, sir.

    Mr. DUNCAN. The practical effects.

    Mr. TAYLOR. I will do my best.

    FedEx is growing internationally, and we believe, as time goes by, opportunities will present itself to fly into more countries, ship more cargo, not from the U.S. to other countries, but we would like to think that some day, we could pick up cargo from France and ship it to England or all over the world—shipping not related to the United States.

    And we recognize, however, that when you conduct business in a foreign country, you have to comply with their laws. You have to do what they ask you to do.

    We are very concerned that we are going to be hampered by having a Railway Labor Act apply in our ability to operate in those countries. We want to have the flexibility to work with our union, to comply with French law, German law, whatever law it is that we are forced to deal with, and we are concerned that if the American law, labor law, is applied extraterritorially, which would be unique because there are few if any other labor laws applied extraterritorially, we are concerned that we will not be able to operate in those countries, we will be forced to either not compete or to withdraw, or perhaps give some pretty significant, unreasonable concessions in order to get our union to go along with operating in those foreign countries.
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    Mr. DUNCAN. Federal Express is—did you say 130,000 employees?

    Mr. TAYLOR. Yes. Yes, sir.

    Mr. DUNCAN. How many would be affected by this Amendment?

    Mr. TAYLOR. Today, we have 3400 pilots, and so it would affect those 3400 pilots.

    As we grow, who knows how many pilots we will have.

    Mr. DUNCAN. But of those 3400 pilots, how many of those are domiciled overseas today.

    Mr. TAYLOR. Today?

    Mr. DUNCAN. Today.

    Mr. TAYLOR. Sixty. Fifty or sixty. Something along those lines.

    Mr. DUNCAN. Fifty or sixty?

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    Mr. TAYLOR. Yes, sir.

    Mr. DUNCAN. Out of 3400?

    Mr. TAYLOR. Yes, sir.

    Mr. DUNCAN. Going to something that Mr. Taylor just mentioned, he said this would be unique.

    Do you know of any situation where we have applied any other labor laws in this way overseas to other countries?

    Capt. BABBITT. Actually, counsel has a suggestion here, and I am going to defer to counsel.

    Mr. DUNCAN. Okay. Sure. Sure.

    Mr. BAILEY. Actually, it would not be unique if the Railway Labor Act were extended extraterritorially. Labor laws have frequently been extended extraterritorially, among them, the National Labor Relations Act has been read to apply to foreign—to U.S. vessels in foreign waters.

    The Age Discrimination Act has been given extraterritorial application.

    The Americans With Disabilities Act has been given extraterritorial extension.
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    And Title VII was amended fairly recently to have, some extraterritorial applications, Title VII of the Equal Employment Opportunities Act, or Civil Rights Act.

    Mr. DUNCAN. Well, apparently we have some disagreement on—I have been told that some of these very laws that you just mentioned have been applied to overseas—have not been applied to overseas, so I do not know what the problem is there.

    But do you think that—Captain Babbitt, do you think that we would object in this country if foreign countries started applying their laws here in the United States?

    Capt. BABBITT. No, sir. We currently, you know, see that an operation almost on a daily basis. We have foreign crews en route in the United States at any given moment, you know, 24 hours a day.

    I have heard of no case ever where perhaps some conflict happened and that crews said, ''No. No. We do not want to adjudicate this back in our French quarter or German quarter. We would rather do it right here in Cleveland.''

    I mean it simply does not happen. There are no cases of that.

    There are crews, those are foreign nationals flying for foreign carriers who are using a variety of rights, whether they are fifth freedom or fourth freedom or first freedom rights, whatever they are, they are in our country, and our labor—our bilaterals are absolutely silent. They do not make reference to labor relations laws and their effect.
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    So I think that is somewhat of a misnomer to suggest that there is a conflict there, as well.

    Mr. BAILEY. Mr. Chairman, I just wonder if I could add one thing to Mr. Babbitt's statement?

    Mr. DUNCAN. Yes.

    Mr. BAILEY. There is one case, and since Mr. Taylor mentioned it before, I wanted to just clarify it, and that is the TACA case. There was an El Salvador carrier that had set up a domicile in New Orleans, but that was really a unique situation because when the domicile was set up, there was no contest by TACA that the Railway Labor Act would apply. When ALPA organized those pilots, TACA did not contest that.

    So there was really no question or no court issue or no dispute over whether the Railway Labor Act applied to those El Salvador pilots who were based in New Orleans.

    Ultimately, El Salvador did require TACA to remove those pilots back to El Salvador, so we no longer represent them.

    Mr. TAYLOR. Mr. Chairman?

    Mr. DUNCAN. Yes.

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    Mr. TAYLOR. If I may. I think you pointed to an important issue here which is, it is my understanding certainly this is a very complex area of the law, and a reasonable man—reasonable minds can differ. But it is clearly my understanding that the National Mediation Board would take the position that if a foreign carrier has pilots stationed in the United States, flying out of the United States, and if those pilots wish to be represented by ALPA or any other union, that the NMB would hold an election and would certify ALPA or whatever union it is to represent those pilots because the nexus is between those pilots and the United States and not whatever country their carrier might be.

    The NMB asserts jurisdiction over foreign carriers on a regular basis.

    Capt. BABBITT. I would note that that jurisdiction has thus far been restricted to ground employees, and that is not what this Bill is about. This would be a hypothetical, and I do not think the NMB has ever been faced with the question, and therefore, it is just a hypothetical.

    Mr. DUNCAN. Well, Mr. Blunt got into this just a little bit, but since you have testified a couple of times, Captain Babbitt, that in the entire history, as far as you know, there has not been any conflicts between the U.S. and foreign labor laws, would you object to any—to a provision that this would apply, as long as it did not conflict with some type of foreign labor laws?

    Capt. BABBITT. I cannot think of an instance where there ever has been a conflict. You know, our goal here is to apply uniformly our labor laws to our citizens.
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    I think it is perhaps a little deceiving to go to citizens who—put yourself—I will give you a hypothetical where a citizen accepts a job with Federal Express and develops 5 or 10 years of seniority and becomes a very junior captain and finds he has been assigned to Subic Bay. Those are—assigned, which is common in the airline business.

    Now, through no action of his own, he finds that he or she is now domiciled in a foreign country and the labor laws that he went to work under no longer apply.

    And I think that is somewhat——

    Mr. DUNCAN. Well, obviously, that is not the situation I am talking about. What I am saying is like Mr. Blunt asked, what if you have this legislation saying that the Railway Labor Act would apply, unless it was in some type of conflict with the labor law of that country in which the pilot found himself.

    Capt. BABBITT. In only that narrow instance of a particular regulation or proviso in the law?

    Mr. DUNCAN. In other words, what you are saying or what you are getting is, you are getting this—you are getting this amendment. In that hypothetical situation, you are dealing this amendment with a very minor compromise there, I guess you would say, even for your testimony, you say it has never happened.

    Capt. BABBITT. That is correct. I have not seen a conflict, and I guess if it was crafted very narrowly to a specific conflict, that would be—at least we would be a little further along.
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    Mr. DUNCAN. See, you know, when you said a while ago that you talked about applying the law of one country here, one country there, one country there when you land.

    Of course, that is the situation we are in now with all the—we have got 75 bilateral agreements, and all these bilaterals, I certainly have not read them, but I understand or I am told that all these bilaterals say that the law of that country applies.

    Capt. BABBITT. Not the labor law. Not the labor law.

    Mr. DUNCAN. So you are saying that they specifically say that the labor law of those countries does not apply?

    Capt. BABBITT. Well, they are silent on the issue and there has never been any question, to my knowledge, that there has been a labor relations law implied in a bilateral.

    I am familiar with, in the past, certain countries when negotiating bilaterals, have made a condition of employment. Some foreign nationals, especially those without large carriers, to have reciprocal service. That is different.

    Mr. DUNCAN. Okay. Well, thank you very much——

    Mr. RAHALL. Mr. Chairman?
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    Mr. DUNCAN.——for testifying.

    Mr. RAHALL. Mr. Chairman, may I ask one last question?

    Mr. DUNCAN. Yes, Mr. Rahall.

    Mr. RAHALL. Thank you.

    Captain Babbitt, I know that I do not include flight attendants in this legislation. They are not covered, and in the years that we have been discussing this, they never have come to me and expressed any interest.

    Can you possibly tell the Subcommittee why that is true?

    Capt. BABBITT. Well, actually, over the years, as you are very familiar, we have attempted to secure this clarification for a number of years. And you are correct in that the flight attendants did not, in the past, express much interest.

    However, I have no objection whatsoever. They are operating in a similar environment, and I have no objection to their inclusion. It is simply that in the past, they did not have the concern.

    Perhaps, today with a globalizing world and more domiciles coming forward, it has attracted more of their concern.
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    Mr. DUNCAN. All right. Thank you very much. And gentlemen, thank you. You have been very fine witnesses.

    We will call forward at this time panel number two, and that panel number two consists of Captain Michael P. Cronin, who is Chairman of the Legislative Affairs Committee for the Allied Pilots Association, Mr. David A. Borer, who is General Counsel for the Association of Flight Attendants of the AFL–CIO, and Mr. Scott C. Petersen, who is counsel to the FedEx Pilots Association.

    The notice of the Subcommittee hearings lists the witnesses, and that means that Captain Cronin, you would go first. You may proceed with your testimony.

    Thank you, each one. Thank you for being with us today.


    Capt. CRONIN. Thank you, Chairman Duncan, members of the Committee. I am grateful for the opportunity to appear before the Committee today. My name is Michael Cronin. I represent the Allied Pilots Association and the Allied Pilots Association represents the pilots of American Airlines.

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    At first glance, this bill appears to be pro-labor legislation. Perhaps some of you are opposed to it for that reason.

    I am going to ask you to reconsider that stance for the simple reason that if this is a pro-labor bill, it is only so in the narrowest sense.

    The real purpose of this bill is to insure there is law, and the APA prefers law to chaos. Let me explain.

    We recently concluded a negotiation with our company, American Airlines, that extended over 3 years. During the entire course of that negotiation, the Railway Labor Act operated to prevent either party from taking any unilateral action.

    When all the markers have been met in such a way that a strike would be legal, in fact, the APA, with the greatest reluctance, declared a strike. That strike lasted exactly 14 minutes, and it was interrupted by the President with authority given to him by the Railway Labor Act.

    As soon as that had been done, another mechanism, also a part of the Railway Labor Act, was put in place, the Presidential Emergency Board. That process resulted in an agreement which was ratified by the membership.

    What you may not know is that the final part of the Railway Labor Act also played a role in ratification, because had we failed to ratify that contract, then Congress could have stepped in and taken any action that it saw fit. The membership did not view that possibility very happily, and that influenced the votes of a great many of our members, and a contract was ratified.
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    Let us go on to the UPS strike. The ground employees of UPS are organized under the National Labor Relations Act, which is quite different and gives the Government much less authority to intervene. The contrast between their strike this summer and ours is quite striking.

    The American Airlines was strictly a media event. There was no economic impact that could be seriously measured. Had there been a strike, the impact would have been enormous.

    In the case of the UPS strike, nobody could prevent the UPS employees from going on strike, and the result was a substantial labor victory.

    Most managements would prefer to be under the Railway Labor Act.

    In fact, that is the case with Federal Express, as was pointed out earlier today at this hearing, last year at this time, there was a filibuster on the Senate floor because legislation had moved through that, ensured that Federal Express operations were, in fact, covered by the Railway Labor Act, rather than the National Labor Relations Act.

    Federal Express wanted the Railway Labor Act in that situation, and they were successful. Now it appears that they prefer to have no law.

    I must comment in Mr. Taylor's testimony, at no point did he suggest that Philippine law should apply to their negotiations in the Philippines. He simply wanted the Railway Labor Act not to apply.
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    There is one thing that the opponents of this legislation, including FedEx have not taken into account. This also has to do with the American Airlines strike.

    Suppose we had had a foreign base and suppose American had not recognized our union at that foreign base. When we went on strike and when we were ordered to return to work, which we did, that base would have been beyond the jurisdiction of the President, and for that matter, the Congress. A strike could have continued in another form at off-shore locations.

    I do not think that is what anybody wants. The Railway Labor Act is a balanced law. It enforces the status quo. It promotes solutions. It ensures continuity of service.

    It does not in any way assure labor success. It does not promote the existence of unions. In fact, it is difficult to organize a union under the Railway Labor Act. That is one reason why FedEx wanted to be covered by that Act, rather than the National Labor Relations Act.

    It does not limit non-union operations, and it grants the Government broad power to intervene.

    The APA benefits from the Railway Labor Act, but so does our employer and so does the public. It is a good law and this law would logically extend it to all the operations of the U.S. certified carriers and remove an ambiguity from the law.

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    One more comment, based on testimony that has been given. Discussion was made about foreign pilots being subject to foreign laws.

    To be a pilot for a U.S. registered, certified airline, you must hold a U.S. license. To hold a U.S. license, you must be fluent in English and agree to comply with all of our regulations. So anybody in that position has already substantially agreed to comply with U.S. law.

    It is not a strange situation. It is a situation they have selected and volunteered for by seeking that employment.

    Thank you very much for considering my comments.

    Mr. DUNCAN. Thank you very much, Captain Cronin.

    Mr. Borer?

    Mr. BORER. Thank you, Mr. Chairman, and members of the Subcommittee.

    My name is David Borer and I am the General Counsel of the Association of Flight Attendants, AFL–CIO.

    The AFA represents 41,000 flight attendants based on four continents with 27 different airlines. Thank you for this opportunity to testify today on the issue of the extraterritorial jurisdiction of the Railway Labor Act.
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    I would also like to thank Representative Rahall for introducing H.R. 991. The AFA supports this legislation in order to make clear that airline operations outside the U.S. fall within the jurisdiction of the Railway Labor Act.

    At the same time, we believe it is essential that flight attendants, who are a crucial link in airline safety, be included in this legislation.

    Flight crews in international operations at U.S. airlines are uniquely situated for purposes of the labor law. When Title II was added to the Railway Labor Act of 1936, at least two U.S. airlines were heavily engaged in international flying.

    Although the Congress must have known at that time of those operations, such flying was not expressly excluded from the Railway Labor Act.

    Today, with airlines at the forefront of the globalization of the economy, cross border employment of flight attendants is a reality that has quickly overrun the parameters of the Act.

    Today, there are over 2,000 AFA members based in London, Paris, Frankfurt, Hong Kong, Taipei, Tokyo, Santiago and in San Juan, Puerto Rico. These include U.S. citizens who have transferred overseas, as well as local and third country nationals hired locally by the airlines.

    We represent these flight attendants by mutual agreement with the airlines under our standard collective bargaining agreements.
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    Some U.S. airlines also have chosen to conduct operations outside the U.S., independent of the Railway Labor Act and the terms and conditions that apply to the U.S. employees. Airlines that the AFA deals with have such operations in Bangkok, Singapore and Tel Aviv. Other non-AFA airlines have similar operations.

    The primary reason AFA supports this Bill is to ensure the certainty and enforceability of our contracts.

    The federal courts, as we have heard today, have ruled against extraterritorial application of the Railway Labor Act, citing the absence of a clear Congressional intent on the issue.

    In one case, when a contract dispute arose between Pan Am and its flight attendant union, the airline suddenly disavowed the entire contract, despite at least 13 years of its continuous, undisputed application to the company's intra-European operation.

    The Court ruled that since the RLA did not expressly reach to foreign countries, neither could the contract. The union and the flight attendants were denied the benefit of their agreement.

    We must know whether our contracts are enforceable or the entire basis for stable labor relations will be undermined. If both parties are free to abruptly disavow negotiated terms and conditions of employment, collective bargaining itself could soon be rendered impossible.
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    The other important reason to amend the Act is to address the potential conflict of laws issues that stem from the multiple jurisdictions in which flight crews operate.

    One U.S. airline is just a step away from creating stateless employees, having already required flight attendants hired overseas to waive their rights under their own country's labor laws.

    If that same airline were to follow Pan Am's lead, disavowing the applicability of the Railway Labor Act, those flight attendants would be left unprotected by the laws of any country, at least in the opinion of that airline.

    In many instances, it would be impossible to comply with the demands of the labor laws of various jurisdictions simultaneously. Labor laws in some countries, for example, permit non-exclusive representation, whereas U.S. labor law is based on the principle of exclusive representation.

    Management and labor are left unsure of the bargaining rights of workers who are potentially subject to the jurisdiction of both countries' laws.

    Another more troublesome conflict involves the rules governing strikes and lockouts. The RLA contains nearly interminable negotiations and mediation procedures designed to force the parties to reach negotiated settlements without resorting to strikes and lockouts.

    French law, to take an example, is a contrast in that it requires a mere 5 days' notice from the union prior to engaging in a strike. A strike would not be confined to either country in its effect, and yet the same strike would clearly conflict with the law of one country or the other.
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    These issues should not be left to labor or management to determine on a case-by-case basis.

    The worst case scenario involves countries where the local labor law is directly at odds with our accepted standards of labor relations. At least one U.S. airline is known to have considered establishing a flight attendant base in Jakarta. Indonesia's record on labor issues is well known.

    The leader of the free trade union movement in Indonesia is currently in jail without trial because of his union activity.

    In numerous countries with Communist or autocratic regimes, free trade unions and fundamental rights of workers are nonexistent.

    Much as Mr. DeFazio pointed out earlier, we have several hundred flight attendants who are currently at risk of the application of Chinese law since Hong Kong reverted to China in July.

    Globalization may soon take U.S. airlines and their flight crews to more of these jurisdictions. The only way to protect against violations of fundamental rights that we take for granted is to amend the Railway Labor Act.

    Passage of H.R. 991 is an important step to ensure the jurisdiction of the known and tested subsidy provisions of the Railway Labor Act.
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    AFA does not propose any other changes to the substance of the Act. Those procedures work well and have provided stable labor relations for decades.

    The Railway Labor Act is designed primarily to encourage labor and management to make and maintain agreements and to avoid interruptions in commerce. Those goals are threatened throughout the industry unless the Act applies to all segments of the industry.

    The AFA urges the Subcommittee to amend H.R. 991 to cover flight attendants and then to move this Bill forward to ensure the Railway Labor Act continues to provide for stable labor relations throughout the airline industry, wherever it operates.

    Thank you, Mr. Chairman.

    Mr. DUNCAN. Well, thank you very much, Mr. Borer.

    Mr. Petersen?

    Mr. PETERSEN. Mr. Chairman, members of the Subcommittee, my name is Scott Petersen. I am with the law firm of Seham, Seham, Meltz & Petersen. We serve as counsel to the FedEx Pilots Association, which is the independent labor organization representing 3400 pilots at Federal Express.

    I appreciate the opportunity on behalf of the Federal Express Pilots Association to speak to you today on this important issue.
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    Perhaps one of the advantages of going last is we do not necessarily have to rehash a lot of what has been said in other testimony in this case, but there are a couple of points which I would like to focus on.

    First of all, what we are dealing with in commercial aviation is a global marketplace. As has been previously discussed, Federal Express Corporation came to the legislature of this country last year and basically said that because they were an international organization, because they operated a system that spanned the globe, that they needed to be covered under the Railway Labor Act.

    Why would they need to be covered under the Railway Labor Act?

    Because as Captain Cronin has pointed out already, this is an Act under which, if they have a choice, employers would rather be under the Railway Labor Act because there is a process, a very deliberate process by which agreements are made and enforced. It is a process which allows the parties, yes, to reach agreement, but also prevents the parties from taking unilateral action without exhausting those processes.

    For labor unions, it is a question of a right to strike. Let us be honest about it. That is the tool that labor has.

    Earlier today, you heard testimony from Mr. Taylor, stating that they were concerned—that is, Federal Express Corporation, that this amendment would provide undue leverage to labor if we extend it overseas.
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    Well, the fact of the matter is that Federal Express knows full well that under the Railway Labor Act the leverage goes to the employer because the employees, if they are not represented under the Railway Labor Act, have all the rights of employees not covered by the Act, including wildcat strikes, et cetera, which would be disruptive to a global marketplace, to a worldwide system, to a system such as Federal Express.

    Yes, the parties can negotiate agreements, and that has occurred, as Captain Babbitt pointed out to you earlier. But the fact of the matter is that those agreements are only good if they can be enforced. And as Mr. Borer pointed out earlier, in the Pan Am case that was the problem, the courts refused to enforce the agreement that the flight attendants had made.

    And so it is disingenous, I think, for Mr. Taylor to suggest on behalf of Federal Express that, in fact, we only need to go to the U.S. courts to resolve the coverage of the Act, when, in fact, the courts have said, ''We are not going to act on this type of matter. This is extraterritorial and there has been no intent expressed by Congress,'' and the case is dismissed. That is why this Amendment is needed.

    There is also the issue of employee rights to be considered. Yes, Federal Express is a good employer and they have done a number of positive things for their employees.

    But the fact of the matter is today that an employee based in Subic Bay can be summarily dismissed, without a right to a hearing, without a right to arbitration, without a right to anyone second guessing the opinion of the Chief Pilot and of upper management.
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    That same pilot, if he were based in Memphis, would have a right to a hearing today because there is an interim agreement covering dispute resolution, and specifically, discipline, with to an arbitration proceeding. That is our agreement with the carrier.

    So that by the fact that this pilot might have been assigned, as opposed to having requested to go to Subic Bay, not going there by choice, he has lost the right to have his disciplinary matter heard by an impartial arbitrator.

    Finally, there is this issue of sanctity of agreements.

    We certainly hope during the current negotiations with Federal Express to be able to negotiate an agreement that will also cover the Subic Bay pilots, and perhaps Federal does so now in good faith. But whether it is because of economic times or whether it is because of pressures, competition, whatever it is, if the same corporation decides several years from now, when a grievance is filed by the association on behalf of pilots based in Subic Bay, and that—that grievance is denied, much as was the case of the flight attendants of Pan Am, because the carrier now claims that there is no extraterritorial application of the Railway Labor Act and we go to Federal Court and are told there is no extraterritorial application of the Railway Labor Act, we will have solved nothing.

    Therefore, we urge your support of this Amendment to the Railway Labor Act.

    Mr. DUNCAN. All right. Thank you very much. Unfortunately, we do have a vote going on, and we will have to be in a very brief recess to go cast this vote. Thank you.
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    Mr. DUNCAN. We will go for first comments or questions, closing comments and questions to Mr. Rahall, the sponsor of the legislation.

    Mr. RAHALL. Thank you, Mr. Chairman.

    Let me thank the panel for their testimony, and particularly, Mr. Borer, for answering my previous question that I have asked Captain Babbitt.

    Let me say to you, Mr. Petersen, that—first, thank you for your statement, of course, in support of the Bill. And I think as you wanted to stress, as well, in your testimony, it is important to note that as the law now stands, it is possible for your union to win a commitment regarding foreign operations in bargaining and even heavier rights, if indicated by an arbitrator, only to later then have the courts refuse to require the air carrier to comply with its own agreement.

    Is that not a correct assessment?

    Mr. PETERSEN. Yes, Congressman, it is.

    Actually, in the Pan Am case, my understanding is that the flight attendants were not even allowed to arbitrate it because the company held the Railway Labor Act as not applicable, and therefore, that the system board was no longer in effect as to that employee group or as to that being the German subbase.
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    But, certainly, it would be also indicative of another situation. There are very narrow grounds on which you can overturn an arbitration award under the Railway Labor Act, and certainly a lack of coverage of the Act would qualify as one of those grounds.

    Mr. RAHALL. Okay. Captain Cronin, let me also stress a point that you made.

    You, of course, reiterated the fact that the American Airlines recent strike lasted all of, what, 14 minutes, and that the authority that the President used for his intervention comes from the RLA and stopped what could have been a major interruption of air service if performed worldwide by American Airlines.

    But I think you really went to the heart of the matter when you said that a corporation should not be able to avoid recognizing the duly recognized representatives—duly elected, I should say, representatives of its employees simply because its operations extend beyond the shore of the United States.

    So your hope that the Congress would not allow them to escape into a lawless environment is well taken, and I hope that is one that my colleagues will recognize, too, in further consideration of this Bill.

    And I found, Mr. Borer, your point, when Title II of the RLA was added in 1936, that at that time, there was no real need to consider the potential international implications of the law because the airline industry, of course, was in its infancy.
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    If you people could then imagine international air travel as we know it today and the complexities of such, as we know it today, so I think that is a point well taken that you made, and it has not fallen on deaf ears here.

    Mr. BORER. I would just clarify that a little bit, Mr. Rahall.

    That is, as Captain Babbitt testified earlier, there were two airlines at that time, Pan Am and Panagra, that were flying internationally, and, in fact, their operations at that time were exclusively international.

    So as early international U.S. Postal Service contractors, it is fairly clear that the Congress would have been aware at that time that, you know, there were such international operations, and, again, took no steps, as Mr. Babbitt testified, took no steps to exclude such operations from the Act.

    And, in fact, there are references in the Act that it does apply to operations in domestic and foreign commerce. So we believe it was intended to apply that way, and the courts just got a little bit off the track.

    Mr. RAHALL. Okay. Well, I appreciate your clarification there. Certainly, it still was not envisioned at that time to be what it is today.

    Mr. BORER. Absolutely. Absolutely.

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    Mr. RAHALL. Thank you. Thank you.

    Mr. DUNCAN. Thank you, Mr. Rahall.

    Mr. Lipinski.

    Mr. LIPINSKI. Thank you, Mr. Chairman.

    I want to congratulate this entire panel on their very articulate presentation of their point of view. If I had any doubts whatsoever about the need for this legislation, certainly your testimony has relieved me of any doubts whatsoever.

    Particularly you, Captain Cronin, I thought your presentation of exactly what the situation was or is was really very much on point, and I appreciate the testimony of everyone on this panel.

    I know what direction I am going in. Consequently, I will not take up anyone's time, and I will yield back to the Chairman.

    Mr. DUNCAN. Well, thank you very much, Mr. Lipinski.

    Mr. Cooksey?

    Mr. COOKSEY. Well, gentlemen, let me say this. I have not—my reaction to this is I have not been convinced by anything I have heard today that this would place an undue burden or any tremendous problems in applying this Act. I am still willing to listen to others that might wish to point out problems or potential problems that I am not seeing at this time.
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    On the other hand, I do not know that there is a tremendous need for this, although I certainly—I think I might look for a way to go ahead and move on this legislation.

    But can any of you give me a natural example of where U.S. pilots or flight attendants have suffered because the Railway Labor Act has not been applied overseas prior to this time?

    Mr. PETERSEN. Mr. Chairman, if I might. I mean the example that I gave to you——

    Mr. COOKSEY. You gave an example of a potential problem years down the road, but I remember that.

    Mr. PETERSEN. Well, but there are real problems now and the disciplinary example that I cited to you are, in fact, disciplinary proceedings which occur today, and that is that in Subic Bay, a pilot can be called in by his Chief Pilot and can be disciplined, summarily disciplined—

    Mr. COOKSEY. Well, I understand that.

    Mr. PETERSEN.——without a right of review.

    Mr. COOKSEY. You are saying that that could happen, but——
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    Mr. PETERSEN. It has happened.

    Mr. COOKSEY. It has happened? It has?

    Mr. PETERSEN. Yes, sir.

    Mr. COOKSEY. How many times?

    Mr. PETERSEN. I do not—I do not quibble of whether or not the discipline was warranted. That is an issue to be decided.

    But the lack of due process for that individual to have the same rights, to have that disciplinary process imposed by the company reviewed through the process that was envisioned by the Act is lacking in Subic Bay. Those pilots do not have the right to review.

    And because of that, that same pilot would have the right of review if the same thing happened to him and the Chief Pilot——

    Mr. COOKSEY. All right.

    Mr. PETERSEN.——made the same decision in Memphis.

    Mr. COOKSEY. Yes. I understood. I heard you when you said that.
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    Mr. BORER. Mr. Chairman, there is also the Pan Am case itself that those flight attendants operated under a contract for 13 years in Germany, working for Pan Am. And suddenly, when it came to a particularly difficult dispute, the company decided to void out the entire contract as to those workers.

    So there was a very specific and extreme result in that particular case, and they were left with no remedy, either here or in Germany.

    Mr. DUNCAN. All right. Captain Cronin?

    Capt. CRONIN. Well, I hesitate to bring this up because the APFA, who represents American Airlines' flight attendants, has chosen not to testify.

    From an outsiders point of view, and I emphasize that is what I am. I do not represent the APFA. It seems to me that they have been damaged by the absence of this law.

    American employees, a great many flight attendants based in South America who are not represented by the APFA, and there are many problems that go along with that, in addition to the things that have come up with the APFA.

    There is a question in some cases about their English language ability, and in fact, the FAA has no regulation that requires English language proficiency for flight attendants. There is a move afoot to fix that, but it has not been done.

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    There are many problems that result from the Balkanization of the employees of a U.S. flag air carrier.

    Mr. DUNCAN. All right. Well, gentlemen, thank you very much for coming to testify. I think you have been a very good panel, and we certainly appreciate your being with us today.

    That will conclude today's hearing.

    [Whereupon, at 4:32 p.m., the Subcommittee was adjourned.]

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