AMR Wage Averaging Found to Violate Collective Bargaining Agreement
February 8, 2008
After a lengthy legal battle, an arbitrator recently ruled that AMR’s wage averaging overtime policy was a violation of IAEP Local R12-52’s collective bargaining agreement.
As a part of this decision, employees affected will be made whole, and employees who may have benefited from the averaging will not face repercussions. In the future, AMR must pay the weighted average per pay period if it is more than what the employee would normally receive otherwise, but will receive the negotiated contract rate if it is higher.
“Local R12-52 members will receive the thousands of dollars that they should have gotten when they originally worked their overtime,” said IAEP National Director Matthew Levy. “This victory also means that our members will go back to receiving more than just the minimum required by law.”
Following an audit of their Seattle operations by the Department of Labor, AMR management was forced to change their overtime payment policy to a weighted wage averaging method. The weighted average was first instituted by the DOL because they found that when employees worked different shifts at different rates, employers would often have them working the higher paying shifts in the earliest part of the day or week so that they received overtime pay on the lowest paying shifts.
Although the DOL audit only addressed the Seattle operations, in January 2005 AMR unilaterally changed all of their operations to the weighted average method. The DOL intended this to be used as a minimum requirement, but AMR agued that they were only required to pay the weighted average regardless of what the collective bargaining agreement outlines.
Employees who would have been paid more through the collective bargaining agreement’s pay rates were forced to receive only the weighted average. The IAEP immediately filed a grievance on behalf of Local R12-52 and the numerous members who suffered financial harm.
IAEP Attorney Linda Mouzon represented the union at arbitration, arguing that the DOL only required a change in Seattle because the current overtime policy was not sufficiently meeting the requirements of the Fair Labor Standards Act.
Arguing that the collective bargaining agreement between AMR and Local R12-52 was violated, Mouzon explained that under the wage averaging method some employees lost significant overtime monies because this was simply the minimum requirement of the DOL. AMR stated the change was required, and argued that if an award required them to pay some employees more than the waited average, “equity demands that the Union reimburse the Employer” in the amount of these additional monies.
The arbitrator agreed with Mouzon and ruled in favor of the IAEP. The arbitrator stated that AMR violated the contract “when it paid employees overtime calculated on the basis of a weighted average of the straight time hourly wage rates paid for a week when that calculation resulted in an overtime payment lower than that required by the established application of the overtime provisions of the Collective Bargaining Agreement.”
The arbitrator also ordered AMR to return to the previous method of overtime payment in Victorville and rejected their argument that the IAEP be responsible for reimbursement of the additional monies paid.
“This is a huge victory for all of our members suffering from weighted wage averaging,” said Levy. “Attorney Mouzon did an amazing job during arbitration and fought hard to ensure the members of Local R12-52 received the compensation they truly deserve.”