A Southwest Airlines jet leaves Dallas Love Field in this July photo. (Terry Maxon/DMN)
Southwest Airlines and the union representing about 6,000 customer service agents and customer support and services representatives said Wednesday that their negotiators have reached a tentative agreement.
The deal, which must be approved by the International Association of Machinists and Aerospace Workers-represented employees, is the first labor deal reached by the Dallas-based airline out of a number of seven contracts currently in negotiations.
“After more than two years of negotiations, with many distractions and ups and downs, your negotiating committee has reached a tentative agreement with the Company,” IAM District Lodge 142 president and general chairman David Supplee said in a message to members. “Without your solidarity and support, this would not have been possible.”
“I applaud the efforts of both parties in reaching a tentative agreement that incorporates rewards and incentives for our hard-working customer service agents and customer representatives, while remaining mindful of Southwest’s low cost structure and longterm success,” Southwest chief operating officer Mike Van de Ven said.
“Reaching mutually beneficial contracts for Southwest and our People remain a top priority for us, and I’m hopeful that this tentative agreement is the first of several to come in the near future,” said Van de Ven, an executive vice president.
The four-year contract, which will go before the membership for a vote, includes pay raises and a “me-too” clause.
“The IAM is leading the contract settlements at Southwest Airlines,” the union said in a fact sheet outlining details of the proposed contract. “We demanded and received written assurances (‘me too’) that if the company later provided larger percentage wage rate increases, larger percentage company 401k contributions and retroactive pay for another workgroup in ground ops, our members would receive the same value on top of all the other provisions of our contract..”
The current contract became amendable in October 2012.
Among the details
– Pay rates would go up 1.5 percent each year from 2014 through 2017 and a 2 percent raise in 2018. That would leave pay rates up about 8¼ percent after the last pay raise.
– Employees who are at the top of the pay scale or reach it during the contract will get pay raises (1.5 percent in 2014 and 2016 and 2 percent in 2018) and 1.5 percent cash bonuses in 2015 and 2017.
– Signing bonuses of $1,200 to $1.740 for full-time employees, depending on years of service, and $600 to $870 for part-time employees.
– A profitability bonus of 0.5 percent if the company reaches or exceeds its goal of a 15 percent return on invested capital.
– A $1,000 bonus for perfect attendance or $500 for four or fewer days missed.
Other Southwest labor groups in negotiations include pilots (Southwest Airlines Pilots’ Association); flight attendants (Transport Workers Union Local 556); ramp, operations and provisioning employees and freight agents (TWU Local 555); materials specialist (International Brotherhood of Teamsters); mechanics (Aircraft Mechanics Fraternal Association); and facilities maintenance technicians (AMFA).
Keep reading for details of the proposal from IAM 142.
Compensation:
Pay increases over life of agreement:
CSA and CS&S – In scale, 8% increase in hourly base wage from 2014-2018. Steps 1-10.
CSA top of scale—$26.88 current, increases to $28.24 at end of agreement. Total of 5% fixed and 3% cash bonus from 2014-2018.
CS&S top of scale—$26.49 current, increases to $27.84 at end of agreement. Total of 5% fixed and 3% cash bonus.
Ratification Bonus:
Step 0-5, FT $1,200, PT $600
Step 6-10, FT $1,400, PT $700
Step 11, FT $1,740, PT $870
Profitability Bonus:
A .5% payout of 401K eligible earnings to eligible employees if a 15% Return on Invested Capital (ROIC) is reached. Variable potential payout for 2015, 2016, 2017 and 2018 if 15% ROIC or greater is reached. Must include burden of payout.
| Year | In scale | Top of scale |
|---|---|---|
| DOR 2014 | 1.5% | 1.5% |
| 2015 | 1.5% | 1.5% cash bonus |
| 2016 | 1.5% | 1.5% |
| 2017 | 1.5% | 1.5% cash bonus |
| 2018 | 2% | 2% |
Cash bonus based on prior year’s compensation (401K eligible earnings)
Productivity bonus for Attendance:
Perfect attendance – $1000.
Near Perfect attendance (4 or less disqualifying days) $500.
Shift Differential increase by $5 per month to each premium.
Vacation Improvements:
The “free” day per month will be changed to Flexible Time Off (FTO) days that can be banked and used at anytime via a bid process, including November and December. FTO days not used will be paid out at the end of calendar year.
One additional FTO day will be added to all IAM-represented employees’ 2015 bank (for 2015 only).
Hour at a Time Vacation (HAT). Implementation based on technology development.
Work Rules:
10 hour shift offered to CS&S and CSA based on implementation of technology.
Part-time employees can only work as temporary full-time employees for 120 days max per calendar year. Will accrue vacation and sick as full-time employees for those months worked as a full-time employee.
Customer Contract Service Lead (CCSL) position at newly opened stations with 6 flights or less at $4.25/hr premium.
Stronger protections on supervisors doing covered work.
Unaccompanied minor/ youth supervision now covered work.
Temporary employees language eliminated.
Improvement in 10 hour rest language .
Sick Leave/Policy:
Sick bank maintained at 8 hours per month accrual.
Improvements to attendance policy for CSAs and CS&Ss (still administered outside contract).
Retirement:
Industry-leading 401K match maintained at 9.3%.
Miscellaneous:
Union time off for elected local lodge representatives.
Increase in uniform allowance.
Part-time employees will now pay 50% of the cost to cover family members with medical insurance as opposed to the current 100% of the cost.
“Me too” agreement. The IAM is leading the contract settlements at Southwest Airlines. We demanded and received written assurances (“me too”) that if the company later provided larger percentage wage rate increases, larger percentage company 401k contributions and retroactive pay for another workgroup in ground ops, our members would receive the same value on top of all the other provisions of our contract.