Delta: Aid means it can’t fire workers, but it can cut hours
Airline says it is 'in full compliance' with coronavirus relief law
Delta is defending itself against Democratic accusations that it’s violating a $2 trillion coronavirus relief law by cutting workers’ hours, saying it is “in full compliance” with the law.
Delta CEO Edward H. Bastian defended the airline in a letter to Sen. Elizabeth Warren last week, saying the company is attempting to preserve jobs after money from the law dries up at the end of September.
"Even after September, my goal is to keep furloughs to a minimum and avoid them entirely if possible," Bastian wrote in the May 29 letter. "To achieve this goal, we are working across all divisions of the company to spread the reduced work available among as many people as possible, thereby protecting jobs."
The company has been criticized for cutting hours after receiving $5.4 billion in assistance from the law, out of $25 billion given to airlines, to keep carriers from laying off workers because of the coronavirus pandemic.
Delta argues that cutting hours is different from cutting pay, but Democrats aren’t buying it: On May 20, Warren, D-Mass., and 12 other Democratic senators argued in a letter to Bastian that the two actions are equivalent.
"Congress included this provision to prevent airline employees from suffering a reduction in pay or benefits after airline companies received billions of dollars in taxpayer bailouts — funding which was calculated based on your payroll. But a reduction in pay, via a forced reduction in hours, is exactly what you have imposed," they wrote.
Bastian said though the payroll support was welcome, "those funds alone are not nearly enough to sustain our business through the pandemic."
He said the airline’s passenger volume dropped as much as 95 percent by the end of March, costing the company $90 million a day that month.
[Airline leaders grilled over safety, refunds and use of loans]
The company has reduced its flight schedule by more than 70 percent and parked more than 600 aircraft.
Delta, United and JetBlue were among those to announce forced hour reductions in the aftermath of accepting agreements on payroll protection grants. But United later backed off after the International Association of Machinists and Aerospace Workers, which represents the fleet service and passenger service workers, filed a lawsuit in federal court in New York on Tuesday to try to stop the airline from imposing mandatory cuts.
United has warned, however, of potential cuts in October, after the grant money dries up.
JetBlue, meanwhile, has asked those in salaried and administrative positions to take 24 days of unpaid time off through Sept. 30. That program does not apply to frontline crew members such as flight attendants and ground crew, which are paid what they were earning before the pandemic and are keeping their full benefits.
Democrats in the Senate and the House have also sent separate letters asking Treasury Secretary Steven Mnuchin to provide guidance to airlines that the law requires them to keep their employees on the payrolls.
In a May 26 letter to Treasury Secretary Steven Mnuchin, a group of Democratic House members led by Reps. Jan Schakowsky and Jesús Chuy Garcia of Illinois and Katie Porter of California signed by 75 lawmakers asked why airlines were permitted to cut workers’ hours after receiving those dollars.
"The creative position held by these airlines is that an hours cut is somehow unrelated to compensation, which is protected under the" March aid package, they wrote. "The hour cuts imposed by these carriers have made some workers eligible for unemployment assistance — a circumstance the legislation was explicitly designed to prevent."
"Permitting this type of interpretive acrobatics will erode public trust in our federal relief efforts and further subject taxpayer dollars to suspicion that relief funds were used to pad the pockets of shareholders at workers’ and taxpayers’ expense," the letter continues.
Sens. Maria Cantwell, D-Wash., the ranking member of the Commerce, Science and Transportation Committee; Sherrod Brown, D-Ohio, ranking on Banking, Housing and Urban Affairs; and Minority Leader Charles E. Schumer, D-N.Y., have also written Mnuchin to urge him to warn airlines about making such cuts.
Sara Nelson, international president of the Association of Flight Attendants-CWA, AFL-CIO, said airlines like United have warned about what will happen after Sept. 30. The airline, she said, “is just being transparent with workers about what they are facing in the fall.” American has sent similar missives, she said.
But Nelson criticized Delta as a “bad actor,” saying it has violated the intent of the law.
“Delta is cheating,” she said. “They are cutting back people’s hours.”
She said cutting those hours means some have had to seek unemployment.
The airlines “agreed not to touch labor costs, not to to change jobs, not to cut pay rates,” she said. “The other airlines are doing the right thing.”
Delta, she said, “is not.”