Southwest workers group seeks mediation for stalled contract talks

© Reuters. A Southwest airplane sits on the tarmac in Austin

By Tracy Rucinski

CHICAGO (Reuters) - The union representing Southwest Airlines (NYSE:LUV) Co's passenger service and reservation employees said on Friday it was seeking federal mediation to help contract negotiations after two years of talks.

Budget-friendly Southwest spent seven years in contract negotiations with a separate union that represents its mechanics before reaching an agreement last year.

Now, the International Association of Machinists and Aerospace Workers (IAM), representing 7,852 Southwest workers, has invoked its right to mediation with the National Mediation Board.

"While many contract issues remain unresolved, the one issue that has completely derailed negotiations is Southwest's treatment of its employees," IAM said in a statement, citing demands that employees return to work after their shift has ended, forcing overtime.

Instead, IAM said the airline should properly staff its operation.

In an emailed statement, Southwest's labor relations vice president, Russell McCrady, called the union's mediation filing "the next logical step to promptly find solutions to a few remaining items."

Under the current contract, Southwest can call for mandatory overtime when necessary, a standard practice in the airline industry, McCrady said, but added that currently mandatory overtime "accounts for a historically-low one percent of total hours worked by this group."

He said the company has proposed changes during negotiations that would further reduce that percentage and protect employees' days off.

Under the Railway Labor Act, the law governing labor relations in the airline industry, a company or union must seek federal mediation for help in resolving negotiations before taking other action.

Analysts have highlighted labor issues as a major concern for airlines this year, in addition to rising fuel costs and the grounding of Boeing (NYSE:BA) Co's 737 MAX jets after two fatal crashes.

American Airlines (NASDAQ:AAL) Group Inc reached a tentative joint collective bargaining agreement with its mechanics last month after years of bitter negotiations and is in talks with its pilots and flight attendants.

Early contract talks between Southwest and its pilots union are due to begin the first week of March, a spokesman for the union said.

Southwest's negotiations with its mechanics union, the Aircraft Mechanics Fraternal Association, were fraught with flight disruptions and legal disputes. Although a contract was reached, litigation is still ongoing.

On Thursday the mechanics union said it was "sadly not surprised" by a federal watchdog report this week that faulted Southwest and the U.S. Federal Aviation Administration on safety, prompting some lawmakers to call for improvements.

Southwest has disputed the findings.