American Airlines 2004 Annual Report Download - page 19

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16
On July 12, 2004, a consolidated class action complaint, that was subsequently amended on November 30, 2004,
was filed against American Airlines, Inc. and the Association of Professional Flight Attendants (APFA), the Union
which represents the Company’s flight attendants (Ann M. Marcoux, et al., v. American Airlines Inc., et al. in the
United States District Court for the Eastern District of New York). While a class has not yet been certified, the
lawsuit seeks on behalf of all of American’s flight attendants or various subclasses to set aside, and to obtain
damages allegedly resulting from, the April 2003 Collective Bargaining Agreement referred to as the Restructuring
Participation Agreement (RPA). The RPA was one of three labor agreements the Company successfully reached
with its unions in order to avoid filing for bankruptcy in 2003. In a related case (Sherry Cooper, et al. v. TWA
Airlines, LLC, et al., also in the United States District Court for the Eastern District of New York), the court denied a
preliminary injunction against implementation of the RPA on June 30, 2003. The Marcoux suit alleges various
claims against the Union and American relating to the RPA and the ratification vote on the RPA by individual Union
members, including: violation of the Labor Management Reporting and Disclosure Act (LMRDA) and the APFA’s
Constitution and By-laws, violation by the Union of its duty of fair representation to its members, violation by the
Company of provisions of the Railway Labor Act through improper coercion of flight attendants into voting or
changing their vote for ratification, and violations of the Racketeer Influenced and Corrupt Organizations Act of
1970 (RICO). Although the Company believes the case against it is without merit and both the Company and the
Union are vigorously defending the lawsuit, a final adverse court decision invalidating the RPA and awarding
substantial money damages would have an adverse impact on the Company.