Union leaders for flight attendants and ground crew at Southwest Airlines refused to meet with an activist investor after the company asked them to sign a nondisclosure agreement.
According to an Instagram post by Transport Workers Union 556, the union that represents Southwest’s nearly 20,000 flight attendants, the union and others were contacted about a meeting regarding Elliott Investment Management but were asked to sign a nondisclosure agreement that “contains terms and conditions that severely limit (the union’s) ability to maintain open and transparent communication with members.”
Elliott, who disclosed Monday that he owns a 9.7% stake in the company, has been aggressively buying common stock to push for change at the airline. Elliott has already met with union leaders representing Southwest’s flight attendants and pilots and is a longtime member of the union for 17,000 ramp, operations, supply and cargo agents.
Bill Bernal, president of TWU Local 556, said the flight attendants’ union was contacted by Southwest about a month ago to meet about the Elliott matter. Other unions, including TWU Local 555, which represents ground crew, and TWU Local 550, which represents dispatchers and meteorologists, were also invited, he said.
“We decided as a group,” said Bernal The Dallas Morning News Monday.
Bernal confirmed that TWU Local 556 met with Elliott but was never asked for a non-disclosure agreement from the hedge fund. The Southwest Airlines Pilots Association also met with Elliott, according to a recent union memo, and was told at a meeting with the hedge fund that Elliott intended to “leave the airline in better shape than he found it.”
“We maintain an open dialogue with all of our union partners,” a Southwest Airlines spokesperson said in an email. “While we do not normally require a confidentiality agreement, given the issues we plan to discuss with our unions at these special meetings, it was necessary to enter into a confidentiality agreement.”
TWU Local 555 posted a memo to members on Facebook and also announced that it was rejecting the meeting due to the conditions.
“We know you all have many questions about what is happening, and we are ready and willing to meet with the company without any specific conditions,” Abilio Villaverde, president of TWU Local 555, wrote in the memo.
Andre Sutton, director of the Transport Workers Union’s aviation division, added that the “contracts protect the members (of the union), not the board”.
“A change in the board or corporate leadership will not impact the contractual rights of our members,” Sutton said. “The TWU has ratified industry-leading agreements for all of our members at Southwest, and those contracts will remain in effect no matter what happens with Elliott. Local TWU leaders have always been willing to meet with Southwest leadership, but not if they insist on a non-disclosure agreement that prevents them from being transparent in communications with their members who elected them.”
Elliott previously announced its intention to call a special meeting of shareholders and elect 10 new board members. Southwest and Elliott will meet on September 9. Southwest’s investor day is scheduled for September 26.
