In the Matter of the

Application of the

Office and Professional Employees International Union

alleging a representation dispute pursuant to Section 2, Ninth, of the Railway Labor Act, as amended

involving employees of

OFFSHORE LOGISTICS, INC.

27 NMB No. 33

CASE NOS. R-6715

and R-6730

FINDINGS UPON

INVESTIGATION–

ORDER

January 20, 2000

On November 15, 1999, the Office and Professional Employees International Union (OPEIU or Organization), filed an application with the National Mediation Board (Board) pursuant to 45 U.S.C. § 152, Ninth, alleging a representation dispute among Mechanics and Related Employees. The application states that they are employees of Offshore Logistics, Inc. (Offshore). Offshore contends that it is not a carrier under the Act but is a holding company for two separate subsidiaries, carriers under the Act, Air Logistics, L.L.C. (AirLog) and Air Logistics of Alaska, Inc. (Air Logistics Alaska).

The Board assigned Benetta M. Mansfield as the Investigator.

For the reasons described below, the Board finds that Offshore is not a carrier under the Act, and that AirLog and Air Logistics Alaska are separate carriers under the Act. Therefore, the Board administratively amends the application filed by OPEIU into two separate applications to allege representation disputes among the Mechanics and Related Employees of AirLog (NMB Case No. R-6715) and of Air Logistics Alaska (NMB Case No. R- 6730).

PROCEDURAL BACKGROUND

OPEIU filed the application on November 15, 1999. On November 30, 1999, Offshore filed a position with the Board stating that it objected to the application because Offshore does not employ or manage the terms and conditions of the Mechanics and Related Employees in the application.

On December 2, 1999, Investigator Mansfield asked for a response from OPEIU. On December 10, 1999, OPEIU responded stating that the Board should dismiss Offshore's objection and proceed with the application. Offshore replied to this position on December 23, 1999. On January 3, 2000, the Investigator requested additional documents and information from Offshore. Offshore supplied this information on January 7, 2000.

ISSUE

Is Offshore a carrier under the Railway Labor Act (RLA or Act)? If not, should the application be amended to reflect the proper carrier(s)?

CONTENTIONS

Offshore

Offshore contends that it does not employ any persons in the Mechanics and Related Employees craft or class described in the Application. Offshore states that, since December 31, 1997, it has been a holding company. At that time, it formed two separate subsidiaries – AirLog and Air Logistics Alaska – which are carriers under the Act. It asserts that each carrier employs a separate group of Pilots, Mechanics and other persons integral to the respective carrier's separate operations. In support of this position, Offshore states that OPEIU recognized the separation of these entities when it withdrew an application for representation of the employees at Offshore in NMB File No. CR-6623 in 1998. It also cites language in a current letter of agreement with OPEIU which states:

It is agreed and understood by the Union that Air Logistics of Alaska, Inc. operation is unique and different from Air Logistics L.L.C. Gulf of Mexico operation, and that terms and conditions negotiated by OPEIU on behalf of Pilots operating in the Gulf of Mexico do not have the same applicability to the Alaska operation.

Offshore states that AirLog operates a year-round helicopter service principally to offshore oil operations in the Gulf of Mexico (focusing almost exclusively on service between land and offshore structures). In contrast, Offshore contends that Air Logistics Alaska operates service between predominantly land-based locations, focusing on transportation to pipeline locations, supporting geological surveys, and performing wildlife census work. The Mechanics, it contends, are separately employed and there is no transfer policy or rights between the employers. Offshore states that "[a]ny mechanic that moves from one carrier to the other is required to undergo the entire training program at the new carrier." Offshore further states that these carriers have separate Part 135 FAA operating certificates; separate aircraft maintenance programs; separate mechanic training programs; separate hiring needs; separate pay scales; separate pay checks; different uniforms; and separate insurance benefits.

Offshore asks the Board to dismiss the application.

OPEIU

Citing Offshore Logistics, Inc., 24 NMB 624 (1997), OPEIU maintains that Offshore is the Carrier. It contends that, during the 1998 negotiations for a collective bargaining agreement covering Flight Deck Crew Members, Offshore insisted that AirLog would be the signatory and that the Flight Deck Crew Members working in Alaska would be excluded from the agreement. After an exchange of documents and information, Offshore entered into a contract with OPEIU on behalf of the Flight Deck Crew Members "ostensibly employed by Air Log" and a letter of agreement concerning the Flight Deck Crew Members employed in Alaska. OPEIU states that the letter of agreement cited by Offshore "reflect[s] OPEIU's insistence that [Offshore] be signatory to both documents."

OPEIU further disputes Offshore's assertion that it ever admitted that Offshore was not a carrier. The Organization states that there was neither an OPEIU assertion nor a Board finding to this effect.

OPEIU argues that Offshore's objection elevates form over substance. It contends that Offshore dominates both AirLog and Air Logistics Alaska as demonstrated through its Securities and Exchange Commission (SEC) filings and other public records. OPEIU also contends that AirLog has been wholly-owned by Offshore since its formation in 1997. The officers of Offshore, AirLog, and Air Logistics Alaska share responsibilities and control demonstrating that Offshore officers control AirLog and Air Logistics of Alaska. OPEIU also notes that on January 27, 1998, Offshore completed the sale of Senior Notes due in 2008 with "net proceeds to the Company [of] $97.2 million." AirLog and Air Logistics Alaska are guarantors of these Notes.

Finally, OPEIU states that the employees of both subsidiaries are similarly treated with the same retirement and savings plan, and some of the same fringe benefits.

OPEIU urges the Board to look at these operations from a managerial and labor relations perspective, by "pierc[ing] the corporate veil for purposes of rational labor-management relations," citing Flagship Airlines, Inc., 22 NMB 331, 422 (1995).

FINDINGS OF LAW

Determination of the issues in this case is governed by the Railway Labor Act (RLA or Act), as amended, 45 U.S.C. §§ 151- 188. Accordingly, the Board finds as follows:

I.

Section 181 of the RLA extends coverage to "every common carrier by air engaged in interstate or foreign commerce . . . and every air pilot or other person who performs any work as an employee or subordinate official of such carrier or carriers, subject to its or their continuing authority to supervise and direct the manner of rendition of his service."

II.

The OPEIU is a labor organization and/or representative as provided by 45 U.S.C. § 152, Ninth.

III.

45 U.S.C. § 152, Fourth, gives employees subject to its provisions "the right to organize and bargain collectively through representatives of their own choosing. The majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class for purposes of this chapter."

IV.

45 U.S.C. § 152, Ninth, provides that the Board has the duty to investigate representation disputes and shall designate who may participate as eligible voters in the event an election is required.

FINDINGS OF FACT

I.

On August 8, 1997, the Board certified the OPEIU to represent the craft or class of Flight Deck Crew Members at Offshore. See Offshore Logistics, supra. On December 31, 1997, Offshore formed two separate subsidiaries – AirLog and Air Logistics Alaska. These subsidiaries are wholly-owned by Offshore (as are other subsidiaries not involved in this case).

In April 1998, OPEIU and Offshore began collective bargaining negotiations for a contract covering the Flight Deck Crew Members. Offshore took the position that, due to the December 31, 1999, corporate restructuring, AirLog would be the signatory to any contract and that the Flight Deck Crew Members working for Air Logistics Alaska should be excluded from contract coverage. The parties exchanged a substantial amount of information. Ultimately, in May 1999, Offshore entered into an agreement covering the AirLog Flight Deck Crew Members and a separate letter of agreement covering the Air Logistics Alaska Flight Deck Crew Members.

The letter of agreement between OPEIU and Offshore concerning the Pilots at Air Logistics Alaska states:

CONTRACT TERMS APPLICABLE TO PILOTS OF AIR LOGISTICS OF ALASKA, INC.

It is agreed and understood by the Union that the Air Logistics of Alaska, Inc. operation is unique and different from the Air Logistics L.L.C. Gulf of Mexico operation, and that terms and conditions of employment negotiated by OPEIU on behalf of Pilots operating in the Gulf of Mexico do not have the same applicability to the Alaskan operation. . . .

Several provisions in the letter apply solely to Air Logistics Alaska. For example, Section 4 under Representation reads "Terms and conditions of Air Logistics of Alaska, Inc. employment may differ from those found in the basic contract between the Company and the Union as a result of the operational needs of Air Logistics of Alaska, Inc." The section on "Seniority Roster" states: "Applicable only to Gulf Coast operation. Air Logistics of Alaska, Inc. will continue with existing policies. . . ." The letter of agreement does not permit Pilots in the Gulf of Mexico or Alaska to displace Pilots in the other operations. Numerous provisions of the contract are applicable only to the Gulf Coast operation and state "Air Logistics of Alaska, Inc. will continue existing policies."

II.

On January 8, 1998, OPEIU filed an application with the Board to represent the craft or class of A&P Mechanics & Ground Support Personnel at Offshore. Offshore opposed the application contending, in part, that the Organization had misidentified the carrier. As in the instant matter, Offshore argued that "OLOG is the non-carrier parent holding company and its subsidiary, Air Logistics, L.L.C., is now the air carrier operating entity." Immediately after receipt of that position statement, Board Mediator Jack Kane sent a letter to the participants stating "please note for your records that the Carrier's official name is 'Air Logistics, LLC.'" The application was subsequently withdrawn. There was no finding by the Board or admission by the Organization that Offshore was not a carrier.

III.

Offshore does not employ any Mechanics and Related Employees. The only employees working directly for Offshore are officers, administrative, and clerical employees. The Chief Executive Officer of AirLog is Neill Osborne, who is Vice President, Air Logistics, L.L.C., for Offshore. The other officers of AirLog listed on the organizational chart do not appear on the Offshore organizational chart.

The President of Air Logistics Alaska is George Small who is also President of Offshore. The Secretary/Treasurer is Dru Milke who is also Vice President International of Offshore. Air Logistic Alaska's Vice President, Director of Operations, and General Manager is L.M. Rizk, who does not appear on the Offshore organizational chart.

IV.

Upon request, Offshore provided the "Administrative Procedures Manual" for AirLog and the "Company Policy Manual" for Air Logistics Alaska. The manual for AirLog is far more extensive. A comparison of the manuals demonstrates significant differences in the terms and condition of employment at the two operations, including different benefits (with the exception of the retirement and savings plan), different pay rates, and different rules.

The two operations also have separate employment applications, pay checks, brochures, and press releases. They have separate labor and employment management.

An examination of the job descriptions for Mechanics and Related Employees indicates different job functions and requirements at the two operations.

V.

Offshore files a single 10-K report with the SEC for Offshore and its "majority-owned entities and non-majority owned entities." * Offshore also files consolidated financial statements.

The record contains evidence that AirLog and Air Logistics Alaska are guarantors of substantial debt of Offshore.

DISCUSSION

I.

The Railway Labor Act at 45 U.S.C. § 181 extends coverage to air carriers and "every air pilot or other person who performs any work as an employee or subordinate official of such carrier or carriers . . . ."

The Board has not had the opportunity to determine the carrier status of Offshore after the corporate restructuring. The certification of the Flight Deck Crew Members in Offshore Logistics, supra, occurred before the December 1997 restructuring. Indeed, in Offshore Logistics, Aviation Services Division d/b/a Air Logistics, 11 NMB 144 (1984), the Organization argued that the Pilots working in Alaska worked for Air Logistics of Alaska and should not be included in the craft or class. The Carrier argued, at that time, that its Alaska operations were fully integrated with its Louisiana operations including aspects of employment and management. The Board ruled as follows:

Air Logistics of Alaska, Inc. was established merely to comply with Alaskan law. Except for the presence of the corporate name and a separate FAA certificate for Air Logistics of Alaska, Inc., the Alaskan bases . . . and Louisiana are operated as a single system for purposes of the [RLA].

Id. at 152.

II.

In fulfilling its responsibilities under Section 2, Ninth, the Board may pierce the corporate veil for the purpose of rational labor-management relations. See Flagship Airlines, supra; Midway Airlines, Inc., 14 NMB 447 (1987).

In determining whether Offshore remains a carrier under the Act, the Board looks to see whether Offshore and its subsidiaries operate as a single transportation system, and will not "exalt form over substance." Republic Airlines, Inc., 8 NMB 49 (1980).

As the Board has stated, in making such a determination, it evaluates the following factors: advertisement of services; reservations systems; signs, logos, or other indicia; personnel with public contact held out as employees of the carrier; labor relations and personnel functions; common management, corporate officers, and interlocking Board of Directors; combined workforce; and whether separate identities are maintained for corporate purposes alone. See Flagship Airlines, supra.

III.

Here, the evidence is that Offshore is no longer a carrier under the Act. Offshore has no employees in the traditional carrier crafts or classes. It does not appear to be involved in the operations or day-to-day management of AirLog or Air Logistics Alaska.

These companies hold themselves out through advertisement and customer relations to be separate operations from Offshore. They have separate employment applications and separate employment policies. They also have labor relations functions which are separate from Offshore.

The Board also finds that the language in the letter of agreement between the Organization and Offshore acknowledges the separateness of AirLog and Air Logistics Alaska.

While the Board notes there is some overlap in corporate officials, the degree of overlap evidenced here is not unusual in parent and subsidiary corporations. Although the Organization is troubled by the debt-laden subsidiaries, the Board cannot use this information to determine whether Offshore remains a carrier. Offshore subsidiaries AirLog and Air Logistics Alaska are carriers under the Act.

CONCLUSION AND ORDER

Based upon the facts presented, the Board concludes that Offshore is no longer a carrier under the Act, but that Air Logistics, L.L.C., and Air Logistics of Alaska are carriers under the Act.

The Board, therefore, orders that the OPEIU's application be administratively amended into two applications: Case No. R- 6715, alleging a representation dispute among Mechanics and Related Employees of Air Logistics, L.L.C., and Case No. R-6730, alleging a representation dispute among Mechanics and Related Employees of Air Logistics of Alaska, Inc. These Carriers are directed to deliver to the Board's Representation and Legal Department by 10 a.m., EST on Monday, January 24, 2000, three copies of each alphabetized list of potential eligible voters in Case No. R-6715 and Case No. R-6730. The lists must include employee identification number or social security number, as well as job titles and duty stations, for each employee. The lists of potential eligible voters must contain all individuals with an employee-employer relationship as of the last day of the last payroll period prior to November 15, 1999. The lists must be alphabetized on a system-wide basis. Copies of the lists must be provided to all participants.

The Carriers must inform the Investigator of the date of the last day of its last payroll period prior to November 15, 1999. The Carriers must also state the total number of employees covered by this application.

The Carriers must also provide signature samples for the eligible voters solely to the Investigator by January 24, 2000. These alphabetized signature samples must be in the same order as the names on the list of eligible voters. Until an applicable list and the signature samples are received by the Investigator in compliance with the above requirements, the Investigator will continue to accept additional authorization cards.

By direction of the NATIONAL MEDIATION BOARD.

Stephen E. Crable

Chief of Staff

cc:	Joseph Z. Fleming, Esq.

Marc J. Esposito, Esq.

Melvin S. Schwarzwald, Esq.

Timothy Gallagher, Esq.

Mr. Paul Bohelski