On the same day United Airlines announced a cut to 15,000 employees’ hours, U.S. Senator Josh Hawley (R-Mo.) sent a letter to United Airlines CEO Oscar Munoz demanding the company reverse the decision or return the generous taxpayer-funded bailout it received from the CARES Act. United’s announcement to employees comes just over a month after they assured employees that they “will not conduct involuntary furloughs or pay cuts in the U.S. before September 30th."
In the letter, Senator Hawley writes, “During such a severe economic crisis, it is critical that our own corporations act as responsible stewards over their respective workforces. Decisions by major employers like United Airlines can reverberate widely across the labor market, affecting communities and working families alike. The taxpayers of this country have offered a generous bailout to your company and you should, in turn, honor this trust by keeping the promises you made to those you employ."
Senator Hawley’s letter comes after hearing from multiple airline employees about their hours being cut on his flight from Missouri back to Washington.
The letter is available here and below.
May 1, 2020
Mr. Oscar Munoz
Chief Executive Officer
United Airlines, Inc.
PO Box 06649
Chicago, IL 60606-0649
Dear Mr. Munoz:
It has come to my attention that United Airlines will be cutting pay for some workers this month. Recently at an airport, I was approached by several of your employees who shared this news directly with me. During such a severe economic crisis, actions like these by large corporations who have themselves received billions in taxpayer dollars are outrageous. I urge you to reverse this decision immediately. You must keep your promises to your workers or give the money back.
While I appreciate the extraordinary circumstances under which the airline industry must now operate, it is also true that Congress made a special dispensation for the airlines under the recently-passed CARES Act. The airlines were effectively alone in receiving an industry-specific bailout to help maintain operations. This was done in part through the Payroll Support Program, a scheme in which the federal government would directly finance airline payroll through grants. United Airlines recently struck an agreement with the Department of the Treasury for a $5 billion payout, $3.5 billion of which would not need to be returned to taxpayers. Congress provided even more support for airlines like yours in the form of direct financing and loans.
Under the Payroll Support Program, Congress specifically forbade recipients of this taxpayer money from reducing the rate of pay or benefits for workers. Yet, United Airlines recently announced that working hours would be reduced by 25% for approximately 15,000 workers, effectively forcing a layoff to part-time status. It was not the intention of Congress that recipients of this taxpayer money would then turn around and disguise pay reductions by cutting hours.
This is not to mention your own promise to your employees. When the CARES Act passed, you announced that “United will not conduct involuntary furloughs or pay cuts in the U.S. before September 30th.” Anyone who has spent time on hourly payroll knows that a steep reduction in working hours results in a sharp pay cut, which immediately impacts any benefits that are tied to hours worked. There is no other way to spin it.
During such a severe economic crisis, it is critical that our own corporations act as responsible stewards over their respective workforces. Decisions by major employers like United Airlines can reverberate widely across the labor market, affecting communities and working families alike. The taxpayers of this country have offered a generous bailout to your company and you should, in turn, honor this trust by keeping the promises you made to those you employ.
I look forward to your announcement that you will fully reverse the decision you communicated to workers today, and restore full working hours to all employees who have been affected. Thank you for your attention to this urgent matter.