Saturday, October 1, 2011

Lawyer issues?

DCA Domicile Update

Fellow DCA pilots,

Vendor Issues:

The balance of this update is an explanation of some of the internal issues the Board and Officers are dealing with related to legal representation and financial responsibilities. It is long and perhaps boring but we want you to know our opinion on the events.

If you recall, there was a Special BPR meeting in August, to address legal concerns that we had been made aware of. Without breaching confidentiality, these concerns arose from a serious conflict of interest allegation and issues related to separate lawsuits being filed by two separate law firms with only minimal discussion between those firms. We learned that Lee Seham, who has been representing USAPA since before we even won certification as a union, and who has served as, and we still believed was our General Counsel, was no longer being asked for his opinions on lawsuits that your union was filing. We saw what we believed to be definitive concerns shaping up and we wanted to get both sides of the stories to clear the air, and determine where we were heading, and with which legal team at the helm. This discussion took a full day and on into the next morning, at our meeting in Charlotte, but we strongly believe that it was necessary for the Board, Officers and our attorneys to sit down and address these issues. The issue of how to pay for dramatically increasing legal expenses was carried forward to September and we still have no explanation of how the growing legal bills can all be paid.

One of the major concerns to come out of this meeting by the President was of the billing practices of Seham and Associates. As a result of these concerns, the President informed the Board that there would be a financial audit of all legal firms, including the Seham firm's billing. We supported reviewing billing from all legal firms representing our interests if there was to be an audit. We also questioned the sudden motivation for these actions and additional expenses.

On September 20th, the BPR held a Special Meeting Conference Call, called by the President to debate this issue and authorize a resolution directing an audit. Although the Union Operating Manual (UOM) specifies interviews should be conducted, only one auditing firm, Holtz, Rubenstein and Reminick, was made available to take questions from the Board, as well as another attorney, Sarah McShea, who would be working with, and overseeing the auditing firm, and addressing any potential issues of legal malfeasance or breaches of ethics.

Since Joe was flying during this Special Meeting, he gave his DDR (Duly Designated Representative) authority to fellow DCA based pilot, and one of USAPA's founders, Steve Bradford, to represent your interests during this call. It was the position of both Steve Bradford and Pete that we take some time and due diligence in the consideration of hiring this auditing firm and another attorney, considering our good history with the Seham firm, and our potential concern that the issue is driven by personality conflicts. However, the majority of the Board did not see it this way and a resolution was passed authorizing that the audit take place, and by the two mentioned firms. We disagreed with the process, as well as, that no specific determination had been made as to how these additional expenses would be budgeted and paid for, as required by the UOM. However, we understood that our opinions were not shared by the majority of the Board, which included the representatives from Phoenix.

We believe that the next step should have been for retainer agreements to be negotiated between the parties, reviewed by legal, and then presented to the Board for approval. As with any negotiating process, there is usually some give and take from both parties, and it may take several weeks to get everything finalized. Since we have our annual Fall meeting scheduled for the first week in October we were both surprised to hear that another Special Meeting was called by the President for Tuesday, September 27th (just one week away from our scheduled meeting) to address the approval of these agreements. We also questioned the wisdom of having one of our other new attorneys, Pat Syzmanski (working with the O'Dwyer firm), being fully involved in the negotiating process of an auditing firm and another oversight attorney, who would be involved in auditing his bills as well. Of note is his billing rate of $400 per hour while we have our own attorney Laura Backus, on retainer who is familiar with all of our contracts and agreements, as well as the Executive Vice President, who normally negotiates these agreements on our behalf, working in concert with Laura. This is work being paid for twice and in our opinion a complete waste of your dues dollars.

Money issues continue to cloud all of this. Expenses by our "old" law firm include hotel rooms at about $50 a night. The new firm submits bills for about $350 a night. The "old" firm bills around $250 an hour. The new firm and the firm to audit the auditors, bills at $400 and $450 an hour. We are seriously concerned that our union's spending is spinning out of control.

We were also made aware over the last several days that all parties appeared to be rushing the negotiating process back and forth, with disagreements and concerns from our Executive Vice-President and Secretary-Treasurer about how this process was taking place. The agreements, as presented, appear to us to have no real cost control method, unlimited expenses exposure, unsatisfactory progress reporting requirements, and are too vague in directing how work will be done. The two of us, along with some other board members, questioned why there was such a rush to simply approve these retainer agreements which could easily be handled the following week. This is an issue which was not going to get us a contract, merge with another airline, settle the seniority dispute, get us any closer to an LOA 93 decision, or anything else of significant importance by the weekend. This was just to approve two retainer agreements for an audit that had already been approved by the Board. The auditing firm had already informed us last week that we could not expect any preliminary results for at least several weeks, so it was not going to even allow us the opportunity to receive a progress report by next week's meeting.

Late on the night before this second Special BPR Meeting was to take place, we realized that in everyone's haste to get this meeting accomplished, a minor yet required, provision of the UOM had been overlooked. None of the Board members or Officers had received the required telephonic call-in information at least 24 hours prior to the call. The UOM has specific requirements which must be met to keep an orderly process of governing the union. The following insert has been pulled from our UOM:

III. Electronic Meetings

A. Scheduling, Notification and Procedures

1. Electronic or telephone meetings will be called as required by USAPA's President or by at least one-third (1/3) of the Board of Pilot Representatives.

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2. Notice of an electronic meeting will be emailed to the participants at least 72 hours prior to the meeting. This notice shall consist of a maximum of two (2) agenda items, and a list of participants.

3. Call in phone number and passwords will be emailed to participants at least 24 hours prior to the meeting.

4. In addition to required e-mailed notification, a telephone contact (leaving message if necessary) from USAPA President or his designee should be made to each Board member within 12 hours of e-mail notification.

5. USAPA will advise Pilots of date, time, and agenda for any Electronic meetings immediately following notification of the BPR. Each participant will have the capability of two-way communication during the entire meeting.

6. A quorum is required.

We discussed this oversight and questioned the validity of any business conducted during a telephonic conference call which had not complied with the requirements of the UOM. Pete then brought this to the attention of the entire Board and all of the Officers via an e-mail on Monday night. On Tuesday morning, the only reply was a distribution of the required call in information at 0840 for a call to take place 5 hours and 20 minutes later. Shortly thereafter, Pete sent the following e-mail to the President and Secretary, and copied in the Board and other Officers:

"President Cleary and Secretary Streble,

I cannot, in good faith, and will not, be a party to a BPR telephonic conference call which is in clear and blatant violation of the USAPA UOM. Subpart 3, as once again inserted below, specifically states that "Call in phone number and passwords will be e-mailed to participants at least 24 hours prior to the meeting." My receipt of this information at 0840 this morning with the notification of the call taking place this afternoon at 1400, is in violation of this protocol. Therefore, my assertion is that any business which were to take place during the call, (even the waiving of this provision on a non-precedent setting basis) would be rendered invalid, as the Board was not properly called into session as required by our UOM. The Constitution and By-Laws, and the UOM of this organization, were written to provide our leadership with specific guidelines to be adhered to at all times, not just when it would be convenient to do so. Please advise me of any plans to reschedule this meeting in full compliance and accordance with all provisions of the UOM.

Respectfully,

Pete Dugstad"

Joe followed suit in agreement, as well as four other Board members, including the Phoenix representatives, who the week before had voted contrary to us in agreeing to the passage of the resolution approving the audit.

Six of your eleven Board members believed that in the haste to secure a conference call to approve these agreements, a required legal provision of our UOM had been overlooked and therefore felt strongly enough that we refused to be a part of this call. All board members and officers were notified of the legal concerns that business could not be conducted on the conference call. The president held the meeting anyway rather than rescheduling it. Due to six representatives not participating in the call, a quorum was not present ensuring no action could be attempted. A majority of your Board believed that the rush to approve these agreements was not worth circumventing a required provision of one of our two governing manuals and effectively making any business conducted during the meeting, not legal and binding. It should be noted that we were informed by the Secretary-Treasurer, that the final retainers were distributed to the Board just two hours before the meeting was to take place, and other errors were still found, and work was being done to rectify these new found concerns just 15 minutes prior to the beginning of the call.

We accept the majority opinion of the Board to conduct an audit of all of our legal billing. However, we refuse to be pressured into accepting a potentially inferior product in a short timeline which may cost all of us more money when there is no clear reason to do so. Should we spend tens of thousands of dollars to find hundreds? Should we have limits on expenses the auditors can submit? How many law firms do you, the pilots want working for USAPA? Please know and understand that we are only trying to protect all of our best interests as well as the interests of our union.

We thank you for your time in reading this lengthy update and we hope that you understand our desire to set the record straight. We thank you for your support, and stand ready to explain our decisions to those of you who may have questions. We look forward to hearing from you and hopefully seeing you at our meeting on Friday the 30th at 1100.

Fraternally,
DCA Chairman