A federal appeals court on Friday upheld Eastern Airlines' layoff of more than 3,000 employees when the financially troubled carrier eliminated service to 14 cities to stem continuing losses. A three-judge panel of the U.S. Circuit Court of Appeals said there was insufficient evidence to support contentions of three unions that the layoffs were part of an illegal campaign to weaken the power of organized labor at Eastern. The unions ``have directed our attention to nothing that would undermine Eastern's claim that legitimate business concerns provide an ample reason for these reductions,'' the court said in an opinion by Judge Stephen Williams. The panel noted that ``there is no claim that Eastern has tailored its reductions so as to impose a differential impact on union members. Indeed, it appears that the furloughs affect union members and non-members in roughly their proportions of Eastern's workforce.'' The court also ruled that the layoffs of baggage handlers and flight attendands were not an illegal change in working conditions under the Railway Labor Act, which governs labor negotiations in the airline and railroad industries. The court found that U.S. District Judge Barrington D. Parker had ``erred in granting the injunction as the furlough was not an unlawful change in the status quo.'' Last month, Parker had enjoined the layoffs. But the appeals court had quickly dissolved the preliminary injunction, saying Eastern could proceed to lay off affected employees if it posted a $4.7 million bond while the case was appealed. In a statement from its Miami headquarters, the airline hailed the decision as ``a very significant, positive development for Eastern Airlines,'' ``Eastern believes the decision is extremely important because the court has reaffirmed management's right to operate its business in the best interests of the company, its employees, shareholders and the public,'' the company said. Union spokesmen expressed disappointment with the verdict and said no decision had been made on how to proceed. Eastern, which has lost $1 billion since 1980, announced the layoffs in July as part of a plan to eliminate unprofitable routes to 14 cities and close its Kansas City hub. Citing losses of $120 million in the first six months of this year, the company said it was restructuring its operation to concentrate service along more profitable East Coast routes. Profitable service to Latin American points would also be maintained. The International Association of Machinists and Aerospace Workers, the Transport Workers Union of America and the Air Line Pilots Association, contended that the furloughs were merely part of an anti-union campaign being waged by Eastern's parent, Texas Air Corp. The pilots union joined the legal challenge even though pilots were not being laid off as a result of the schedule changes. The airline said attrition would account for a reduction in pilot jobs. The unions argued that the layoffs were part of a plan by Texas Air, which acquired the carrier in 1986, to transfer work to its non-union subsidiary, Continental Airlines, and sell off profitable Eastern assets. Judge Stephen Williams, in the opinion joined by Judges David Sentelle and James L. Buckley, found that ``Eastern and Texas Air officials have certainly expressed at least exasperation with Eastern's unions.'' But the panel said ``the present record provides little support for any possible finding that forbidden purposes drove Eastern's decisionmaking.'' Eastern said it will save between $99 million and $199 million in annual operating losses if it cut the unprofitable service plus daily payroll savings of $160,000 from the layoffs. During the second quarter of this year, Eastern said it was losing $1 million a day. Under schedule changes implemented Aug. 31, Eastern eliminated 140 of its 1,225 daily flights and will sell between 33 and 41 airplanes. Service was eliminated to Albuquerque, N.M.,; Reno and Las Vegas, Nev.; Minneapolis-St. Paul; Oklahoma City and Tulsa, Okla.; Omaha, Neb.; Dallas and San Antonio, Texas; San Diego; Tucson, Ariz.; Fort de France, Martinique; Point-a-Pitre, Guadeloupe; and St. Lucia, West Indies. Because Parker did not have enough time to fully explore the claims of anti-labor bias, the panel said the union should be given another opportunity to document their allegations in the lower court. ``We do not view this decision as the end of the story,'' said Joseph Guerrieri, a lawyer representing the IAM. He said the union was studying whether to take the case back to Parker or seek a rehearing by the full 11-member appeals court. ``We're very disappointed in the decision,'' said Nancy Currier, vice president of the Transport Workers Local 553 in Miami, which represents about 6,700 Eastern flight attendants. ``... Our legal counsel is studying it and will advise us where we can go from here.'' ``We are committed to continuing to do whatever we can to stop the furlough and bring our people back to work. If we can't do it through the courts, we'll have to try to restore collective bargaining,'' she said. She said union leaders are preparing to begin contract talks with Eastern. Their contract becomes amendable Dec. 31.
