Summary
- SW Airlines cancels NDA with TWU, allows for open communication.
- Union refused NDA, demanding transparent dialogue could hold the meeting.
- Elliott Investment Management has near 10% stake aims to change carrier.
Southwest Airlines
, the world’s largest low-cost carrier, is rescinding a non-disclosure agreement that previously asked union leaders to meet regarding Elliot Investment Management. The Dallas-based carrier had asked TWU Local 556, the union representing Southwest Flight attendants, to sign a non-disclosure agreement, but it refused.
The investment company recently sent a letter to the Dallas-based airline, criticizing its leadership, including CEO Bob Jordan and Chairman Gary Kelly. Since purchasing shares in Southwest, Elliott has claimed it can improve the carrier’s culture and financial performance.
Limiting open and transparent communication
Bill Bernal, the president of Transport Workers Union 556 (TWU), published a statement stating that the union was contacted to meet regarding Elliot, an activist hedge fund. However, Southwest asked the Union to sign the NDA, which required “terms and conditions severely limiting [the union’s] ability to maintain an open and transparent communication.”
Bernal mentioned that the union is “ready and willing to meet” with Southwest leaders and acknowledged that “any future discussions allow for the open dialogue” that the inflight workers deserve.
Now meeting without any restrictions imposed
However, following the request, Bernal was pleased to share that through negotiation, the Union can not meet without any restrictions previously imposed; Bernal shared this in a memo on the Union Instagram page:
“I am pleased to share that the company has shown some flexibility and is now willing to accommodate our concerns regarding communication with the membership,” Bernal said in the memo. “They have agreed to meet without many of the restrictions previously imposed. As a result, the meeting will happen soon, and I plan to provide everyone with an update afterward.”
Almost 10% ownership in the carrier
Elliot’s stake in the low-cost carrier is 9.7%, just shy of the 10% required to host a shareholder meeting. The activist hedge fund has been aggressively buying shares in Southwest to enact change at the carrier. However, Elliot has already met with many union leaders representing the airline’s pilots, flight attendants, ramp, operations, provisioning, and freight agents. Elliot has previously disclosed its aspirations to call a special shareholder meeting to elect ten new board members.
Photo: Southwest Airlines
Founded by Paul Singer in 1977, Elliot Investment Management is headquartered in West Palm Beach, Florida, an American Investment Management firm and one of the largest activist funds in the world. The firm has over 570 staff across offices located in New York, London, Tokyo, and Hong Kong, and previous or current investments have included Twitter, Wella AG, Shopko, Adecco, Novell, Vinashin, Compuware, Hess Corporation, Sanko Steamship, Interpublic Group, Pernod Ricard, Sigfox, Comcast, and Samsung.