Hawaiian trustee
wins employee status
A federal bankruptcy judge ruled yesterday that the trustee in the Hawaiian Airlines bankruptcy can become an employee of the airline but a former executive cannot be forced to quit his current job because he promised not to compete with Hawaiian.
U.S. Bankruptcy Court Judge Robert Faris ruled that Joshua Gotbaum, the trustee in charge of Hawaiian Airlines as it goes through a bankruptcy reorganization, can become an employee of the airline so he can get discount travel privileges and possibly become a member of an employees' group health plan.
Faris agreed that the change would save money at the bankrupt company.
And in a separate motion, Faris ruled that John Happ, a former vice president of marketing and sales at Hawaiian, can't be forced to leave a similar job at Indianapolis-based ATA because he had promised not to compete with Hawaiian.
In the main case, about trustee Gotbaum's desire to become an employee and officer in order to give him more access to the airline's operations, Faris agreed with opponents that Gotbaum's role as an employee should be seriously limited.
Attorneys for American Airlines and other creditors argued that it is almost unheard of for a trustee in charge of the operations of an airline to be named an employee and officer of the airline.
Gotbaum's attorney Bruce Bennett said Gotbaum will take no pay as an employee and will accept the lowest officer status available, without replacing anyone else, for the sake of getting on with the practical aspect of getting Hawaiian reorganized.
He needs access to the airports and other parts of Hawaiian's operations that would be denied a non-employee, Bennett argued.
Faris ruled that employee status suits Hawaiian's particular circumstances.
Faris ruled earlier in the day that Happ, who was Hawaiian's top marketing executive for five years before he was let go in February, cannot be forced to leave a similar job at ATA, the subsidiary of ATA Airlines Inc., which has been building up its presence in the mainland-Hawaii passenger market.
Last month Hawaiian, through trustee Gotbaum, asked the bankruptcy court to stop Happ from working for ATA.
Happ had a severance agreement in which he said he would not go to work for at least 18 months for another airline competing with Hawaiian for the same business. Five months later Happ joined ATA as vice president of marketing and sales. Soon after ATA started a new Seattle-Honolulu service and boosted its California-Hawaii service in direct competition with Hawaiian.
Happ argued that he had a right to do whatever he wanted because Hawaiian did not pay him the promised severance pay. Anyway, he and his attorney Louise Ing said in court filings, the non-compete agree- ment was not supposed to apply unless the airline Happ joined had at least 5 percent of its business in the Hawaii market.
ATA has said that while its Hawaii business is growing, it is still well under 5 percent of its total business.
Judge Faris' decision on the Happ matter was preliminary and could be overturned at a future hearing.