Warren Buffett faces labor problems

Warren Buffett in 90 seconds
Warren Buffett in 90 seconds

Warren Buffett's company employs more than 300,000 workers and is not exactly known for labor issues. Until now.

Berkshire Hathaway (BRKA)'s private jet business NetJets is embroiled in a nasty dispute with its pilots union, which has filed a federal lawsuit accusing management of dirty online tricks against pilots.

In the suit, the pilots accuse NetJets of retrieving confidential messages by accessing a password-protected site the union uses to communicate with members. The pilots also charge that NetJets management used a Twitter account to make it look like a fellow pilot was urging union members to take action that could have gotten them fired for violating labor laws.

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NetJets, which caters to wealthy customers, employs about 3,000 pilots, according to the union.

"We fly the wealthiest people who expect the best. They're told we're compensated like major airline pilots. That's not the case," said Leroux. He said NetJet pilots get only 60% of the pay of pilots at Delta Air Lines (DAL) or Southwest (LUV).

The company is hiring its first new pilots in over six years and is buying new jets after experiencing growth in demand for its flights. Union president Pedro Leroux has said that 500 pilots who had been laid off during the 2009 downturn have all been called back to work.

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Despite the growth, the management is demanding pay and benefit cuts and changes in work rules, Leroux said. The union has been locked in negotiations on a new contract since June 2013.

"If something doesn't change in what they're asking, I don't see us resolve this without a strike," he said.

The pilots' suit was filed in December in Columbus, Ohio, where NetJets is headquartered. The company has yet to respond to the suit and has until later this month to do so.

NetJets spokeswoman Chris Herbert said she couldn't comment on pending litigation.

Herbert said NetJets has "one of the best compensation and benefits packages in the industry." She denied the company is seeking any change in pay scale. She said management is asking pilots to pay for part of their health premiums for the first time and that a lump sum bonus is being proposed which would cover that cost.

The Teamsters, which represents NetJets' flight attendants, mechanics and dispatchers, is also in the process of contract negotiations. The two unions have joined together to form a coalition and hold informational pickets together.

The two unions sent Buffett a letter complaining about the state of negotiations and NetJets management in March of last year, but Leroux said they never got any response.

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