Federal appeals court rules against Pratt & Whitney effort to move jobs out of Conn.

Appeals court rejects Pratt & Whitney jobs move

HARTFORD, Conn. — A federal appeals court on Thursday rejected jet engine maker Pratt & Whitney’s plan to move 1,000 jobs out of Connecticut.

The 2nd U.S. Circuit Court of Appeals in New York upheld a federal judge’s ruling that said the subsidiary of United Technologies Corp. failed to make every reasonable effort to avoid shutting two engine repair plants in the state.

In their decision, the judges said U.S. District Judge Janet Hall’s injunction in February against the attempt to move jobs to Georgia, Japan and Singapore was supported by her findings that Pratt & Whitney breached its contract with the International Association of Machinists, which requires the company to make every reasonable effort to preserve jobs in Connecticut.

“There is an implied covenant of good faith and fair dealing in every contract,” the judges wrote in their decision.

The judges said Hall was not mistaken in reaching her conclusion.

“Quite the contrary,” they said. Hall could “easily infer” from the facts that Pratt, “in developing and seeking to implement the closure plan, was not pursuing in good faith the goal of preserving work within the bargaining unit,” the appeals court said.

James Parent, the chief negotiator for the Machinists, called the decision “great news.”

“Victory is ours again,” he said.

In a statement, Pratt & Whitney said it faced an “uphill battle” to reverse the lower court’s decision.

“We believe we acted in good faith and genuinely made every reasonable effort” to keep the jobs in Connecticut, the company said.

In her February decision, Hall said Pratt & Whitney’s actions were not taken out of a “mistaken view” of what the contract required.

“To the contrary, Pratt understood its obligations, but decisively attempted to evade them,” she said.

Pratt & Whitney, based in East Hartford, said in its appeal that Hall interpreted the contract’s definition of “every reasonable effort” to partly mean the company is “pursuing actively and in good faith the goal of preserving the work.”

Executives of the two plants took “significant steps” in 2008 and 2009, including capital investments, to turn the operations around, Pratt & Whitney said. The moves led to improvements, but they were insufficient, the company said.

Pratt & Whitney said it must consider in good faith all reasonable measures that would avoid moving work, but “has no obligation to invest additional funds in those operations or to accept lower profits.”

Pressed by the recession and the downturn in the aviation industry, the company has been trying to cut costs, including moving jobs.

Pratt & Whitney has scaled back operations in Connecticut since the 1960s when more than 20,000 workers were employed. The company now employs 11,000 in Connecticut, fewer than one-third of its global work force.

Behind the union’s lawsuit is the fear among workers about growing Asian markets, lower labor and other production costs in the South and overseas and the decline in Connecticut’s manufacturing industries.

The union has said its legal victory is temporary because it expects another round in the fight over job preservation when its contract with Pratt & Whitney expires Dec. 5.

Pratt & Whitney said it has made no decision on what action it will take related to jobs when the contract expires.

“As we approach that time, we will examine market conditions, customer decisions and the performance of our facilities. The process will include negotiations with the IAM as part of the discussions for the new contract,” the company said.

Connecticut Gov. M. Jodi Rell said in a statement she is pleased with the decision.

“Today’s ruling is great news for Connecticut, but even better news for the 1,000 Pratt workers and their families who would have been affected if these jobs were moved out of state,” she said.

United Technologies shares rose 32 cents to $66.88 in midday trading Thursday.