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An imminent court decision on Northwest Airlines flight attendants' right to strike could disrupt the carrier's restructuring and also change how the entire industry negotiates with its union employees.

Both airlines and organized labor are eagerly anticipating the ruling from the US District Court. The decision could be a step toward settling a long dispute between unions and carriers that see bankruptcy as a risk-free way to cut labor costs.

Northwest, the No. 5 US airline, has asked the court to block a strike threatened by the Association of Flight Attendants, which believes its right to take job action was triggered in July when the airline voided its labor contract with the permission of a bankruptcy court judge.

«If the court were to hold that the flight attendants' strike was lawful, and if that ruling were to be upheld on appeal, it would certainly change the dynamic of bargaining in the airline industry,» said Willis Goldsmith at the Jones Day law firm. Formerly chairman of Jones Day's labor and employment law practice, Goldsmith represented management.

It is fairly common in airline bankruptcies for carriers to ask permission to void contracts of unions that do not make requested concessions. Other major airlines, however, have resolved these disputes before any court decisions.

UAL, parent of United Airlines, for example, twice asked a bankruptcy court to allow it to cancel contracts. The carrier, however, reached its savings target in the shadow of various strike threats, heading off a judge's ruling.

As a result, all eyes are on Northwest, since this would be the first test of whether a union can legally strike against an airline that has abrogated its contract with permission from a bankruptcy judge.

A ruling for AFA would set a legal precedent with sweeping implications for any carrier or union involved in labor disputes during bankruptcy, said airline consultant Robert Mann.

«This would represent a big change from managements' presumption so far,» Mann said. «My hope would be that it results in more intense bargaining to a consensual solution.»

Northwest contends a flight attendants' strike would violate the Railway Labor Act, which safeguards interstate commerce. The law says airlines and unions must be released from formal mediation before the workers are free to strike. The AFA says Northwest effectively ended mediation by voiding the contract.

US District Judge Victor Marrero is expected to rule on the matter soon, but no definite date is set. A bankruptcy judge previously declined to block the strike, saying the matter was not within his jurisdiction.

The contract termination and subsequent union standoff tests a contention by Northwest and other airlines that a company may void a labor contract with court approval and still enjoy protection from retaliatory strikes.

If Marrero agrees, permanently blocking job action, it would essentially strip the AFA -- and other unions -- of a key defense against corporate cost-cutting.

Northwest, which filed for bankruptcy in September, has said it needed USD$1.4 billion in average annual labor savings to survive. The carrier has called on the flight attendants to concede USD$195 million of that amount.

The airline reached its total savings target in July through consensual deals with its other unions and by unilaterally imposing a new contract on the flight attendants, which had twice rejected deals negotiated by union leaders.

The AFA had set a strike deadline for last Friday, but Marrero granted Northwest a preliminary injunction, saying he needed more time to consider the matter.

The union was threatening small, intermittent disruption rather than a mass walkout.

The judge encouraged the two sides to resume negotiations and asked for a status update on Wednesday. The union and Northwest each say they are willing to talk, but formal negotiations had not resumed as of Thursday.

The AFA told Marrero in a letter on Wednesday that there was little possibility of meaningful negotiations with the airline.

Northwest submitted a letter saying it «stands willing and able» to resume negotiations. The carrier said it was preparing new proposals for the AFA and was willing to consider any from the union.

Marrero may refrain from issuing a definitive ruling. If he does, the decision would probably be appealed, said Damon Silvers, associate general counsel at the AFL-CIO union coalition.

«A wide variety of things could happen next,» Silvers said. «You could see an appeal. You could see a resolution of the underlying issues.»

(Reuters)