updated 6/2/2005 8:35:15 PM ET 2005-06-03T00:35:15

A federal judge on Thursday declined to reinstate 472 unionized ramp workers laid off by Alaska Airlines at Seattle-Tacoma International Airport.

U.S. District Judge Ricardo S. Martinez said he did not have jurisdiction over the dispute, which falls within the purview of a national review board. He also found that the airline had a right to replace the workers with subcontractors three weeks ago.

That was the argument made earlier in the day by Alaska lawyer Chris Hollinger, who said the company had merely tried to cut costs amid rising fuel prices and fierce competition from low-cost carriers.

"The company has tried very hard to make the best of what is, unfortunately, a very bad situation in the airline industry," Hollinger said.

Machinists union lawyer David Campbell urged Martinez to issue an order reinstating the workers, who handle baggage and guide planes at airport gates. Alaska violated the federal Railway Labor Act by replacing the workers with subcontractors during mediation, he argued.

Much of Thursday's argument centered on a provision in the labor act that requires companies and unions to maintain the status quo while the National Mediation Board reviews cases.

The International Association of Machinists and Aerospace Workers argued that the status quo was violated when the workers were replaced. The company disagreed, saying it was merely exerting its right under the previous collective bargaining agreement to hire subcontractors to save money.

Martinez issued his ruling about five hours later.

Because Alaska did not give two months' notice before the firings, the workers are being paid and given benefits through July 15, as required by law. Some could take company jobs in the state of Alaska, but that would require displacing less-senior workers in that state, union members say. Workers could also be eligible for as much as tens of thousands of dollars in severance pay, depending on seniority.

The collective bargaining agreement between Alaska's parent, Alaska Air Group Inc., and the ramp workers took effect in 2000. Negotiations to amend the contract began in September 2003, with Alaska seeking to cut $2 million a year from the cost of the contract. In January, the company told the union it would need to cut $13.7 million a year if it wanted to save the ramp workers' jobs.

With talks failing, the National Mediation Board assigned a mediator on April 12. A month later, union members overwhelmingly rejected Alaska's latest contract offer. Although the company initially insisted talks would continue through the summer, it began bringing in 375 workers from a subcontractor days later.

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