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cargo service worldwide. United was petitioner’s subsidiary
during 1985, 1986, and 1987.
During the subject years, United employed approximately
12,000 flight attendants and 6,150 pilots. Each of the employees
was assigned to a series of flights (pairings) that typically
originated and terminated at the home base of one or more of the
employees assigned to the pairing. Most of the pairings required
that the employees spend one or more nights away from their home
bases (overnight trips). The other pairings brought the
employees back to their home bases on the day of departure (day
trips).
United paid the employees compensation and benefits pursuant
to collective bargaining agreements (union contracts) which it
had entered into with the employees’ respective unions. Under
the union contracts, United paid the employees regular
compensation plus a per diem allowance. United paid each flight
attendant a per diem allowance equal to $1.50 times the number of
hours that he or she was on duty or on flight assignment. United
initially paid the same per diem allowance to each pilot but
increased the pilots’ per diem rate from $1.50 per hour to $1.55
per hour effective April 1, 1986. Neither United nor petitioner
required that the employees substantiate their use of the per
diem allowances, and neither United nor petitioner has any
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