(Updates with letter to American Airlines employees)
By Nate Raymond
Oct 3 (Reuters) - American Airlines, Inc lost a court battle in its effort to block a vote by nearly 10,000 passenger service agents on whether to unionize.
Wednesday's decision by the 5th U.S. Circuit Court of Appeals in New Orleans came amid a separate labor dispute by the airline's 8,000 pilots and its parent company, AMR Corp. , which filed for bankruptcy in November.
The pilots are expected to authorize a strike later this week, escalating a long-running labor dispute that has already created serious flight delays at the nation's No.3 carrier and a public relations nightmare for AMR Corp.
The appeals court ruling reverses an earlier decision by U.S. District Judge Terry Means in Fort Worth, Texas that blocked the agents' union election from going forward.
The Communications Workers of America, which is seeking to represent the agents, welcomed the latest ruling and said in a statement the agents had been prevented from a vote on whether to organize "for far too long."
The CWA also represents reporters at Reuters News.
American Airlines sued the National Mediation Board in May, asserting that the agency had authorized the election based on an outdated standard for deciding if there was enough support by workers to unionize.
A law that took effect in February raised the proportion of employees required to sign cards stating they wanted a union vote to at least 50 percent, up from 35 percent.
Judge Means blocked the election in June, finding that the 50 percent standard applied to the CWA's application to represent the agents.
But in a two-page order, a three-judge panel of 5th Circuit said the trial court "erred in exercising its jurisdiction." The court said review of National Mediation Board decisions was only warranted when the board has committed "egregious error."
In a letter to American Airlines employees provided to Reuters by a company representative, the airline said the panel's ruling implied that the "50 percent law" may still apply and may ultimately preclude a valid election.
The National Mediation Board will now need to schedule a new vote, said Chuck Porcari, a CWA spokesman. The vote had initially been scheduled for between June and August 2012, he said.
The case is American Airlines, Inc. v. National Mediation Board, 5th U.S. Circuit Court of Appeals, No. 12-10680
(Reporting by Nate Raymond in New York; Editing by Leslie Gevirtz and Richard Pullin)
((Nate.Raymond@thomsonreuters.com and Twitter @nateraymond)(646-223-6341)) Keywords: AMR UNION/