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Southwest, union reach agreement

Southwest Airlines Co. confirmed Tuesday that the airline’s customer support and service employees, which are represented by the International Association of Machinists and Aerospace Workers District 142, have voted to ratify a tentative, four-year employment contract.

Dallas-based Southwest (NYSE: LUV) said the new contract expires in October of 2012.

The IAM union represents 5,300 Southwest employees. Fifty-four percent of the voting union members approved the contract.

“This agreement provides financial security for our members while giving Southwest Airlines the stability it needs to continue growing in a very difficult economic climate,” said IAM District 142 President Tom Higginbotham.

The ratified contract includes an automatic three-percent wage increase, retroactive to Nov. 1 of last year. The top pay among union employees under the new contract will increase to $26.61 per hour over the life of the contract.

A statement issued by the union indicated that other details include an increase in retirement benefits, a one-percent increase in company-paid 401(k) contributions, and Southwest will increase 401(k) matching contributions to 9.3 percent in January of 2011.