American Airlines Inks $5M Settlement With Military Pilots

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Jacklyn Wille

July 22 — American Airlines Inc. will pay nearly $5 million in cash and company stock to settle claims that it shortchanged the pension benefits of pilots who served in the military ( Allman v. Am. Airlines Inc. Pilot Retirement Benefit Program Variable Income Plan , D. Mass., No. 1:14-cv-10138, motion for preliminary settlement approval filed 7/21/16 ).

The airline will pay $500,000 in cash and $4.45 million in company stock to compensate about 1,150 pilots for pension benefits they allegedly missed out on by serving in the military, according to court papers.

The lawsuit accused the airline of violating the Uniformed Services Employment and Reemployment Rights Act, which requires employers to maintain certain benefits and re-employment rights for workers who take leaves of absence to serve in the military.

United Airlines Inc. settled similar claims for $6.15 million in 2014.

In 2009, Continental Airlines Inc. was hit with a similar lawsuit by pilots seeking vacation, sick leave and welfare benefits. That lawsuit hit a dead end in 2014, when a federal appeals court found the dispute to be governed by the Railway Labor Act.

The American Airlines settlement papers were filed July 21 in the U.S. District Court for the District of Massachusetts. The settlement won't be finalized until it receives approval from a federal judge.

The American Airlines pilots are represented by Cohen Milstein Sellers & Toll PLLC, Crotty & Son Law Firm PLLC, Law Office of Thomas G. Jarrard LLC, Washington Lawyers' Committee for Civil Rights and Urban Affairs, Law Office of Robert W. Mitchell and Block & Leviton LLP.

Bello Welsh LLP and O'Melveny & Myers LLP represents the airline defendants.

To contact the reporter on this story: Jacklyn Wille in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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