American Airlines USERRA & ERISA Litigation
American Airlines Pilots USERRA & ERISA Pension Contribution Litigation
Summary of the Lawsuit
This lawsuit was filed against the American Airlines, Inc. Pilot Retirement Benefit Program – Variable Income Plan ("the Plan"), State Street Bank & Trust Co., a fiduciary of the Plan, as well as other fiduciaries of the Plan, on behalf of pilots who took leave from American Airlines to serve in the United States Armed Forces since 1997 and received less than the amount of pension contributions that they were entitled to receive under the federal Uniformed Services Employment and Reemployment Rights Act ("USERRA") and under the terms of the Plan. The action, Allman v. American Airlines, Inc. Pilot Retirement Benefit Program Variable Income Plan, et al., 1:14-cv-10138 (D. Mass.), was filed on January 17, 2014, and is pending in the federal district court in Boston, Massachusetts.
Summary of the Claims
The Complaint alleges that the Plan failed to provide pilots with, and the fiduciaries of the Plan failed to ensure that pilots received, pension contributions for periods of military leave based on each pilot's own 12-month average earnings before the period of military leave, as required by USERRA and the terms of the Plan Document. As a result, the Complaint alleges that these American pilots did not receive the full amount of pension contributions that they were entitled to receive. The Complaint also alleges that the fiduciaries failed to ensure that the Plan received the proper contributions under the terms of the Plan, and failed to take any action to collect the pension contributions owed to the Plan by American Airlines.
Under USERRA, 38 U.S.C. § 4318, employees who take military leave are entitled to receive pension contributions covering the periods when they serve in the United States Armed Forces. When an employee's compensation is not "reasonably certain," USERRA requires that pension contributions be based on the employee's average earnings for the 12-month period preceding any military leave. The Complaint alleges that the earnings of the American pilots were not reasonably certain and their pension contributions should have been based on their own average earnings from the 12-month period prior to their military leave. The Complaint alleges that the terms of the Plan incorporated these provisions of USERRA, but in practice the Plan and its fiduciaries failed to follow USERRA or the terms of the Plan.
The Complaint seeks a determination that the policy or practice by which the Plan calculated pension contributions for pilots on military leave violated USERRA and the terms of the Plan. In addition, the Complaint requests that the fiduciaries of the Plan who implemented this policy and failed to properly collect the pension contributions restore the losses to the Plan as a result of their failure to require American Airlines to make the proper contributions and that such amounts recovered be allocated to the accounts of the members of the Class.
Class Action Allegations
This lawsuit is brought as a class action on behalf of all current and former American Pilots who are or were participants in the American Airlines, Inc. Pilot Retirement Benefit Program (or beneficiaries of such participants):
1. who, after becoming an American Airlines, Inc. employee, completed a period of qualified military service that lasted 30 days or more and ended on or after January 1, 1997; and
2. who, with respect to any such period of qualified military service, did not receive a pension contribution into the Variable Income Plan based on the pilot's own average rate of compensation during the 12 months prior to the commencement of the pilot's period of qualified military service (or, if shorter, the period of employment immediately preceding such period of qualified military service); and
3. whose average rate of compensation during the 12 months prior to any period of qualified military service that lasted 30 days or more (or, if shorter, the period of employment immediately preceding such period of military leave) exceeded the monthly rate of compensation that was actually used to determine the pension contribution for the pilot's period of qualified military service, as determined under either of the methodologies used in the parties' negotiations; and
Excluded from the Class are: (a) all former or current pilots who previously reached settlements with or judgments against American resolving or releasing any claims arising during the Class Period under USERRA and/or ERISA related to inadequate pension contributions into the Variable Income Plan for periods of military leave; and (b) any person who served as a fiduciary of the Plan and their beneficiaries under the Plan and any member of the immediate family of and any heirs, successors or assigns of any such person.
Status of the Litigation
The Complaint was filed on January 17, 2014. On April 17, 2014, the Court granted the Parties' Joint Motion to Stay Litigation to allow the Parties to collect and exchange information and to explore the possibility of settlement. The stay was extended until September 14, 2015. On September 28, 2015, Defendants filed an answer to the complaint. Plaintiffs filed an unopposed motion for class certification under Rule 23(b)(3), which was granted by the court on March 28, 2016.
Plaintiffs and Defendants reached agreement on a settlement on July 21, 2016. Plaintiffs and Defendants reached a settlement and executed and filed the Settlement Agreement with the Court and Plaintiff moved for preliminary approval on July 21, 2016. The Court granted preliminary approval on August 5, 2016. Notice of the Settlement was sent to the Class by no later than September 5, 2016. The Court held a fairness hearing on January 27, 2017. The Court entered the order on final approval of the settlement on February 15, 2017. The benefits under the settlement will be paid through the plan and may take as much as nine months to be paid.
- Final Approval Order, February 15, 2017
- Law 360 Article, "Veterans Seek OK For American Airlines Benefit Settlement"
- Process for Challenging Personnel Data
- Plan of Allocation
- Methodology for Estimating Potential Losses, Benefits, and Damages
- Settlement Notice
- Order Granting Plaintiffs' Unopposed Motion for Class Certification – March 28, 2016
- Order Granting Preliminary Approval of Settlement – August 5, 2016
- Class Action Complaint – 1/17/2014
Whom to Contact for More Information
For information about whether you were identified as a member of the Settlement Class, please contact the Settlement Administrator (hired by Class Counsel):
American Pilot USERRA Settlement Administrator
c/o A.B. Data, Ltd.
P.O. Box 170500
Milwaukee, WI 53217
1 (877) 236-6116
For other information about the settlement, you may contact:
Block & Leviton is co-counsel in this litigation with the Outten & Golden, the Law Office of Thomas G. Jarrard, Crotty & Son PLLC, and Robert Mitchell.