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DOJ sues American Airlines on pilot benefits
Suit claims airline short-changed reservists during military service
By Ruth Mantell, MarketWatch
Last Update: 7:57 PM ET Jan. 12, 2006
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SAN FRANCISCO (MarketWatch) -- The Department of Justice said Thursday it is suing American Airlines, alleging the company denied three pilots employment benefits during their military service.














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The suit, filed in U.S. District Court in Dallas, alleges that American Airlines (AMR:
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AMR20.86, -0.74, -3.4%) violated the Uniformed Services Employment and Reemployment Rights Act of 1994.

The complaint alleges that American Airlines conducted an audit of the leave taken for military service by American Airline pilots in 2001, and that based on that audit, the airline reduced the employment benefits of pilots who had taken military leave, while not reducing the same benefits of pilots who had taken similar types of non-military leave.

"This nation depends on our reservists to faithfully carry out their duty," Wan Kim, assistant attorney general for the civil rights division, said in a statement. "No reservists - indeed, no members of our armed forces - should ever be punished or discriminated against for answering the call of duty."

The complaint was filed on behalf of pilots Mark Woodall, Michael McMahon and Paul Madson. Woodall is a captain and McMahon a commander in the Naval Reserve, according to the Justice Department. Madson is a lieutenant colonel in the South Dakota Air National Guard, federal officials said.

Officials at AMR, American Airlines' parent company, didn't immediately return a phone call seeking comment.

The lawsuit represents the first proposed class action complaint filed by the United States under USERRA.

Earlier this week, American Airlines said it's thanking U.S. military personnel by extending through June 1 special offers for discounted airfares, relaxed advance purchase requirements and preferred boarding privileges for active-duty members.

"We appreciate and admire the courageous efforts of U.S. military personnel around the world to keep our country safe and strong," Dan Garton, executive vice president of marketing, said in a statement. "And we recognize the great sacrifice that their family members also make. As a result, American Airlines is pleased to extend these special offers to military members and their loved ones."

Shares of AMR Corp., parent company of American Airlines, closed at $20.86, down 3.43%.

 

[TWU informer]

Well that's worth a factor of X2 on the bonuses for "superior performance" and ideas that "save the company money". h34r:

 

[FWAAA]

Well, if it is determined that AA violated the law, then that's bad. AA should determine who screwed up and should fire them.

Of course, we already knew that AA management was the spawn of Satan, so what's new? If there's an evil course of action, it's obvious that is the path chosen each time by AA management. B)

 

[eolesen]

IIRC, the DOJ has sued AMR several times, but I don't believe they've won a case yet. Then again, there's a first time for everything.

My immediate reaction is that if this were a true violation, APA would have been dealing with it thru the grievance process, right?

Then why is DOJ the one filing the lawsuit?...

 

[Hunter]

My immediate reaction is that if this were a true violation, APA would have been dealing with it thru the grievance process, right?

Then why is DOJ the one filing the lawsuit?...

Let's see. Who or what will get AA's attention first - an APA grievance or a DOJ lawsuit? Therein lies the answer to your question.

Because the alleged behavior might be a violation of the APA contract but is definitely a violation of federal law if true, the courts are the appropriate forum for this issue.

Is it just me or does AA seem to have an uncanny ability to prolong the grievance process to the point that the outcome is often irrelevant.

 

[flyboymd8]

It is very clear that you don't have a grasp of the Veteran's Act. This could have easily been something that is not addressed by the contract, and it makes sense not to address it in a contract as federal law trumps it, so why waste time and energy addressing something that is already assured through federal law. When it comes to veteran rights, the DOJ doesn't get involved until all avenues have been exhausted, that means going through the veteran reemployment rights board which tries to directly deal with the offending company to resolve the issues, if the issues can't be resolved then it goes to the DOJ, which does it's own investigation and takes action based on it's findings. We'll see how all this shakes out, but you clearly don't understand the pilot contract nor the veteran's Act.

 

[Ch. 12]

IIRC, the DOJ has sued AMR several times, but I don't believe they've won a case yet. Then again, there's a first time for everything.

You are absolutely correct. AMR's $influence$ has made them nearly impervious to DOJ suits. Times might be a changin' now, though, that issues like Jack Abramhof have made it to the forefront and AMR will not survive just on lobbying clout alone. But then again...the general public doesn't seem too taken aback by that scandal so maybe AMR is safe and will continue its ownership of the legislature and the DOJ. Why would we want ethics to impede on bottom lines?

 

[Wretched Wrench]

AA should determine who screwed up and should fire them.

I believe that would require a drastic change in AA's corporate culture. Not gonna happen.

 

[B.O.B.]

Gov't Files Suit Vs. American Airlines
Friday January 13, 11:45 am ET
Government Files Suit Against American Airlines, Says Co. Cut Benefits of Military Pilots


DALLAS (AP) -- The Department of Justice has filed a class-action lawsuit against American Airlines, claiming the carrier illegally denied benefits to pilots while they were serving in National Guard and reserve units...



This is great news!!!! It's about time AA got a taste of their own medicine. They screwed the pilots and now the Department of Labor is going to screw AA!

They didn't pay them because AA needed that money to pay those 7 figure bonuses. :down: :down:

 

[eolesen]

Finally, a little more information in Friday's Jetwire which says what the suit is over:

In examining the class-action suit filed by the Department of Justice this week, the allegations deal with accrual of vacation time and accrual of sick time while on military leave and claims that American should modify pilot bid rules for persons returning from military leave.

I might not know much about veterans laws, but accrual of SK and VC and bid rules are clearly contractual issues, so again I will ask, why isn't APA all over this?

 

[AirLUVer]

The suit was filed because when on some MLOA and some PLOA's VC and SK accruals go on as normal. While on long term ML (Military Leave), time is suspended. This does not affect those pilots that are just doing the weekend warrior time, just the ones that are called to active duty. Probably the reason for the low number of pilots in the class action suit. Personally I would have to go back and read that section of the contract regarding leave types and which accrue and which do no accrue VC and SK time accruals.

Basically, if you spent this year earning a paycheck from Uncle Sam, does AA need to be paying you vacation time next year.

 

[AA80Driver]

Finally, a little more information in Friday's Jetwire which says what the suit is over:
I might not know much about veterans laws, but accrual of SK and VC and bid rules are clearly contractual issues, so again I will ask, why isn't APA all over this?

The APA does have a grievance on this issue. However, non-accrual of SK and VC, cashing out of current year VC, and bidding ineligiblity for personnel on Military Orders are not clearly covered in the contract to the best of my knowledge. So, in this case USERRA would appear to be governing. Other leave types, such as jury duty and paid union leave, are afforded these benefits in contrast. AA's implimentation of these provision do not appear to meet the requirements of federal law (which is the nexus for the lawsuit). Basically, the law says you can't subodinate the benefits of military leave to other leave types.

The following is the case precedent for this under USERRA:

"The leading VRR case on the “furlough or leave of absenceâ€￾ clause is Waltermyer v. Aluminum Company of America, 804 F.2d 821 (3rd Cir. 1986). In that case, the comparison was to jury leave, a form of paid leave. USERRA’s legislative history clearly indicates that Congress intended to adopt and reaffirm Waltermyer: “The Committee [House Committee on Veterans’ Affairs] intends to affirm the decision in Waltermyer … that, to the extent the employer policy or practice varies among various types of non-military leaves of absence, the most favorable treatment accorded any particular leave would also be accorded the military leave, regardless of whether the non-military leave is paid or unpaid.â€￾ House Report No. 103-65, 1994 U.S. Code Congressional and Administrative News 2449, 2466-67 [emphasis supplied]."

Refer to www.esgr.org for additional details.

While only 3 pilots are named as plaintiffs, hundreds of pilots have been on military leave for various lengths of time since 9/11, so their is potential for class action status.

 

[eolesen]

Interesting website.

Vacation, annual leave, and similar accrued leave days. Employers are not required to allow members to accrue vacation time while performing military service

If sick time is considered "similar accrued leave days" then I can see where there may be some confusion over whether or not it's legal.

entitled to such other rights and benefits not determined by seniority as are generally provided by the employer of the person to employees having similar seniority, status, and pay who are on furlough or leave of absence under a contract, agreement, policy, practice, or plan in effect at the commencement of such service or established while such person performs such service.

Do any of the longer term unpaid leaves offer sick time or vacation time accrual? I don't have the link to it, but one of the employer FAQ's I saw last week said that when comparing leave types, they should be of similar duration. Specifically, it gave an example of two months of jury duty not being a valid benchmark for a twelve month military leave.

 

[AA80Driver]

Interesting website.
If sick time is considered "similar accrued leave days" then I can see where there may be some confusion over whether or not it's legal.
Do any of the longer term unpaid leaves offer sick time or vacation time accrual? I don't have the link to it, but one of the employer FAQ's I saw last week said that when comparing leave types, they should be of similar duration. Specifically, it gave an example of two months of jury duty not being a valid benchmark for a twelve month military leave.

Like military leave, there are instances where jury duty and union leave are of extended duration and do offer benefit accruals. Military leaves are not one size fits all either. Some are a few days, some a few weeks, and some may last a year or longer. Often the member has little control over the needs of the service and duration (eg. Iraqi Freedom, Hurricane Katrina).

At this point it appears to be out of AA/APA's hands unless there is a settlement. Even if it's a class action, I can't imagine the total value of any additional benefit liabilities will be more than a few million dollars using some back of the envelope math. We'll see what the court decides.

 

[AirLUVer]

At this point it appears to be out of AA/APA's hands unless there is a settlement. Even if it's a class action, I can't imagine the total value of any additional benefit liabilities will be more than a few million dollars using some back of the envelope math. We'll see what the court decides.

Would there be a fine?

AA could argue for a court order to re-value the VC/SK accruals for all affected employees, in lieu of restitution? How will this affect other airlines and airline employees, most of which use the same rules for long term ML?