United Airlines Settles USERRA Pension Contribution Lawsuit for Lofty $6.15 Million
Author: Gloria Ju
June 2, 2014
United Airlines agreed to pay $6.15 million to settle claims that it shorted pension contributions for pilots on military service leave in violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA). The settlement - reportedly one of the largest ever under USERRA - covers 1,160 pilots who took military leave from 2000 to 2010.
United had calculated pension contributions based on the minimum flight hours guaranteed under the pilots' collective bargaining agreement. The pilots argued that United should have calculated contributions based on each pilot's average rate of compensation or flight hours during the 12-month period immediately preceding the military leave.
Payments will be made, to the extent possible, into the pilots' pension accounts in order to preserve favorable tax treatment. The pilots are expected to receive a payment equal to, or greater than, the amount that was underpaid.
As part of the settlement, United has also agreed to:
- Change its method for calculating pension contributions during periods of long-term military leave;
- Maintain for the first time a written policy setting forth its calculation method; and
- Improve communication with its pilots, both before military leave begins and after it ends.
USERRA is the federal law that provides employment protections to members of the US military, including:
- The right to take a leave of absence to provide military service;
- Reinstatement rights when the leave ends;
- Continuation of health benefits during leave; and
- Employer obligations related to pension plan contributions during an employee's leave of absence and upon the employee's return from leave.
USERRA also prohibits an employer from discriminating or retaliating against an employee who has served, is serving or will serve in the military.