American Airlines Profit Sharing Plan

Scanlan v. American Airlines Group, Inc., No. 2:18-cv-04040-HB (E.D. Pa.)

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Summary of the Lawsuit

This lawsuit alleges that the American Airlines Group, Inc. (“AAG”) violated the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) and the terms of the American Airlines Group Inc. Global Profit Sharing Plan (“the Plan”) by failing to credit periods of time in which participants of the Plan took military leave. This lawsuit also alleges that American Airlines, Inc. (“American”) violated USERRA by failing to pay pilots who took short-term military leave at least the difference between their military pay and their airline pay, while paying pilots who took other, comparable forms of leave from employment.

Summary of the Claims

The lawsuit concerns AAG’s practice for calculating profit sharing awards under its Profit Sharing Plan. AAG credits certain forms of non-military leave, such as jury duty leave and bereavement leave, in calculating profit sharing awards under the Plan. But AAG does not credit military leave to serve in the uniformed services or impute it in employees’ earnings. As a result, Plaintiff and Class members have received smaller amounts of profit sharing awards than they would have received had their military leave been credited under the Plan and they were able to defer amounts into their defined contribution plan accounts. This lawsuit also concerns American’s practice of not paying pilots who take short-term military leave at least the difference between their military pay and their airline pay, while paying pilots who took other, comparable forms of leave from employment, such as jury duty leave and bereavement leave.

The lawsuit alleges three claims. First, Count I alleges that AAG breached USERRA’s requirement to treat military leave no less favorable than other forms of leave by failing to credit military leave when the Plan credits other, comparable forms of leave. Second, Count II alleges that AAG breached the terms of the Plan by failing to credit military leave. And third, Count III alleges that American breached USERRA’s requirement to treat military leave no less favorable than other forms of leave by failing to pay pilots at least the difference between their military pay and their airline pay, while paying pilots who took other, comparable forms of leave from employment.

Class Action Allegations

The Court has certified the claims in this lawsuit on behalf of the following class and subclasses:

(a)  For Count I, the court certifies a subclass under Rule 23(b)(2) consisting of current American Airlines, Inc. pilots who presently serve in the military and who: participate at some point in the AAG Global Profit Sharing Plan since its inception on January 1, 2016 through the date of judgment in this action; are employed in the United States or are a citizen or national or permanent resident of the United States and employed in a foreign country while participants in the Plan; took or take short-term military leave in a year during which they were entitled to receive an award under the Plan; and were not credited or imputed earnings for this short-term military leave.

(b)  Also for Count I, the court certifies a subclass under Rule 23(b)(3) consisting of former pilots of American Airlines, Inc. or pilots of American who are former members of the military who: participated at some point in the AAG Global Profit Sharing Plan since its inception on January 1, 2016 through the date of judgment in this action; were employed in the United States or were a citizen or national or permanent resident of the United States and employed in a foreign country while participants in the Plan; took short-term military leave in a year during which they were entitled to receive an award under the Plan; and were not credited or imputed earnings for this short-term military leave.

(c)  For Count II, the court certifies a subclass under Rule 23(b)(2) consisting of those current American Airlines, Inc. pilots who presently serve in the military and who: participate at some point from January 1, 2016 through the date of judgment in this action in the AAG Global Profit Sharing Plan and are or were eligible to participate in the American Airlines, Inc. 401(k) Plan for Pilots and are subject to taxation in the United States; are employed in the United States or are a citizen or national or permanent resident of the United States and employed in a foreign country while participants in the AAG Global Profit Sharing Plan; took or take short-term military leave in a year during which they were entitled to receive an award under the AAG Global Profit Sharing Plan; and were not credited or imputed earnings for this short-term military leave.

(d)  Also for Count II, the court certifies a subclass under Rule 23(b)(3) consisting of those former American Airlines, Inc. pilots or American pilots formerly in the military who: participated at some point from January 1, 2016 through the date of judgment in this action in the AAG Global Profit Sharing Plan and are or were eligible to participate in the American Airlines, Inc. 401(k) Plan for Pilots and are subject to taxation in the United States; were employed in the United States or were a citizen or national or permanent resident of the United States and employed in a foreign country while participants in the AAG Global Profit Sharing Plan; took short-term military leave in a year during which they were entitled to receive an award under the AAG Global Profit Sharing Plan; and were not credited or imputed earnings for this short-term military leave.

(e)  For Count III, the court certifies a subclass under Rule 23(b)(2) consisting of all current American Airlines, Inc. pilots who presently serve in the military and took or take short-term military leave while employed at American at any time from January 1, 2013 through the date of judgment in this action and were not paid for that leave equal to what they would have received had they taken leave for jury duty or bereavement.

(f)   Also for Count III, the court certifies a subclass under Rule 23(b)(3) consisting of all former American Airlines, Inc. pilots or American pilots formerly in the military who took short-term military leave while employed at American at anytime from January 1, 2013 through the date of judgment in this action and were not paid for that leave equal to what they would have received had they taken leave for jury duty or bereavement

Excluded from the class outlined above are those American Airlines, Inc. pilots responsible for administering the AAG Global Profit Sharing Plan and those American pilots who reached individual settlements with or judgments against AAG regarding inadequate profit sharing or against American for failure to compensate short-term military leave under the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. § 4301 et seq.

Status of the Litigation

The Complaint was filed on September 19, 2018. The Amended Complaint was filed on January 7, 2019.

Defendants filed a Motion to Transfer Venue on January 22, 2019. The Court denied Defendants’ Motion to Transfer Venue on April 2, 2019.

Defendants filed a Motion to Dismiss the Amended Complaint on April 9, 2019, which was denied in part and granted in part on June 18, 2019.

Plaintiff filed a Second Amended Complaint and the Motion for Class Certification on February 27,2020. Defendants moved to dismiss Count II of the Second Amended Complaint for lack of subject matter jurisdiction on March 20, 2020, which is the count that covers the breach of contract claim with respect to the Profit Sharing Subclass. The Court denied Defendants’ motion to dismiss Count II on May 5, 2020. 

On September 10, 2020, the Court issued an order staying the case pending a decision in the United States Court of Appeals for the Third Circuit in Travers v. FedEx Corporation, No. 19-6106 (E.D. Pa.).

The Court lifted the stay after the Third Circuit issued a decision on August 10, 2021 in Travers v. FedEx Corporation, No. 19-6106 (E.D. Pa.).

 A hearing on Plaintiff’s Motion for Class Certification was held on September 9, 2021.  The court granted the Motion for Class Certification on October 8, 2021. Defendants filed a Motion to Modify the Class Definition on January 28, 2022, which the Court granted on April 6, 2022. The Court subsequently vacated this Order and again modified the definition of the Class and the Subclasses on May 3, 2022.

 The parties have substantially completed fact discovery and are in the process of conducting expert discovery. Motions for summary judgment are due July 29, 2022.

No trial date is yet set in this case.

Whom to Contact for More Information

If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:

R. Joseph Barton, Esq. (jbarton@blockleviton.com)
Colin M. Downes, Esq. (colin@blockleviton.com)
Ming Siegel, Paralegal (ming@blockleviton.com)
Block & Leviton LLP
1633 Connecticut Ave. NW, Suite 200
Washington DC 20009
(202) 734-7046

Block & Leviton is co-counsel in this litigation with the Garner Firm Ltd., Outten & Golden LLP, Crotty & Son Law Firm, PLLC, and the Law Office of Thomas G. Jarrard LLC.

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