American Airlines Profit Sharing Plan

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

Summary of the Lawsuit

This lawsuit alleges that the American Airlines Group, Inc. violated the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) by failing to credit periods of time in which participants of the American Airlines Group Inc. Global Profit Sharing Plan (“the Plan”) took military leave.

Summary of the Claims

The lawsuit concerns American Airlines Group, Inc.’s practice for calculating profit sharing awards under its Profit Sharing Plan in which forms of non-military leave, such as jury duty leave and union leave, are credited under the Plan while military leave to serve in the uniformed services is not credited or imputed in employees’ earnings.

The lawsuit alleges that American Airlines Group, Inc. violated USERRA in two ways: (1) 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, and (2) AAG infringed on the USERRA right of Plan participants to be credited for imputed earnings during a period of military leave. 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.

Class Action Allegations

This lawsuit is brought on behalf of the following class and subclasses:

Profit Sharing Class: Current and former employees of American Airlines, Inc., Envoy Air, Inc., Piedmont Airlines, Inc., and PSA Airlines, Inc. who, from January 1, 2016 through the date of judgment in this action, (1) are or were participants in the American Airlines Group Inc. Global Profit Sharing Plan, and (2) while participants in the Plan are or were either employed inside the United States or are or were a citizen, national or permanent resident alien of the United States employed in a foreign country, (3) after becoming a participant in the Plan took a period of military leave during a Plan Year in which they were eligible to receive an award under the Plan (or who would have been eligible to receive an award under the Plan if earnings associated with qualified military leave had been credited) and (4) whose profit sharing award under the Plan did not include credit or imputed earnings for periods of military leave.

American Pilot Profit Sharing Subclass: All members of the Profit Sharing Class who, from January 1, 2016 through the date of judgment in this action are or were eligible to participate in the American Airlines, Inc. 401(k) Plan for Pilots and are or were subject to taxation in the United States.

 

Paid Leave Class: Current and former employees of American Airlines, Inc. who took short term military leave from their employment with American Airlines, Inc. at any time from January 1, 2013 through the date of judgment in this action and during that leave were not paid the amount equal to what they would have earned had they continued to work their ordinary work schedules for American Airlines, Inc.

Excluded from the Classes and Subclass are the following:(a) any members of the Committee which was responsible for administering the Plan; (b) all former or current employees who previously reached settlements with or judgments against American Airlines Group, Inc. in their individual USERRA actions concerning inadequate profit sharing awards that were based on earnings that did not take into account imputed income for periods of short-term military leave and/or the failure to pay compensation to employees during their short term military leave; and (c) any employees who are covered by the 2005 Agreement between US Airways, Inc. and the Communication Workers of America representing Passenger Service Employees, the Passenger Service Agreement between American Airlines, Inc. and CWA-IBT Association representing Passenger Service Employees effective December 1, 2015, the Agreement between US Airways, Inc. and the International Association of Machinists and Aerospace Workers representing Fleet Service Employees dated May 8, 2008, the Fleet Service Agreement between US Airways, Inc. and the Fleet Service Employees as represented by the International Association of Machinists and Electrical Workers dated July 18, 2014, or the Agreement between US Airways, Inc. and the International Association of Machinists and Electrical Workers representing Mechanical Employees.

A motion for class certification is fully briefed and pending before the Court.

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. Discovery is currently stayed pending the Court’s decision on class certification.

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)
Ming Siegel, Paralegal (ming@blockleviton.com)
Block & Leviton LLP
1735 20th Street NW
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.