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United Airlines settles USERRA case for $6M

May. 20, 2014 - 04:47PM   |  
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United Airlines has agreed to a $6 million settlement with Reserve component service members who said the company was underpaying pension benefits to employees who mobilized for duty in the National Guard and reserves.

The deal announced Tuesday is one of the largest class-action settlements in the history of the 1994 federal law that prohibits civilian employers from discriminating against reservists who are mobilized, known as the Uniformed Services Employment and Reemployment Rights Act, or USERRA.

United Airlines will pay several thousand dollars each to about 1,160 reservists, most of them pilots, who were called up for active-duty service for more than 30 days between 2000 and 2010 while working for the airline.

At issue was United’s contributions to the employees’ 401(k) pension accounts. Under USERRA, companies must continue to provide routine contributions to retirement accounts during reservists’ military service.

United Airlines was providing mobilized reservists with pension contributions that were too small, calculating the amount based on a minimum wage for union employees rather than the individual employees’ actual salaries or wages immediately prior to deployment, according to a lawsuit filed by the employees.

“This settlement sends a strong message that veterans will band together and take collective action when their rights are violated or denied by their employer,” said Peter Romer-Friedman, an attorney who represented the reservists, with the Washington-based law firm Cohen Milstein Sellers Toll.

In a prepared statement to Military Times, United Airlines spokesman Christen David said, “Veterans are an important part of our workforce and we thank them for their service. We’re committed to making this right and ensuring that United’s contributions to veteran employees’ retirement plans meet the spirit of USERRA.”

The settlement highlights concerns inside the Pentagon as the number of Reserve mobilizations soared at the height of the Iraq and Afghanistan wars. Military officials had feared that private-sector employers would get fed up with reservists getting called up for duty and abruptly leaving their civilian jobs.

But according to an internal Pentagon survey of more than 10,000 employers that was released last year, most companies do not have major concerns about hiring reservists and making the special accommodations required for part-time troops to fulfill their military responsibilities.

The survey found that most employers say the absence of reservists from the workplace for training and mobilizations had only a “small or modest” impact on their business operations or no impact at all.

The United Airlines settlement also underscores USERRA’s role in protecting individual reservists.

“It’s absolutely essential to have a strong re-employment rights law to make sure we have people who are willing to serve in the Guard and Reserve,” Romer-Friedman said.

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