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United Airlines agrees to $6.15 million settlement with pilots

By Kyla Asbury | May 29, 2014

DENVER (Legal Newsline) - A $6.15 million settlement has been approved in a lawsuit against United Airlines between it and more than 1,100 airline pilots who claimed the airline violated the Uniformed Services Employment and Reemployment Rights Act.

James Daniel Tuten filed the lawsuit in 2012, on behalf of current and former United Airlines pilots for whom United allegedly failed to make the full pension contributions required by federal law for periods in which pilots took military leave to serve in the United States Armed Forces between 2000 and 2010.

On May 20, U.S. District Judge William J. Martinez of Colorado issued a final judgment, granting the motion for final approval of settlement and approving the settlement agreement fully.

Class counsel's unopposed motion for an award of attorneys' fees and reimbursement of expenses in the amount of 24.7 percent, or $1,519,050 and $249,230.60 according to the settlement document.

Tuten was awarded $15,000 as the service award for being class representative.

"The settlement...requires United to create a settlement fund of $6.15 million dollars, which will be allocated amongst the class members pursuant to an agreed upon damages methodology which relies on the employment data provided by United as to each class member," the order granting the motion for final approval of settlement agreement filed May 19 states.

The settlement creates a dispute process, whereby a class member can challenge this employment data to dispute the amount owed, according to the order.

"After each class member's eligibility is determined, payments will be made, to the extent possible, into the class members' pension accounts in order to preserve favorable tax treatment," the order states. "Class counsel estimates that each class member will ultimately receive a payment equal or greater than the amount of the underpayment into each class member's pension account."

The settlement also provides non-monetary relief to the class and future United pilots, according to the order.

"United agrees to change its method for calculating a pilot's defined pension contribution during periods of long-term military leave," the order states. "United also agrees to, for the first time, maintain a written policy setting forth its method of calculation. Finally, the settlement improves communication between United and its pilots, both in advance of military leave and after the pilot returns from military leave."

The settlement resolves a 2012 complaint that claimed from 2000 to 2010, United failed to provide its pilots with the correct pension contributions that federal law requires employers to make for employees who take military leave.

United had calculated pilots' pension contributions based on compensation associated with the minimum monthly wage that pilots receive, but Tuten claimed that federal law required United to make pension contributions based on each pilot's average compensation in the 12-month period before a period of military service.

United's policy violated USERRA's pension provision that requires employers to make pension contributions "on the basis of the employee's average rate of compensation during the 12-month period immediately preceding" military leave, when an employee's average wage rate "is not reasonably certain."

Tuten claimed by maintaining and implementing this policy from April 2000 through November 2010, United violated the USERRA rights of those current and former pilots who were participants in the United Airlines Pilots' Directed Account Retirement Income Plan.

"As a result of such violations, United failed to contribute the correct amount of contributions to the accounts of pilots who took military leave from 2000 to November 2010," the complaint stated.

Tuten and the class members were represented by R. Joseph Barton and Peter Romer-Friedman of Cohen Milstein Sellers & Toll PLLC; Thomas G. Jarrard of the Law Office of Thomas G. Jarrard PLLC; Matthew Z. Crotty of Crotty & Son PLLC; and Robert W. Mitchell.

United Airlines was represented by Brian W. Barrett and Seyfarth Shaw; and Maureen Witt of Holland & Hart.

U.S. District Court for the District of Colorado case number: 1:12-cv-01561

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.

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