Southwest Inks $19M Deal To End Pilots' Military Leave Suit
Southwest Airlines Co. has agreed to make nearly $6 million in retirement payments and provide sick leave potentially worth north of $13 million to end a California federal suit alleging it denied benefits for brief spurts of military service to a proposed class of as many as 2,000 pilots.
The deal, described in a motion for settlement approval and conditional class certification filed Thursday, will end allegations Southwest violated the Uniformed Services Employment and Reemployment Rights Act by not letting pilots accrue sick leave while on short-term military leave, or STML, and by not disclosing to workers the extent of their benefits under a 401(k) matching program. USERRA bars employment discrimination against military service members and veterans.
The deal includes a $5.8 million settlement fund aimed at making workers whole for unpaid retirement contributions and makes Southwest provide workers the sick leave they should have accrued for time spent on STML, which refers to periods of military leave lasting up to two weeks. Workers’ counsel Peter Romer-Friedman of Outten & Golden LLP said the sick leave provision is worth more than $13 million if workers use it. Southwest disputes this valuation, however.
The firm and its co-counsel will ask for up to $1.74 million in attorneys’ fees from the fund plus expenses, according to Thursday’s motion.
“We’re really excited about this,” said Romer-Friedman. “We filed this [suit] last year and Southwest stepped up to the plate right away and in our view has done the right thing to work with us to achieve a positive outcome for everyone.”
The suit, filed in July 2017 by pilot and Air Force Reserve member Jayson Huntsman, said the company violated USERRA by letting pilots accrue sick leave when they took leave for bereavement, union duty and jury duty, but not when they went on STML. The company also violated the law by not telling workers how much they would have earned for purposes of 401(k) matching had they not taken leave. That is, if a pilot earned $150,000 in a given year but would have earned $155,000 had he or she not taken leave, the pilot did not know the company would match up to a certain percentage of the larger figure, according to the settlement motion.
The pilots, whom the motion says number as many as 2,000, will be paid retirement contributions based on how long they spent on STML for each year between 2001 and 2013, when the company started telling workers about their full matching eligibility. They will also be given all the sick leave they should have earned dating back to 2008 and most of the leave they should have earned between 2001 and 2007, according to the motion.
Southwest insists the sick leave portion of the deal is worth far less than the $13 million-plus the workers estimate because they can only use it while sick and can’t cash out unpaid benefits at retirement, according to a declaration from Romer-Friedman accompanying the settlement motion. Many retired pilots will be paid $1,000 in exchange for their sick leave claims, while “a small subset” who have opted to use unpaid sick time to extend their health care coverage through a company policy will be paid in benefits.
Thursday’s motion urges the Northern District of California to approve the deal. The proposed class is valid and the deal is fair, the pilots argue.
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The workers are represented by Peter Romer-Friedman, Jahan Sagafi and Rachel Dempsey of Outten & Golden LLP, Thomas Jarrard of the Law Office of Thomas Jarrard PLLC and Matthew Crotty of Crotty & Son Law Firm PLLC.
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The case is Huntsman v. Southwest Airlines Co., case number 3:17-cv-03972, in the U.S. District Court for the Northern District of California.