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United Airlines Promises to Retirees About Early-Out Programs Class Action

During business downturns, some companies have offered employees special arrangements for early retirements. This class action brings suit against United Airlines, Inc. in regard to its Voluntary Separation Leave (VSL) Program. The complaint alleges that the company gave employees certain assurances about early retirements and then did not keep its promises. It claims that United has violated the Employee Retirement Income Security Act (ERISA).

The class for this action is all employees of United who retired from the company within 36 months prior to January 21, 2021, who were at least 45 years old, and who had at least 15 years of service with United at the time of their retirement.

United had previously offered “early out” retirement programs in 2008 and 2014. These involved the payment of significant sums of cash, travel benefits, and COBRA or retiree medical benefits for those who were eligible.

In August 2017, CEO Oscar Munoz recognized that employees who were nearing retirement were wondering when the next early-out plan might be offered. They were hesitant to retire, because they were afraid they’d miss the benefits offered by such programs. Munoz, the complaint says, “promised that a new clause would be added to the United retirement policy stating that if an early out program was offered within 36 months after retirement, the retired employee would be allowed to participate in the program.”

Because of the Covid-19 pandemic and resulting drops in its business, United planned to cut approximately 30% of its management and administrative workers, effective October 1, 2020. It also planned to announce a voluntary separation package. The October 1 date was presumably because United had received funds under the CARES Act the prohibited it from reducing its workforce by more than 10% below its March 24, 2020 level until September 30.

However, changes were involved. As of October 1, 2020, United would not offer laid-off, white-collar workers cash severance packages. On October 30, it announced that it would no longer allow retired workers the 36-month lookback to participate in early out programs. The official termination date was January 1, 2021.

On January 21, 2021, United offered another early-out program. It offered two different packages to workers who were members of the International Association of Machinists, were at least 45 years old, and had at least 15 years of service. The application window closed on February 25, 2021. As to eligibility for retirees with 36-month lookback arrangements, United denied that this was an early-out program, because it did not provide cash at separation.

The plaintiffs are a group of retirees who retired with the 36-month lookback assurances but who were not deemed eligible for the January 21 program. They were not even informed of it, and one had retired just a few weeks before that date.

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

United Airlines Promises to Retirees About Early-Out Programs Complaint

December 6, 2021

During business downturns, some companies have offered employees special arrangements for early retirements. This class action brings suit against United Airlines, Inc. in regard to its Voluntary Separation Leave (VSL) Program. The complaint alleges that the company gave employees certain assurances about early retirements and then did not keep its promises. It claims that United has violated the Employee Retirement Income Security Act (ERISA).

United Airlines Promises to Retirees About Early-Out Programs Complaint

Case Event History

United Airlines Promises to Retirees About Early-Out Programs Complaint

December 6, 2021

During business downturns, some companies have offered employees special arrangements for early retirements. This class action brings suit against United Airlines, Inc. in regard to its Voluntary Separation Leave (VSL) Program. The complaint alleges that the company gave employees certain assurances about early retirements and then did not keep its promises. It claims that United has violated the Employee Retirement Income Security Act (ERISA).

United Airlines Promises to Retirees About Early-Out Programs Complaint
Tags: Changes to Retirement Terms, ERISA Violations, Early Retirement Programs, Employment Violations