Class Action Says American Airlines Union Workers are Owed $32.5M in Stock

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An Oklahoma man who used to work for American Airlines Inc. filed a class action lawsuit against the Transport Workers Union of America in a Texas federal court Thursday, alleging that the workers union excluded some members from receiving equity they were owed under the collective bargaining agreement between American Airlines and the union. The class action lawsuit claims that union workers who retired early are owed $32.5 million in American stock.

American Airlines is not listed as a defendant in the class action lawsuit.

Plaintiff Thomas Powell was an employee of American Airlines and a member of the Transport Workers Union in 2012 when modifications were made to the collective bargaining agreement between the two entities due to the bankruptcy that began in 2011, resulting in the merger of American Airlines with U.S. Airways.

The agreement was modified to say that there would be a reduction in the workforce, and that when the bankruptcy was over the employees who decided to take the “early separation” would be given an “award of equity” when the bankruptcy was over. This agreement was struck to prevent workers from having to take involuntary furloughs by opting for “early separations.”

Powell was among those who decided to go for the early separation, but he and others were told after they took their buyouts that they were not eligible for the equity after the early separation was done.

“It was not until August 2013 that the [union] informed the persons who took Early Separation that Defendants had decided to deny plaintiff and the proposed class their previously-vested rights to the TWU Equity,” the class action lawsuit states.

The plaintiff argues that the union is discriminating against those who stepped down early, while they helped build the union’s equity “by participating in the projected labor cost savings to New American.” Their decision to opt for the early separation also benefited the union and its workers by making it possible for the bankruptcy to occur without having to implement involuntary furloughs.

According to the class action lawsuit, the two programs were created simultaneously and interdependent but the union, along with the 15 local chapters named in the class action, implemented them separately even though “there was no rational, fair, or non-discriminatory reason” to do so.

Powell alleges the union enticed workers to take the early separation in a rush beginning in September 2012 even though it had not yet implemented the equity program.

“There was no stated reason for such a headlong rush, and in fact many enrollees continued to work long after this enrollment period,” the class action lawsuit claims, which is seeking to cover about 2,000 Transport Workers Union members who enrolled in the early separation program.

But, the union did not “advise TWU members about whether early separation might adversely affect their receipt of the vested TWU equity,” even though those who went this route asked if it would, the class action lawsuit explains. According to the class action, the union “refused to provide any information or guidance at all.”

Powell argues that the union “should have . . . delayed implementation of early separation, so that TWU members could have been fully informed.” For this reason, “even American Airlines put the [early separation program] on hold until well into 2013.”

The plaintiff charges that the union, through a committee that was formed to distribute the equity, “secretly decided to exclude the proposed class from the TWU equity, keeping the secret until the class had already enrolled in early separation.”

When the TWU International President James Little got word of what was going on, he sent “an open letter to ‘All AA Presidents and Board,'” objecting to what the committee decided, especially since he was the one who had negotiated the terms of the modifications to the collective bargaining agreement.

“Since I negotiated the equity and the 1.7% ‘Me Too’ which I consider a major plus for the members, I strongly recommend that it should be divided up equally to all those that ratified and accepted an early severance then or at a later date,” Little wrote. “I am disappointed that a decision was made to cut out from the 1.7% those who are probably senior members that have made life decisions, and were TWU members through some of the darkest times.”

This class action lawsuit is for all TWU members who opted for early separation from American starting on Nov. 29, 2011 until July 26, 2013.

The Oklahoma man is charging the union and its 15 local chapters with breach of the duty of fair representation and for injunctive relief.

The plaintiffs are represented by Keith R. Verges and Ryan K. McComber of Figari & Davenport LLP.

The Transport Workers Union Class Action Lawsuit is Thomas A. Powell v. Transport Workers Union of America, AFL-CIO et al., Case No. 3:14-cv-00375, in the U.S. District Court for the Northern District of Texas.