A group of ex-United Airlines employees have brought a lawsuit against the Chicago-based carrier because they believe United should have offered them incentives from an early out package that was offered during the pandemic even though they had already retired.
The lawsuit, which has been filed in the U.S. District Court for Central California in Los Angeles, has been brought by six long-serving United Airlines employees with the hope of extending it into a class-action suit that could apply to hundreds more recently retired workers.
The case is built around a promise that former United chief executive Oscar Munoz made to employees in August 2017 in which he vowed to offer the same benefits and incentives from an early out package to any employee who retired within 36 months of a program being implemented.
At the time, United was growing and had no need for early out packages but Munoz added the clause to the airline’s retirement policy so that veteran employees could have greater confidence in their decision to retire.
Employees subsequently retired knowing that if a better offer came along in the form of an early out package within three years of them leaving United, that they would still reap those benefits.
But when the pandemic struck, the clause in United’s retirement policy hamstrung the airline’s ability to lower its costs by offering an early out package to long-serving and better-paid employees, the lawsuit alleges.
On January 1, 2021, United terminated its retiree early out participation policy and by the end of the same month, the airline opened a voluntary separation of leave program (VSL). To qualify, employees must have worked for United for at least 15 years and be at least 45 years old.
There were two options available, both of which offered a cash payment and flight benefits through the end of 2026. One option offered a $125,000 medical expenses contribution, while the other offered a larger cash payment.
The ex-employees who are bringing the case against United believe the VSL “falls squarely” within the retirement policy established by Munoz in 2017. United, however, argues the VSL isn’t an early out program.
Victoria Fellows started her airline career with Continental Airlines in 1989 and carried on working for United when Continental was taken over. She hurt her knee closing an aircraft door in 2019 and had to go on long-term sick before eventually deciding to retire early in late 2020.
She says she would have delayed her retirement if she had known the VSL was about to be announced.
Meanwhile, Bernhard Ornellas began working for Continental in 1977 at the age of 19 and worked up to the start of the pandemic but then decided to take unused sick leave for a seven-month absence from the airline. He returned to work in late 2020 but decided it was safer if he retired as there was a spike in COVID-19 cases at the time.
He left United in early 2021 but at no point did anyone from United let him know that the VSL program was about to be offered.
United has declined to comment on the case as the litigation is still ongoing. Other airlines that offered early-out packages at the height of the pandemic have been racing to hire new staff after travel demand bounced back much quicker than expected.
On Wednesday, Southwest Airlines said its ability to find new employees was hindering its business plan.
The case has been filed under reference: 2:21-cv-09432
