Behalf v. Am. Airlines Grp., Inc.

• Decision Date: 18 June 2019
• Docket Number: CIVIL ACTION NO. 18-4040
• Citation: 384 F.Supp.3d 520
• Parties: James P. SCANLAN on his own behalf and all others similarly situated v. AMERICAN AIRLINES GROUP, INC., et al.
• Court: U.S. District Court — Eastern District of Pennsylvania

384 F.Supp.3d 520

James P. SCANLAN on his own behalf and all others similarly situated

v.AMERICAN AIRLINES GROUP, INC., et al.

CIVIL ACTION NO. 18-4040

United States District Court, E.D. Pennsylvania.

Filed June 18, 2019

Adam Harrison Garner, The Garner Firm Ltd., Philadelphia, PA, Colin M. Downes, R. Joseph Barton, Block & Leviton LLP, Hannah Cole-Chu, Peter Romer-Friedman, Outten & Golden LLP, Washington, DC, Matthew Zachary Crotty, Crotty & Son Law Firm, PLLC, Thomas G. Jarrard, Spokane, WA, for Plaintiff.

Anton Metlitsky, Mark W. Robertson, O'Melveny & Myers LLP, New York, NY, M. Tristan Morales, O'Melveny & Myers LLP, Washington, DC, Kenneth A. Murphy, Drinker Biddle & Reath LLP, Philadelphia, PA, for Defendant.

MEMORANDUM

Bartle, J. Plaintiff James P. Scanlan, a commercial airline pilot and a Major General in the United States Air Force Reserve, has sued American Airlines Group, Inc. ("AAG") and American Airlines, Inc. ("AAI"), his employer and AAG's wholly owned subsidiary, in this putative class action under the Uniformed Services Employment and Reemployment Rights Act ("USERRA") 38 U.S.C. §§ 4301 et seq. Specifically, the amended complaint alleges that he and others similarly situated have been wrongfully denied certain rights and benefits from AAG and AAI while on short-term military leave which other employees receive while absent from work for jury duty, sick leave, and union leave. Scanlan seeks declaratory, injunctive, and monetary relief. Before the court is the motion of defendants to dismiss the amended complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

I

When considering a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court must accept as true all factual allegations in the complaint and draw all reasonable inferences in the light most favorable to the plaintiff. See Phillips v. Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) ; Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59, 64 (3d Cir. 2008). We must then determine whether the pleading at issue "contain[s] sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim must do more than raise a "mere possibility of misconduct." Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009) (quoting Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 ).

On a motion to dismiss under Rule 12(b)(6), the court may consider "allegations contained in the complaint, exhibits attached to the complaint, and matters of public record" as well as "an undisputedly authoritative document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document." Levins v. Healthcare Revenue Recovery Grp. LLC, 902 F.3d 274, 279–80 (3d Cir. 2018) (quoting Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) ).

II

For present purposes, we accept as true the allegations set forth in the amended complaint and the undisputed documents it references and relies upon. Scanlan has worked as a pilot for AAI since October 1999 and participated in the AAG's Global Profit Sharing Plan (the "Plan") in 2016 and 2017. He has also served in the armed forces since 1985 and is currently a Major General in the United States Air Force Reserve. Throughout his employment with AAI and while he has participated in the Plan, Scanlan has taken short-term periods of leave to perform his Air Force Reserve obligations. While he was on military leave for a total of 128 days in 2016 and for 132 days in 2017, most of the periods of leave were for only a few days at a time although some extended up to fourteen days.

AAI does not pay employees who are out on short-term military leave but does pay employees when they take other forms of short-term leave, such as jury duty, sick leave, and union leave. If employees are on jury duty, they receive the differential between their regular compensation and their payment as jurors. They obtain their full pay when on short-term sick leave or union leave. Union leave may be short-term but up to three pilots will be paid while serving full time on union business.

AAG is the parent company not only of AAI, but also of Envoy Airlines, Inc., Piedmont Airlines, Inc, and PSA Airlines. AAG adopted the Plan effective January 1, 2016 to share AAG's profits with employees of AAI and other subsidiary airlines. Employees who are eligible to participate in the Plan include pilots, flight attendants, mechanics, and passenger service employees as well as non-union-represented management and non-management employees.

AAG is obligated under the Plan to pay profit sharing awards annually in the early part of each year to the Plan's participants that total five percent of AAG's pre-tax earnings for the preceding year. Participants receive their award as a lump sum cash payment subject to any withholding for tax purposes and may contribute all or part of the award to their retirement plans, pursuant to the terms of those plans. AAG calculates each participant's individual award by dividing the five percent of AAG's pre-tax earnings by the aggregate amount of all participants' earnings and multiplying this value by that participant's "eligible earnings."

AAG does not credit AAI employees under the Plan with wages they would have otherwise earned had they not been on short-term military leave. However, it does include the compensation of employees for the periods when they are on jury duty, sick leave, and union leave. As a result of AAG's failure to include as eligible earnings their imputed income while on periods of short-term military leave, Scanlan and other similarly situated employees received lower profit sharing awards in 2016 and 2017 than they would have otherwise received.

III

USERRA is the latest in a series of laws, such as the Vietnam Era Veterans' Readjustment Assistance Act ("VEVRAA"), and its amendment the Veterans' Reemployment Rights Act of 1974 ("VRRA"), that Congress has enacted to protect the rights of military service members who take leaves of absence from their employers to perform military service. Crews v. City of Mt. Vernon, 567 F.3d 860, 864 (7th Cir. 2009) ; Rogers v. City of San Antonio, 392 F.3d 758, 762 (5th Cir. 2004). In enacting USERRA, Congress emphasized its continuity with the VRRA and with the body of caselaw that had developed under USERRA's predecessor statutes. United States v. Alabama Dept. of Mental Health and Mental Retardation, 673 F.3d 1320, 1329 n.6 (11th Cir. 2012) ; Crews, 567 F.3d at 864 ).

Congress stated in the first section of USERRA that its purposes, among others, are "to encourage noncareer service in the uniformed services by eliminating or minimizing the disadvantages to civilian careers and employment which can result from such service" and "to prohibit discrimination against persons because of their service in the uniformed services." 38 U.S.C. §§ 4301(a)(1) and (a)(3) ; see also Carroll v. Delaware River Port Auth., 843 F.3d 129, 131 (3d Cir. 2016). As our Court of Appeals has explained, "we must construe USERRA's provisions liberally, in favor of the service member." Gordon v. Wawa, 388 F.3d 78, 81 (3d Cir. 2004). Likewise, the Supreme Court has recognized a rule of construction that "interpretative doubt is to be resolved in the veteran's favor." Brown v. Gardner, 513 U.S. 115, 118, 115 S.Ct. 552, 130 L.Ed.2d 462 (1994).

We first consider AAI's motion to dismiss count III for failure to state a claim. Scanlan alleges that AAI's policy of not paying employees out on short-term military leave while paying employees for comparable forms of short-term leave, such as for jury duty, sick leave, and union leave, violates § 4316(b)(1) of USERRA.

This section of USERRA provides, in relevant part:

(b)(1) ... a person who is absent from a position of employment by reason of service in the uniformed services shall be--

(A) deemed to be on furlough or leave of absence while performing such service; and

(B) entitled to such other rights and benefits not determined by seniority as are generally provided by the employer of the person to employees having similar seniority, status, and pay who are on furlough or leave of absence under a contract, agreement, policy, practice, or plan in effect at the commencement of such service or established while such person performs such service.

38 U.S.C. § 4316(b)(1) (emphasis added).

Section 4303 defines "rights and benefits" as follows:

(2) ... "rights and benefits" means terms, conditions, or privileges of employment, including any advantage, profit, privilege, gain, status, account, or interest (including wages or salary for work performed) that accrues by reason of an employment contract or agreement or an employer policy, plan, or practice and includes rights and benefits under a pension plan, a health plan, an employee stock ownership plan, insurance coverage and awards, bonuses, severance pay, supplemental unemployment benefits, vacations, and the opportunity to select work hours or location of employment.

38 U.S.C. § 4303.

AAI, at the pleading stage, does not contest Scanlan's allegations that it pays its employees on jury duty, sick leave, and union leave, and does not pay those on short-term military leave. Nor does AAI at this time challenge Scanlan's assertion in the amended complaint that short-term military leave is comparable to absence from work for jury duty, sick leave or union leave. See Brill v. AK Steel Corp., No. 2:09-CV-534, 2012 WL 893902, at *3-7 (S.D. Ohio Mar. 14, 2012). AAI simply argues that USERRA does not require employers to pay its employees wages for periods when they are on military leave. Ordinary wages for work not performed while on military leave, AAI...