(CN) - A union representing U.S. Airways pilots did not breach its duty to represent them fairly when it cut the pensions of retired or soon-to-be retired pilots as it struggled to stay afloat after the 2001 terrorist attacks, the 2nd Circuit ruled.
More than 100 pilots over or approaching 60, the mandatory retirement age, were unhappy with how the Air Line Pilots Association International represented them in negotiations with the airline, which experienced serious financial difficulties after the Sept. 11 terrorist attacks.
The pilots accused the union of agreeing to too many concessions and allowing U.S. Airways to terminate their pension plan and replace it with a new one without any vote. After the airline filed for Chapter 11 bankruptcy protection a second time, in September 2004, the union agreed to further concessions that hit retiring pilots the hardest, they claimed.
They sued the union for, among other things, breaching their duty to represent them fairly and failing to conduct an audit to assess the financial health of their original pension plan. They also accused the union of agreeing to terminate that plan so that it could collect lucrative fees for managing the follow-up plan.
The district court dismissed the claims, and the Manhattan-based 2nd Circuit affirmed.
Given the tough financial circumstances, the court said, the union's actions were negligent at worst.
Judge Rosemary Pooler said the pilots "failed to plead a causal connection" between their claims and their injuries.
"In short, plaintiffs have failed to plausibly allege that [the union's] alleged bad faith affected the outcome of the negotiations in any way," Pooler wrote.
"The fact that older pilots may have received fewer benefits under the plan is, as the district court explained ... 'the result of basic economics, specifically the time value of money, and is not related to the older pilots' age.'"
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