MANHATTAN (CN) — Giving former employees of World Airways another chance for liftoff, the Second Circuit ruled Tuesday that it is not too late for them to sue the Teamsters union over its handling of the now-defunct airline’s pension plan.
After nearly 66 years in business, World Airways ceased operations in 2014 on the heels of two bankruptcies. The airline’s shuttering led to 325 layoffs, including those of 109 pilots and 146 flight attendants.
Dozens of them, led by New Jersey-based flight attendant Janet Pruter, brought a 2015 federal complaint against the Local 210 of their Teamsters union, alleging fraud, breach of contract and violation of their employee benefit plan.
Recalling assurances by the union’s Pension Trust Fund that they would receive would receive 100 percent of their service credit before World Airways began to make contributions, the workers said this guidance was they only reason they agreed to ratify a collective bargaining agreement.
When the airline had been undergoing financial difficulties, however, the trustees voted in December 2012 to cancel the workers’ past service credits.
Pruter’s 18-page lawsuit accused the local and the fund of reneging on the promise, but U.S. District Judge Analisa Torres dismissed the case as untimely last year.
Reversing Tuesday, the Second Circuit disagreed with Torres that the case is controlled by the six-month statute of limitations under the National Labor Relations Act.
“Since the claims at issue here do not touch on the relationship between an employer and the union, but instead touch on the relationship between the employee and the union, the longer limitations period in ERISA is the appropriate period to borrow,” U.S. Circuit Judge Rosemary Pooler wrote for a three-judge panel, abbreviating the Employee Retirement Income Securities Act.
ERISA gives workers three years to file an action.
Arthur Schwartz, with Advocates for Justice, Chartered Attorneys, applauded the ruling.
“My clients, who have all become unemployed because of the closure of World Airways, are very happy with this ruling,” said Schwartz who is also a Democratic district leader in New York City’s Greenwich Village.
“The local promised that if World didn’t pay the sum due, that it would,” Schwartz added in an email. “This never occurred, and the result was employees losing half to two-thirds of their pension benefit. We are confidant that the District Court will make Local 210 either make the necessary payments into the pension fund (which survived the World closure) or make substitute payments to its former members itself.”