Judge Affirms Ruling For United's Pension Plan Termination

July 25, 2005 (PLANSPONSOR.com) - Judge Samuel Der-Yeghiayan of the US District Court for the Northern District of Illinois affirmed a bankruptcy court's previous ruling that approved the Pension Benefit Guaranty Corporation's (PBGC) termination of United Airlines' pension plan for flight attendants.

The Association of Flight Attendants (AFA) challenged the bankruptcy court’s approval, saying United modified the terms of its collective bargaining agreement by entering into the agreement with the PBGC, according to a BNA report.   Der-Yeghiayan said the union made general complaints of unfairness and was unable to demonstrate any actual violations of the law by United or any violations of any portion of the collective bargaining agreement.

The judge affirmed the PBGC’s authority to terminate the plans, writing in his opinion, “The facts clearly show, as the bankruptcy judge concluded, that PBGC has authority provided to it by Congress to involuntarily terminate the pension plans if it sees fit despite AFA’s objections.”

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A spokeswoman for AFA told BNA the union would ask for expedited consideration of its appeal of Der-Yeghiayan’s decision before the US 7 th Circuit Court of Appeals.

Both AFA and United accuse the other of not being willing to hash out an alternative to the pension problem.   While United wants to agree on a defined contribution replacement plan for the pension plan, the union says the termination of its pension plan is not acceptable.

In April, the PBGC agreed to takeover four of United’s pension plans with a total deficit of $9.8 billion.   The UA Flight Attendant Defined Benefit Pension Plan, which covers 28,600 participants was included in the agreement (See  United, PBGC Hammer Out Plan Takeover Pact ).   The plan has $1.4 billion in assets to pay $3.3 billion in promised benefits.  

Appeals Court Affirms Decision For Alaska Airlines In FMLA Case

July 22, 2005 (PLANSPONSOR.com) - The US 9th Circuit Court of Appeals has upheld a district court's decision that an employee's absence to make a trip across the country to retrieve a family vehicle was not a protected absence under the Family Medical Leave Act (FMLA).

According to the  court opinion , H. Charles Tellis requested two weeks off work from his employer, Alaska Airlines, to care for his wife who was having difficulties with her pregnancy.   His supervisor told him to obtain forms from the company’s Health Benefits office for FMLA leave.   Tellis did not show up for work on July 4, 2000, but instead left a form requesting leave for July 5 through 7.

He called the Health Benefits office on July 5 to request specific forms for FMLA leave.   When his vehicle broke down on July 6, he decided to fly to Atlanta to obtain another vehicle he owned and drive it back to his home in Washington state.   During the return trip home, he called his wife numerous times on his cell phone.   Tellis argued to the court that the trip to retrieve the vehicle and the phone calls to his wife provided psychological comfort and reassurance to his wife as specified in the FMLA.

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When Tellis did not show up for work on July 11, the airline tried to contact him without success.   On July 18 it terminated him for his unexcused absences.   Tellis and his union filed a grievance over the termination and the airline agreed to reinstate him if he agreed to the placement of a disciplinary letter in his employee file for one year.   According to the opinion, Tellis refused the offer.

He filed a lawsuit against the airline with the US District Court for the Western District of Washington.   The district court ruled in favor of Alaska Airlines, and Tellis appealed the decision.

Senior Circuit Judge David Thompson, noted in the appeals ruling that Tellis’ acts did not meet the requirements for actual care in the FMLA.   In his opinion he said, “Having a working vehicle may have provided psychological reassurance; however, that was merely an indirect benefit of an otherwise unprotected activity – traveling away from the person needing care.”

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