United Airlines violated $5B coronavirus aid agreement: Lawsuit
Airline allegedly requiring employees to take off 20 unpaid workdays
A Chicago-based United Airlines worker has accused the company of violating the terms of its $5 billion federal paycheck aid by requiring employees to take off 20 unpaid workdays, a new class-action lawsuit alleges.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UAL | UNITED AIRLINES HOLDINGS INC. | 94.40 | -0.23 | -0.24% |
Kenneth England, a shift manager who works out of O’Hare International Airport, claims in the lawsuit that just two weeks after United agreed to the terms of the funding agreement, the airline told management and administration employees, or “M&A employees,” that “Effective between May 16 and September 30, domestic M&A employees will be required to take 20 unpaid days off,” according to a copy of the complaint that was shared online by Law360.
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United announced on April 15 it had received $5 billion in paycheck support relief from the federal government, with spokesperson Frank Benenati saying in a statement that the funds would “cover a portion of our pay and benefits costs through September 30.”
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The government aid includes a mix of cash and loans, with the government getting warrants that can be converted into small ownership stakes in the leading airlines. The $5 billion grant was a portion of the $25 billion in government aid that went to the nation’s biggest airlines and was meant to pay workers and avoid massive layoffs in the industry.
England, a non-union employee, filed the lawsuit through attorneys on Wednesday and has requested that it be given class-action classification.
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He accuses United of breaching the agreement with the government that stated it “would not require any employee to take a temporary suspension or unpaid leave for any reason, it would not reduce the pay rate of any employee earning a salary or wages, and it would not reduce the benefits of any employee, until September 30, 2020.”
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A United Airlines spokesperson called the lawsuit “without merit” and said the company has continued to employ 100 percent of its workforce.
“Already, tens of thousands of United employees… have voluntarily agreed to unpaid leave because they want to help the company survive the crisis,” the spokesperson said in an emailed statement. “This action is the latest proactive, cost-cutting measure we have taken to offset an unprecedented drop in travel demand and will help us to achieve our overall goal to preserve as much financial flexibility now so we can not only survive this crisis, but thrive once it is behind us.”
The Associated Press contributed to this report.