United faces lawsuit over M&A employees pay cut

Facing 20 days of unpaid leave and a forced vacation schedule at least one United Airlines employees has turned to the courts for relief. In a US District Court class action complaint filed in the Eastern Division of the Northern District of Illinois Kenneth England is suing the company. He is seeking a reversal of the policies through a court-ordered enforcement of the terms of United’s agreement with the US government under the Payroll Support Program section of the CARES Act.

Among the claims made in the case:

The Unpaid Time Off Program violates the express terms of United’s assurance that it would not require “one or more Employees to take a temporary suspension or unpaid leave for any reason, including a shut-down or slow-down of business.”

Furthermore, the Unpaid Time Off Program violates the intent of the contracting parties to enter into an agreement to protect United employees, and Congress’s intention to provide financial support for the employees of air carriers.

The Unpaid Time Off Program also violates United’s assurance that salaried employees would not face a pay rate reduction.

Plaintiff Kenneth England is paid on a salary basis by United. If United requires him to take 20 unpaid days, his salary will be reduced.

The lawsuit filed here is similar to one brought by labor unions to reverse the same reduction of hours and associated pay cut announced on 4 May 2020. While the unions successfully negotiated to have the cuts reversed for their members the Management and Administration (M&A) employees are not covered by a collective bargaining agreement and did not see relief from those negotiations.

United’s decision to position the cut as a reduction of hours rather than as cut in pay rate walks a fine line with respect to the CARES Act requirements. That justification would require that the employees be seen as hourly workers rather than salaried. In the filing England notes that his position is a salaried role. And, while United could convert all salaried employees to hourly to effect these cuts that creates potential for significant other issues.

Most notable is that these same employees might pursue a new class action suit, this time seeking back wages for overtime work previously performed. Perhaps the odds of winning are low, but if the company thinks that these employees have always been hourly such that it is permissible under the CARES Act to reduce hours in this manner the claim will almost certainly be filed.

The company must also consider the future ramifications of such a conversion. Converting back would be a very difficult challenge. And as non-exempt, hourly employees there’s a very real chance the M&A staff would seek union representation through a collective bargaining agreement. After all, the company will have just shown a willingness to cut hours without consultation, and the CBAs are much better at protecting against that than a few thousand individuals can muster separately.

PaxEx.Aero understands that employees thus far have been informed their positions are still considered salaried, not hourly.

The case was filed on 13 May 2020 under docket number 1:20-cv-02877. United Airlines has not yet responded to the filing.