Judge tosses suit saying pilots got sham divo
 

The Associated Press: Judge tosses suit saying pilots got sham divorces

Judge tosses suit saying pilots got sham divorces

By HARRY R. WEBER (AP) – 32 minutes ago

ATLANTA — A federal judge Monday tossed out a Continental Airlines Inc. lawsuit accusing nine pilots of getting sham divorces so their ex-spouses could collect the pilots' retirement benefits while they kept flying.

U.S. District Judge Gray Miller said he can't condone the pilots' alleged actions. But he ruled that the law doesn't allow Continental's pension administrator to consider the employees' motivation for getting divorced in deciding whether to distribute benefits.

Miller granted the pilots' motion to dismiss.

There was no immediate response from a spokeswoman for Houston-based Continental, which said it paid out between $10 million and $11 million in suspicious pension distributions. Some individual payments were as much as $900,000, according to court papers.

The airline said some of the pilots concealed the divorces from children and friends, then remarried their spouses after getting the money.

The pilots in question all obtained divorces from various states with domestic relations orders that assigned 100 percent, and in one case 90 percent, of their retirement benefits under the plan to their spouses. The retirement plan qualified the domestic relations orders and, because the pilots were of retirement age when the alternate payees requested a lump-sum payout, the plan paid the benefits.

Miller said "the facts show — and the pilots do not seem to contest — that the pilots and their former spouses did not behave in a manner consistent with the breakup of a marriage." He said many of the pilots continued to cohabitate, remarried soon after obtaining the lump-sum payout and all essentially conducted themselves as if the divorce had never happened.

But the judge said none of that was relevant to the issue at hand.

He said "the administrator may not refuse to qualify a domestic relations order based on criteria not present in the statute." The judge added that "the court finds that the motivation or good faith of the divorce and resulting domestic relations order is not an enumerated requirement."

As of the time the suit was filed, eight of the pilots had been fired or quit. One was rehired after he promised to pay back the retirement money, the airline said — although he too was named as a defendant after failing to repay. The spouses were also named as defendants.

The airline and the committee that runs its pilots' retirement plan filed the lawsuit in federal court in Houston.

Continental asked the court to order the pilots to return the money and to declare that the company was not violating anti-discrimination laws in firing the pilots.

Continental charged that the pilots — seven men and two women — tried to take advantage of a loophole in a major federal pension law that in cases of divorce allows payment of benefits before the worker retires.

Several airlines have terminated pension plans and turned them over to the federal Pension Benefit Guaranty Corp., and the Continental pilots might have feared the same thing could happen at their carrier.

Continental said it began receiving "a significant number" of requests for lump-sum pension payouts to ex-spouses of working pilots beginning in late 2005, and by mid-2007 the airline learned that the couples usually remarried after getting the money.

Other pilots besides the nine named in the lawsuit apparently tried the same ploy, according to the lawsuit. In some cases, the company stopped payments before they were made.

Copyright © 2009 The Associated Press. All rights reserved.

Well I'll be a monkey's uncle.

Bravo and kudos to the Judge for a proper decision!!! For once a law enacted (QDRO OF 1984) actaully worked in favor of the participant to protect him/herself in the event of an untimely termination of a retirement benefit.

I'm willing to bet CAL will use this to explain why they can't support the retirement fund any longer. "Well if your pilot friends didn't take advantage of poor little us we would have done it, but oh well."

For all the scheduling and contractual loopholes that the company always seems to find, I'm happy to see CAL management finally see how it feels.

Unethical... yup, I'm not gonna debate that.

Deserving to an absolutely ruthless and unethical bunch of penny pinching lawyers who run CAL... YOU BET!:)

I imagine there is going to be some discussions after the kids are put to bed.:eek:

At least at couple Delta guys were fired for the same thing. I wonder if this will get them their jobs back. Sure are gonna be some quiet cockpits with people that fly with them...

Are you saying that you wouldn't talk to them if they got their job back? Pathetic if that's the case.

This makes me proud, after all the crap CAL’s forced down their pilots throats, this simple win warms my heart. Finally someone was able to fight back and win using Mgmnt’s own game plan of finding loopholes and exploiting them.

I don't care- I never had a pension. I remember hearing that it really ticked off a number of guys that "did the right thing."

I like it.:D

CAL's response:
CO’s lawsuit against nine pilots is still pending despite court's dismissal of some claims

U.S. District Judge Gray Miller dismissed some claims asserted by CO and the pilot pension plan against former CO pilots accused of getting sham divorces so they and their spouses or ex-spouses could have access to the pilots’ retirement benefits while the pilots continued flying. The lawsuit is still pending, and Continental intends to vigorously litigate the remaining claims.

The court acknowledged that the pilots at issue did not act in a manner consistent with the breakup of a marriage, but Miller said that the plain language of the statute at issue does not allow CO’s pension administrator to consider the employees’ motivation for getting divorced when deciding whether to “qualify” a domestic relations order issued by a family court and distribute pension benefits.

CO issued the following statement Monday in response to Judge Miller’s decision:

“While we are disappointed by this ruling based on a technical reading of the ERISA statute, we are heartened the court recognized that the facts show––and the pilots do not seem to contest––the pilots and their former spouses did not behave in a manner consistent with the breakup of a marriage.

“This ruling did not address the propriety of Continental’s termination of the pilots’ employment. Continental and the plan administrative committee still believe that the domestic relations orders were improper and to the detriment of plan beneficiaries as a whole. Continental is evaluating its appeal options.”

Just because you don't go to prison doesn't mean you get your job back. ?

You've got a good point. :) I shall bow out of this topic and leave it to the pros.

What were the reasons given for firing them?

Isn't there something in the ATP standards about "moral standards" or something to that effect?

Ha! Then where would chief pilots come from?

Sorry, but once again a judge determines that crime does pay. What these shysters did was wrong. That so many see screwing fellow employees is quite okay because "management does it" is pathetic in my book. These were a greedy bunch of pilots who wanted to "get mine first", and THOUGHT they found a way to do it without raising any suspicion. Unfortunately, 7 or 8 pilots who are friends all getting a divorce and remarried at the same time seems a bit "fishy" to me, especially when they all grab money and do the EXACT SAME THING. If so many here think this is okay, then your moral compasses are way off. What these guys did was wrong, and for so many to condone it at the expense of fellow employees is sad in my book. Sorry, these guys are just as bad as scabs in my book. Their sorry butts need to be in jail. Personally I'd like to see the IRS go after them with a vengeance.

Quote:

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Originally Posted by ewrbasedpilot (Post 697126)

Sorry, but once again a judge determines that crime does pay. What these shysters did was wrong. That so many see screwing fellow employees is quite okay because "management does it" is pathetic in my book. These were a greedy bunch of pilots who wanted to "get mine first", and THOUGHT they found a way to do it without raising any suspicion. Unfortunately, 7 or 8 pilots who are friends all getting a divorce and remarried at the same time seems a bit "fishy" to me, especially when they all grab money and do the EXACT SAME THING. If so many here think this is okay, then your moral compasses are way off. What these guys did was wrong, and for so many to condone it at the expense of fellow employees is sad in my book. Sorry, these guys are just as bad as scabs in my book. Their sorry butts need to be in jail. Personally I'd like to see the IRS go after them with a vengeance.

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What's your opinion on airline mgmt taking multi-million dollar bonuses after pilots take 23-50% paycuts (along with all other employees taking cuts)? Moral and ethical? It's (the bonuses) 'legal' just as these divorces were.....fishy or not.

The 'get mine first' crowd is mgmt. You may not like what these pilots did, but what do you suggest? Should they hang around until the airline goes totally under and there's no $$ for anyone? Do you really think the retirement $$ they earned and took via divorce really affects anything with the airline ops?

They used a legal loophole to extract $$ from the airline they'd never get otherwise (unless you really think this airline will be around to pay their retirements). You might disagree with them on moral and ethical grounds -- but you should be all over mgmt too, or you're a hypocrite.

Personally I don't like it either, but I'll vilify mgmt before I crucify an employee taking desperate measures to secure retirement funds that will be stolen by mgmt in the end anyway.

Do you think these pilots would have done this had they not been shoved into a corner? Who shoved them? Who's the real villiain?

OK, 2 rights don't make a wrong..........but then, this ain't Camelot.

Fraud against the company. They fired a pilot for stealing earplugs from the crew room. He took the whole box. Stealing lots of money works too.

So, since airline management screws it's employees, now we allow employees to screw employees? I don't think CAL is planning on going "under" as you say, anytime soon, as a matter of fact, we aren't doing that bad considering the environment. Is their money in jeopardy? I don't think so. You say they can't get the money? Well, if they'd retire, they CAN get the money....it's just they want to sit around and get all they can for ME ME ME! As for saying they were "shoved in a corner"....you gotta be kidding me. What about the other 4700 pilots? Did you see them pulling the same shenanigans? Don't you think they'd all be doing the same thing to "protect and get the money they earned"? No, I don't agree with our BOD giving management the bank, but I don't appreciate when pilots are doing their damndest to screw other pilots either. I guess picking up open time with pilots on furlough is "okay" with you too since it's "legal", right? Afterall, it's their "right". :rolleyes:

I don't think anyone would excuse the management bonuses and pay. The problem is that the money in a retirement fund belongs to the PILOTS and not the company. As long as the fund stays fully funded, then what these guys did didn't hurt their fellow pilots. If the retirement fund goes into liquidity shortfall and/or is terminated then what these guys did DOES HURT THEIR FELLOW PILOTS. When you take more than your share from the pension fund, you are taking from PILOTS, not from management. That is why people are upset with what they did.

If their actions only hurt other pilots, why would CAL expend so much effort going after them?

Bingo. And who let the plan drop below full funding? Was it the pilots?

nah. fellow employees are not screwed. The employees have accrued their benefits, and would be entitled to the lump sume equivalent of said benefits. It's theirs for the taking whether they terminate their employment, retire, or have to make a distribution to an alternate payee under the provisions of QDRO in the event divorce.

These chaps chose a legal way to protect their accrued financial interests as provided under the provisions of Internal Revenue Code.

Who cares if they chose to get back together:rolleyes: with their spouses after a dirty:rolleyes: divorce.

I say chalk one up for the employees, and for once mgt. got what they deserve... self protection by the employees

If the money isn't there, where are they supposed to get it? It's not like the carriers are all crapping money out their backsides right now.

Where are you getting this information? Their fellow pilots are getting screwed. That money is for retirement purposes, NOT sham divorces. Seriously, do you REALLY think 8 "friends" would ALL be getting divorces AT THE SAME TIME, getting their lump sums, giving it to their wives, and then ALL of the getting back together at the same time isn't just a "little" bit fishy? It's a sham and they all deserve to go to jail, plain and simple. Personally I hope their greed and stupidity puts them in the poor house.:mad:

The real problem is that management is allowed to underfund a pension. This shouldn't happen. It's their job to fund it while running a company.

Is management allowed to not pay you your full pay check or 401k match? Why are they allowed to underfund a pension?

Check with ERISA, TEFRA, DEFRA, and QDRO. Also FASB 35 and FASB 36. While you may not like the methods, or lengths your fellow colleage went to ensure their financial security... it's legal.

In the case of separation, leading to divorce, under QDRO, the alternate payee, ie spouse, is entitled to a minimum of 50 percent of the participant's present value of his/her accrued benefit.

The methods of determining such present value of accrued benefits differs for both Defined Benefit and Defined Contribution Plans.

The more I read between the lines in this case, the angrier I get. Several of you have asked deep probing questions like, "Do two wrongs make a right?" I stumble and struggle with that, as my own "moral compass" seems to have been demagnetized over the years of sharing employment with the likes of these people that "manage" airlines. I wonder on a daily basis if I can work another day in this miserable industry let alone another 15 years without becoming skewed.

Did the funding for the legal defense of the airline's management come from the airline's general fund for mismanagement defense, or did they withdrawal special funds from the retirement plan to pay for the limos, hotels, attorneys and catered lunches while they wrongfully terminated and tried to sue these pilots? Grounds for lawsuit? It seems that the pilots just tried to steal their own retirement before management got it. Judge Gary Miller has ruled that the airline's management was WAY OUT OF LINE. Since we're talking on a higher moral plain, even given my soul searching, to that I say AMEN. ...and...


Ladies and Gentlemen, welcome back. Use the precedent set in this case to sue the airline nine ways to Sunday. Sue for back pay. Sue for back benefits. Sue for pain and suffering. Sue for defamation of character. If anyone looks at you sideways sue them too. Given the language used by Judge Miller, your lawsuits should be a slam dunk. When that is all said and done, consider commuting in early for any trips you choose not to call in sick for over the first year of your reinstatement and spend the time hobnobbing around in the CPO. Flirt with the office staff, rub elbows with the guys that fly desks for a living and generally tell your story often and loud with a large dose of embellishment and poetic license about how they tried to run you out on a rail without having their ducks in a row.

Maybe I can live with the new administration. Seems pretty labor friendly to me.

FYI pensions are real property in a marriage and if one party decides to take his her share by this method there is not much anybody can say/do. When i first read this about a year ago i figured this would be the out come. In this day and age to let a company to decide what is a divorce not going to go too far . Hope the folks get their jobs back.

You can't fix stupid!

Gambling with your money
 

They are allowed to choose where to invest the pension money, so they pick investments which project high returns (but are also subject to greater risk). In this way, they don't need to contribute as much cash each year as would be required if they bought safe, low-yielding bonds or T-bills (which they usually do for executive pensions). When the market eventually slumps, the pension is suddenly underfunded -- sometimes by a great amount. :mad:

These guys were no more having marital problems than the man in the moon. To say that they could ALL be experiencing the SAME thing is bordering on absurd. They tried to screw us, they got caught, and they need to go to jail. They are SCAM artists, period. Hopefully, they can get a job at YOUR company! That way you can appreciate what great employees they are. How'd you like that? :rolleyes:

Erisa
 

i wonder how it is that guys like EWRBASEDPILOT thinks they have the right evaluate someones marriage and personal life? How do u get off or are u just one of those guys that love rumors and think they are fact? I wonder how much u know about ERISA and how that protects you and your rights. You need to get educated on the importance of ERISA and why it was established. One reason it was established to is protect emoloyees from company bullies.

Its as much a sham when management comes to the pilot group saying the need to cancel everyones retirement to save the company.

I was born, but not just yesterday as some on this forum seem to be. What, seriously, do you think the odds are that 7 or 8 FRIENDS ALL get a divorce at the SAME TIME, all are thinking the SAME THING about their lump sums, ALL get it at the SAME TIME, ALL EAGERLY give it to their EX spouses (must have been quite wonderful divorces, right?), and then ALL REUNITE at the SAME TIME is? I'd say I'd have a better chance of winning the Powerball Lottery 3 times in a row. It's stooges like these guys who make a mockery of ERISA, and then when it's REALLY needed, it won't be there to protect anyone. Sorry, but I don't believe their "divorce" crap for one minute, and neither does the pilots/FA's I fly with. I recently flew with an FO who's getting put through the wringer by the company because of what these shysters did....so how fair is that? It's creating a big mess for those who are getting a REAL (notice I said REAL, not SHAM) divorces now. I'll stand by my statement that these LOSERS deserve to be in jail. If what they did was so honorable, you must really love that CEO's can LEGALLY and RIGHTFULLY take all the money and run with it. Nice, eh? I am all for people having rights, but not for someone to THINK they're entitled to something long before they are, and then think they aren't hurting anyone in the process. :eek::rolleyes:

Really? This is interesting. Where do u get your facts?

If, in fact, they ACTUALLY went to the courthouse and were legally divorced, then I don't think anyone has much to complain about. It doesn't matter why they were divorced. There is nothing in the law that prevents a divorced couple from re-uniting. Now if they only CLAIMED to be divorced, without getting the paperwork signed by the judge, then they go to prison.

They found and exercized a loophole--much like some claim management finds and exercizes scope loopholes all the time.

I'd be more worried about a Contempt of Court citiation. I'll bet that, during their divorce proceedings, the judge asked them point blank something like, "Is there any chance of this marriage being reconciled?" to which they probably answered, "No." (Which wasn't "the whole truth" as they were sworn to.) That might be perjury, or at least contempt. I don't know too many judges that like being lied to in their courtroom...

Nice, companies can get sham bankruptcy's to hose its employees. They use loopholes in union contracts to jerk them around. Just sounds like a little poo flinging back in thier direction using their own tactics against them. Not so fun on the other side, huh Continental?