The nation's biggest pilots' union has agreed to pay $53 million to end a lawsuit by former TWA pilots who said the union didn't do enough to protect their seniority rights after American Airlines bought Trans World Airlines.
The settlement by the Air Line Pilots Association, or ALPA, will go to a federal judge in New Jersey for approval.
The case stemmed from American's 2001 acquisition of TWA, which was then in bankruptcy. The Allied Pilots Association, which represented American pilots, put many of the TWA pilots at the bottom of a new seniority list and they were laid off after the downturn in travel following the September 2001 terror attacks. The TWA pilots were represented by ALPA.
Some of the TWA pilots sued in 2002, a jury ruled in their favor in 2011, and a trial on damages against ALPA was scheduled to begin in March.
In court papers Thursday, the union said it agreed to pay $53 million into a fund for TWA pilots and their lawyers. ALPA told its members that insurers would pay much of the cost. According to some reports, the ex-TWA pilots were expected to seek $250 million in damages.
"With initial damages sought in the billions, this settlement, while significant, is far less than what the plaintiffs pursued. And because of our preparation and risk management, ALPA will make our portion of the payment without impairing our operations or services, without assessing our members, and without raising dues," ALPA president Lee Moak told members in a letter sent on Thursday.
The Dallas Morning News reported that Allen Press, lead counsel whose St. Louis law firm took over the pilots’ case in 2006, said the settlement was a fair one that will put money in hands of ex-TWA employees hurt after the 2001 takeoff of TWA.
“We’re very pleased to accomplish something meaningful for a large group of pilots that really suffered as a result of that merger, and we’re pleased by that,” Mr. Press said.