Hoefert v. American Airlines Incorporated

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

JOHN E. HOEFERT, an §

individual, on behalf of himself §

and all others similarly situated, §

§

Plaintiff, §

§

Civil Action No. 4:18-cv-00466-P

v. §

§

AMERICAN AIRLINES, INC., §

§

Defendant. §

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiff John E. Hoefert’s Motion for Class Certification (ECF

No. 70), Defendant American Airlines, Inc.’s (“American”) Response (ECF No. 81), and

Hoefert’s Reply (ECF No. 83). Also before the Court is Hoefert’s Motion for Partial

Summary Judgment (ECF No. 112), American’s Response and Objection (ECF No. 117),

and Hoefert’s Reply (ECF No. 121). In addition, before the Court is American’s Motion

for Summary Judgment (ECF No. 115), Hoefert’s Response (ECF No. 119), and

American’s Reply (ECF No. 122).

Having considered the Motion for Class Certification as well as the Motions for

Summary Judgment, related briefing, the parties’ Joint Stipulation (ECF No. 110), and

applicable law, the Court finds that American’s Motion for Summary Judgment (ECF

No. 115) should be and is hereby GRANTED, Hoefert’s Motion for Partial Summary

Judgment (ECF No. 112) should be and is hereby DENIED, and Hoefert’s Motion for

Class Certification (ECF No. 70) is DENIED as moot.

FACTUAL BACKGROUND

A. Undisputed/Stipulated Facts

American, an international air carrier, is a Delaware corporation with its principal

place of business in Texas. FAC at ¶ 10, ECF No. 94; Answer at ¶ 10, ECF No. 95; Jt.

Stipulation at ¶ 1, ECF No. 110.

In September 2005, US Airways, Inc. merged with America West Airlines, Inc. Jt.

Stipulation at ¶ 4. After the merger, employees of each airline became employees of US

Airways, Inc. Id. On December 9, 2013, US Airways merged with American. American’s

MSJ Br. at 3, ECF No. 115. After the merger, employees who began their employment

with America West and continued with US Airways became employees of American.

Likewise, employees who were employed by US Airways before its merger with America

West became employees of American. FAC at ¶ 7. Throughout this Order, the Court refers

to pilots employed by American who were previously employed by America West before

it merged with US Airways as “LUS West Pilots”; pilots employed by American who were

previously employed by US Airways before it merged with American, except for LUS

West Pilots, as “LUS East Pilots”; and pilots employed by American and previously

employed by American before it merged with US Airways as “LAA Pilots.” Jt. Stipulation

at ¶ 5.1 The Court has created the following visual aid to depict this sequence of events:

US Airways (LUS East)

(2005) US Airways (LUS East)

America West (LUS West) (2013) American (LAA)

American (LAA)

Hoefert is currently a pilot for American and member of the United States Army

Reserve. See Jt. Stipulation at ¶¶ 6–7, ECF No. 110. Accordingly, Hoefert takes absences

to fulfill his Army Reserve obligations, and from July 12, 2012, through February 13, 2015,

Hoefert was on such military leave. Id. at ¶¶ 8–9. This leave period will be referred to

herein as the “Relevant Time Period.”

During the Relevant Time Period,

• Hoefert accrued sick leave for the first 31 days and for the month of February 2015,

and he did not accrue sick leave from August 2012 through January 2015. Id.;

• Hoefert accrued vacation leave for the period of July 12, 2013 through December

31, 2013 and for the month of February 2015. Id. Hoefert did not accrue vacation

leave from January 1, 2014 through January 31, 2015. Id.; and

• Hoefert received monthly operations-based bonus payments from May, June, and

July 2012, and he did not receive any monthly operations-based bonus payments

from August 2012 through January 2015. Id.

1Hoefert is considered an LUS West Pilot because he was employed by America West

before it merged with US Airways and by US Airways before it merged with American. FAC at

¶ 5.

From July 2012 through December 2018, approximately 1,623 American pilots

(including LAA, LUS West, and LUS East Pilots) took military leave. American’s MSJ

App’x at 15, ECF No. 116-1; Jt. Stipulation at ¶ 9 (stating that “[a]t this time, there is no

disagreement between the parties regarding the military absence dates or the military

absences taken by American pilots (including LAA Pilots, LUS West Pilots, and LUS East

Pilots”).

1. Sick-Time Accrual Rates

From July 2012 through December 2013, LUS East Pilots accrued sick time at a

rate of five hours and thirty minutes for each “month of employment as a pilot with the

Company.” ECF No. 110 at ¶ 10. This is set forth in Section 14 of the collective bargaining

agreement (“CBA”) between US Airways and LUS East Pilots who were represented by

the US Airline Pilots Association (“USAPA”). Id.

From July 2012 through December 2013, LUS West Pilots accrued sick time as set

forth in Section 14 of the CBA between America West and LUS West Pilots who were

represented by the Air Line Pilots Association, International (“ALPA”), which provides,

in part, as follows:

If a Pilot’s sick bank is 0:00-154:00 at the end of the bid period, then the Pilot

shall accrue sick leave credit at the rate of five hours and thirty minutes (5:30)

per bid period of Active Service (except as provided in Section 13) following

each bid period in which the Pilot did not call in sick, and four hours (4:00)

per bid period of Active Service (except as provided in Section 13) following

each bid period in which the Pilot did call in Sick.

If a Pilot’s sick bank is 154:01-500:00 at the end of the bid period,

then the Pilot shall accrue sick leave credit at the rate of four (4:00) hours per

bid period of Active Service (except as provided in Section 13) following

each bid period in which the Pilot did not call in sick, and two hours and

thirty minutes (2:30) per bid period of Active Service (except as provided in

Section 13) following each bid period in which the Pilot did not call in sick.

Id. at § 11.

From January 1, 2014 to the present, LAA Pilots, LUS West Pilots, and LUS East

Pilots have accrued sick time at the rate of five hours for each “month of service,” a term

defined in Section 10 of the applicable CBAs as any month in which the pilot has 15 days

or more “of service.” /d. at | 12.

2. Vacation Accrual Rates

From January 1, 2014 to present, LAA Pilots, LUS West Pilots, and LUS East Pilots

accrued vacation at the following rates:

Accredited Service Vacation Entitlement

As of December 34 In Succeeding Vacation Year

Less than 1 year prorated in b. below

1 through 5 years 21 days

6 years 22 days

7 years 23 days

8 years 24 days

9 years 25 days

10 years 26 days

11 years 27 days

12 years 28 days

13 years 29 days

14 years 30 days

15 years and thereafter 31 days

b. Apilot who, as of December 31 of any Year, has had less than one (1) year of accredited

service with the Company will be entitled to a vacation on the basis of one and three

quarters (1-3/4) days for each month of service.

Id. at § 13. These rates were set forth in Section 9 of the 2013 American MTA, 2013 US

Airway MTA, January 2015 JCBA, and JCBA (“applicable CBAs”). /d. The applicable

CBAs provide that “[v]acation days due shall be converted to vacation hours at the rate of

3 hours and 40 minutes (3:40) per vacation day.” /d.

3. Operations-Based Bonus Payments

Monthly operations-based bonus payments were earned and paid from July 2012

through December 2018 as follows:

YEAR MONTH BONUSS$ Check Date?

2012 JULY 50 9/28/12

2012 SEPT 50 11/30/12

2012 NOV 50 1/30/13

2013 JAN 50 3/29/13

2013 FEB 50 4/30/13

2013 MAR 50 5/31/13

2013 MAY 50 7/31/13

2013 SEP 50 12/30/13

2013 NOV 50 1/30/14

2013 DEC 50 2/28/14

2014 JAN 100 3/28/14

2014 APR 50 6/30/14

2014 SEP 50 11/28/14

2015 SEP 50 11/30/15

2015 OCT 50 12/30/15

2015 NOV 50 1/29/16

2016 FEB 50 4/29/16

2016 APR 50 6/30/16

2016 OCT 50 12/30/16

2016 NOV 50 1/30/17

2017 JAN 50 3/30/17

2017 FEB 50 4/28/17

2017 APR 50 6/30/17

2017 MAY 50 W287

2017 SEP 50 12/5/17

2017 OCT 50 12/29/17

2017 NOV 50 1/30/18

2018 JAN 50 5/30/18

* Check dates are approximate and may have varied depending on when a pilot’s

payroll was processed.

Id. at ¶ 15. American’s Managing Director of Labor Relations, Flight, testified in his

Amended Declaration that from July 1, 2012 through the present, LAA Pilots, LUS West

Pilots, and LUS East Pilots qualified for bonus payments only if they “worked at least one

hour in the month in which the bonus was earned and . . . were on active or eligible inactive

status at the time the bonus was paid out.” American’s MSJ App’x at 10 at ¶ 21, ECF

No. 116-1.

B. American’s “Woodall Policy”

In 2006, the United States Department of Justice (“DOJ”) filed suit against

American on behalf of American pilots who had taken military leave since 2001. See

Woodall v. American Airlines, Inc., No. 3:06-cv-00072-M (N.D. Tex. Jan. 16, 2007).2 The

primary issue in Woodall concerned whether American had treated pilots who had taken

military leave less favorably—specifically, with respect to sick leave and vacation leave

accrual—than pilots who had taken leave for comparable types of non-military leave such

as for jury duty, vacation, union service, and sickness. See generally No. 3:06-cv-00072-

M, Second Amended Complaint, ECF No. 25. In 2008, American and the DOJ reached a

proposed class settlement in which American agreed to treat any pilot absent for military

service for 16 days or less as though the pilot had not been absent. Id. at ECF No. 46.

Several of the class members objected to the proposed class settlement on the ground that

2The Court takes judicial notice of the filings in Woodall v. American Airlines, Inc., No.

3:06-00072-M (N.D. Tex.). See FED. R. EVID. 201; Buckley v. Cockrell, 45 F. App’x 320 (5th Cir.

2002) (“It is permissible for a court to take judicial notice of its own records . . . .”) (internal

quotation marks omitted).

the 16-day “breakpoint” was too short. Id. at ECF No. 68. On August 1, 2008, District

Judge Barbara M.G. Lynn—now Chief District Judge—overruled the objections and

approved the settlement. Id. at ECF No. 74 at 8.

American asserts that to date, it has applied the Woodall settlement agreement in a

manner “more generous” than required by the terms of the settlement agreement “by

treating pilots on military absences of 16 days or fewer in one month as if they worked the

entire absence for sick and vacation accrual purposes.” American’s MSJ Br. at 8. American

further asserts that although it was only required to comply with the Woodall settlement

agreement for three years, it has voluntarily chosen to continue to comply to the present

and that since 2017, American has applied the Woodall policy to LUS West and LUS East

pilots in the same manner it has applied the policy to LAA pilots. Id. at 9.3

PROCEDURAL BACKGROUND

On September 1, 2017, Hoefert, as an individual, on behalf of himself and all others

similarly situated, filed the instant lawsuit against American in the District Court of

Arizona. ECF No. 1. Hoefert alleged that American violated two provisions of the

Uniformed Services Employment and Reemployment Rights Act (“USERRA”) by failing

3In the “Introduction” section of his Response to American’s Motion for Summary

Judgment, Hoefert takes exception with American’s purported reliance on the Woodall settlement

agreement and policy because the case involved different parties, is not binding law, and has no

precedential value. See MSJ Br. in Resp. at 1–2, ECF No. 119. And while Hoefert asserts that

pursuant to Federal Rule of Evidence 408, prior settlement agreements cannot be used as evidence

in a proceeding, he does not clearly object to the Woodall settlement agreement. Regardless, the

Court includes this discussion of Woodall simply for the sake of completeness and context. That

is, although the Court agrees with Hoefert that the Woodall settlement agreement is neither binding

nor precedential, it informed American’s policies during the Relevant Time Period, and thus is

relevant to the Court’s background discussion.

to provide Hoefert and other pilots on military absences with the most favorable sick-time

accrual, vacation-time accrual, and operations-based bonus payments. See id.; 38 U.S.C. §

4316(a), (b). American filed a motion to transfer, and on June 7, 2018, the case was

transferred to the Court. See ECF Nos. 38–39. Hoefert eventually filed a First Amended

Complaint (“FAC”), which is Hoefert’s live pleading. ECF No. 94.

On October 10, 2018, Hoefert filed a Motion for Class Certification in which he

sought to certify the following four classes: (1) Bonus Class; (2) US Airways, Inc. Sick

Time Accrual Class; (3) Post-Merger Sick Time Accrual Class; and (4) Post-Merger

Vacation Time Accrual Class. ECF No. 69; ECF No. 102 at 1–2. After a conference with

the parties’ counsel, the Court ordered (1) Hoefert to file a document identifying each type

of leave he alleged was comparable to military leave, (2) the parties to file a stipulation as

to certain matters, and (3) for each party to file a motion for summary judgment. See ECF

No. 105. Accordingly, on May 16, 2019, Hoefert filed a response identifying the following

five types of absences he alleges are comparable to absences for military leave: (1) sick

leave; (2) Duty with the Association; (3) jury duty; (4) vacation; and (5) FMLA leave. ECF

No. 107. Then on July 16, 2019, the parties filed a Joint Stipulation addressing military

absences, sick-time accrual rates, vacation accrual rates, and monthly operations-based

bonus payments. ECF No. 110.4

4The case was transferred from the Honorable John McBryde to the undersigned on

August 8, 2019. See ECF No. 111.

On August 15, 2019, Hoefert filed a motion for partial summary judgment (ECF

No. 112) and American filed a motion for summary judgment (ECF No. 115). The parties

have filed responses and replies and American has filed supplemental authority to which

Hoefert filed a response and objection.5 See ECF Nos. 117–122, 124–25. The Motion for

Class Certification, American’s Motion for Summary Judgment, and Hoefert’s Motion for

Partial Summary Judgment are ripe for the Court’s consideration.

APPLICABLE LAW

A. FED. R. CIV. P. 56

The Court may grant summary judgment where the pleadings and evidence show

“that there is no genuine dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” FED. R. CIV. P. 56(a). “[T]he substantive law will identify

which facts are material.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A

genuine dispute as to any material fact exists “if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party.” Id. The movant must inform the court of

the basis of its motion and demonstrate from the record that no genuine dispute as to any

material fact exists. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

When reviewing the evidence on a motion for summary judgment, courts must

resolve all reasonable doubts and draw all reasonable inferences in the light most favorable

to the non-movant. See Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir. 1988).

The court cannot make a credibility determination in light of conflicting evidence or

5Having considered American’s supplemental authority and Hoefert’s response and

objection, the Court OVERRULES Hoefert’s objection.

competing inferences. Anderson, 477 U.S. at 255. If there appears to be some support for

disputed allegations, such that “reasonable minds could differ as to the import of the

evidence,” the court must deny the motion. Id. at 250.

“On cross-motions for summary judgment, the court “review[s] each party’s motion

independently, viewing the evidence and inferences in the light most favorable to the

nonmoving party.” Target Constr., Inc. v. Baker Pile Driving & Site Work, LLC, No. 12-

01820, 2013 WL 4721369, at *2 (E.D. La. Sept. 3, 2013) (citing Ford Motor Co. v. Tex.

Dep’t of Transp., 264 F.3d 493, 498 (5th Cir. 2001)).

B. The Propriety of Resolving a Motion for Summary Judgment Before Resolving

a Motion for Class Certification

Federal Rule of Civil Procedure 23 provides that “[a]t an early practicable time after

a person sues or is sued as a class representative, the court must determine by order whether

to certify the action as a class action.” FED. R. CIV. P. 23(b)(1)(A). “As a general matter,

however, Rule 23 permits a district court, in appropriate circumstances, to defer the issue

of class certification until after disposing of summary judgment motions.” Danny B. ex rel.

Elliott v. Raimondo, 784 F.3d 825, 837–38 (1st Cir. 2015). Indeed, the United States

District Court for the Southern District of Texas has taken this approach and resolved a

motion for summary judgment before deciding a motion for class certification. See, e.g.,

Hoge v. Parkway Chevrolet, Inc., No. CIV.A. H-05-2686, 2007 WL 3125298, at *16 (S.D.

Tex. Oct. 23, 2007) (Rosenthal, J.) (“A suit pleaded as a class action may be resolved by

deciding a motion to dismiss or for summary judgment, even before class certification is

decided.”). The effect of a district court’s resolution of a dispositive motion while a motion

for class certification is pending may cause the motion for class certification to become

moot. See id. (“Because Parkway’s summary judgment motion that the mailing Hoge

received does not violate the FCRA is granted, Hoge’s motion for class certification under

Rule 23(b)(3) is moot.”).

Because the resolution of the Motions for Summary Judgment may render the

Motion for Class Certification moot, the Court first addresses the Motions for Summary

Judgment.

ANALYSIS

Hoefert asserts that American violated Section 4316(a) of USERRA by not

providing Hoefert with the following benefits while he was on military leave that Hoefert

contends are seniority-based benefits: sick-time accrual, vacation accrual, and monthly

operations-based bonuses. FAC at ¶¶ 61–63, 73–75, 83–85. Hoefert alternatively asserts

that if these same benefits are not seniority-based, American violated Section 4316(b) of

USERRA by not providing Hoefert with sick accrual, vacation accrual, and monthly

operations-based bonuses while on military leave, when American did provide such

benefits to pilots on comparable leaves of absences. Id. at ¶¶ 64–68, 76–79, 86–88.

According to Hoeffert, these comparable leaves of absence are for jury duty, union service

(“Duty with Association”), sickness, Family Medical Leave Act (“FMLA”) absence, and

vacation. See ECF No. 107.

American disagrees and argues that the undisputed facts as provided in the Joint

Stipulation, applicable CBAs, and summary judgment record establish the “non-seniority”

nature of the pilots’ sick and vacation-time accrual and operations-based bonus payments.

ECF No. 113 at 16–17; ECF No. 119 at 11–12, 15, 19; ECF No. 122. American further

argues that the employees absent for alleged comparable leaves of absence are not treated

more favorably than those who are absent for military leave and that in any event, the other

leaves of absence are not comparable. American’s MSJ Br. at 21–31, ECF No. 115.

A. USERRA

“Enacted in 1994, USERRA is the latest in a series of veterans’ employment rights

laws . . . .” Crews v. City of Mt. Vernon, 567 F.3d 860, 864 (7th Cir. 2009).6 USERRA has

three express purposes: (1) to encourage noncareer service in the uniformed services by

reducing employment disadvantages; (2) to minimize the disruption to the lives of persons

performing military service, their employers and others by providing for the prompt

reemployment of such person upon their completion of such service; and (3) to prohibit

discrimination against persons because of their service in the uniformed services. 38 U.S.C.

§ 4301(a); Bradberry v. Jefferson Cty., Tex., 732 F.3d 540, 544–45 (5th Cir. 2013). To

those ends, USERRA provides in relevant part that “[a] person who . . . has an obligation

to perform service in a uniformed service shall not be denied . . . any benefit of employment

6Courts have universally acknowledged the propriety of relying on cases analyzing

predecessor statutes, such as the Military Selective Service Act of 1967 and the Veterans’

Reemployment Rights Act (VRRA), when considering claims under the USERRA. See e.g.,

Serricchio v. Wachovia Sec. LLC, 658 F.3d 169, 174 (2d Cir. 2011) (“In enacting USERRA,

Congress made clear that the statute should be thought of as an extension of existing law—not an

entirely new piece of legislation supplanting the body of case law that had developed around

veterans’ rights.”); Rogers v. City of San Antonio, 392 F.3d 758, 762 (5th Cir. 2004) (same).

Indeed, one of USERRA’s implementing regulations states, “In enacting USERRA, Congress

emphasized USERRA’s continuity with the VRRA and its intent to clarify and strengthen the law.

Congress also emphasized that Federal laws protecting veterans’ employment and reemployment

rights for the past fifty years has been successful and that the large body of case law that has

developed under those statutes remained in full force and effect, to the extent it is consistent with

the USERRA.” 20 C.F.R. § 1002.2.

by an employer on the basis of that . . . performance of service . . . or obligation.” 38 U.S.C.

§ 4311(a). The Supreme Court has explained that such statutory reemployment protections

for service members are “to be liberally construed for the benefit of those who left private

life to serve their country . . . .” Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S.

275, 285 (1946).

However, while the USERRA was intended to benefit and protect service members,

it was not intended to provide service member employees with more favorable treatment

than non-service member employees. Indeed, the Court of Appeals for the Federal Circuit

clarified that USERRA requires that “service member employees receive benefits equal to,

but not more favorable than, those generally available to all employees of the employer.”

Tully v. Dep’t of Justice, 481 F.3d 1367, 1369 (Fed. Cir. 2007); see also Waltermyer v.

Aluminum Co. of Am., 804 F.2d 821, 825 (3d Cir. 1986) (“[W]e are conscious that the

[servicemember] plaintiff’s rights must equal, and not exceed those of employees covered

by the collective bargaining agreement.”).

B. Seniority-Based Benefits Under 38 U.S.C. § 4316(a)

American first seeks summary judgment on Hoefert’s claims under 38 U.S.C.

§ 4316(a) because it contends that all of the benefits at issue—sick and vacation-time

accrual and operations-based bonuses—are non-seniority benefits and thus not protected

by Section 4316(a). American’s MSJ Br. at 15. Hoefert responds that all of the benefits are

conditioned, not on an actual work requirement, but merely on the passage of time he

remains employed, so the benefits are seniority-based to which Hoefert is entitled even

when absent for military service. Hoefert’s MSJ Resp. at 10–11, ECF No. 119. American

rejoins that such a reading is untethered from the undisputed facts. American’s Reply at 11,

ECF No. 112.

With respect to the benefits of persons absent from employment to perform

uniformed (military) service, Section 4316(a), which addresses seniority-based benefits,

states as follows:

A person who is reemployed under this chapter is entitled to the seniority and

other rights and benefits determined by seniority that the person had on the

date of the commencement of service in the uniformed services plus the

additional seniority and rights and benefits that such person would have

attained if the person had remained continuously employed.

38 U.S.C. § 4316(a); see also DeLee v. City of Plymouth, 773 F.3d 172, 175 (7th Cir. 2014)

(citing Section 4316(a) for the proposition that one returning from military leave is entitled

to the “seniority-based benefits that they would have attained had they remained

continuously employed”). Therefore, to succeed on a claim under Section 4316(a), Hoefert

must establish that the benefits withheld are seniority-based benefits, while American may

be entitled to summary judgment on this claim if it can establish that the benefits at issue

are non-seniority-based benefits.

Applicable regulations provide three factors for courts to analyze when determining

whether a benefit is seniority-based. First, it must be determined whether the benefit is a

reward for length of service rather than a form of short-term compensation for work

performed. See 20 C.F.R. § 1002.212(a). The Supreme Court has explained that a benefit

is considered a “seniority-based benefit” when “the nature of the benefit [is] a reward for

length of service, rather than a form of short-term compensation for services rendered.”

Coffy v. Republic Steel Corp., 447 U.S. 191, 197–98 (1980); see also Aiello v. Detroit Free

Press, Inc., 570 F.2d 145, 148 (6th Cir. 1978) (addressing a related predecessor statute and

explaining that the veteran returning from military absence “is not entitled to benefits

which require more than continued status, such as a work requirement demanding actual

performance on the job”).7 Second, the Court considers whether it is reasonably certain that

7In analyzing Coffy, the United States District Court for the Northern District of Illinois

has helpfully elucidated the challenge for courts in attempting to distinguish between benefits for

“length of service” versus benefits for “services rendered”:

The Supreme Court has recognized that the problem with this standard is that “even

the most traditional kinds of seniority privileges could be as easily tied to a work

requirement as to the more usual criterion of time as an employee.” Coffy, 447 U.S.

at 203. In other words, there is no objective difference between a “work

requirement” (or “compensation for services rendered”) and “time as an employee”

(or “length of service”), because employees spend their time working. The work

accomplished and the time spent accomplishing it are two sides of the same job-

coin. True, length of service—or seniority—is generally measured in years,

whereas employees are often compensated for services rendered by the hour. But

both involve providing a benefit (whether money, vacation time, etc.) per unit of

time worked. The inherent tie between time and work means that even rewards for

length of service over months or years can be framed as compensation for services

rendered. See Alabama Power Co. v. Davis, 431 U.S. 581, 592–93 (1977) (“It is

obvious that pension payments have some resemblance to compensation for work

performed . . . . The same observations, however, can be made about any benefit

and therefore are of little assistance in determining whether a particular benefit

recompenses labor or rewards longevity with an employer.”).

Since all benefits can be described with reference to a certain period of time

worked, “the particular formula” by which “benefits [are] calculated,” i.e., the

length of the period of time worked necessary to receive any given benefit, is not

the “crucial factor” in determining whether the benefit is seniority-based for

purposes of the Act. See Alabama Power, 431 U.S. at 592, and Coffy, 447 U.S. at

203. Rather, it is the “real nature” of the benefit that is key to determining whether

a benefit is a “reward for length of service” or “compensation for services

rendered.” Alabama Power, 431 U.S. at 588–89.

By “real nature” the Supreme Court appears to mean whether the benefit is

a future-oriented longevity incentive, or backward-looking compensation for work

already performed. The Supreme Court has held that benefits like pensions,

severance pay, or unemployment pay are seniority-based because they concern an

exchange of financial security for an employee’s long-term commitment to an

employer, i.e., accrual of seniority. See Accardi v. Penn. R. Co., 383 U.S. 225, 230

the employee would have received the benefit if he had remained continuously employed

during the period of service. 20 C.F.R. § 1002.212(b). Third, the Court considers whether

it is the employer’s actual custom or practice to provide or withhold the benefit as a reward

for length of service. Id. § 1002.212(c).

1. Sick-Time Accrual is Not a Seniority-Based Benefit

Hoefert contends that sick-time accrual is a seniority-based benefit because it

accrues under the CBAs merely based on “service,” and Hoefert interprets “service” as

used in the CBAs as “similar to ‘employment’ rather than to ‘actual work’ . . . .” Hoefert’s

(1966) (“[The] use of the label ‘compensated service’ cannot obscure the fact that

the real nature of these payments was compensation for loss of jobs. And the cost

to an employee of losing his job is not measured by how much work he did in the

past—no matter how calculated—but by the rights and benefits he forfeits by

giving up his job.”) (emphasis added); Alabama Power, 431 U.S. at 593–94

(pension credit was held to be seniority-based because a period of years is required

for a pension to vest and the purpose of a pension is to assure financial security of

long-time employees in retirement); Coffy, 447 U.S. at 205 (“[T]he purpose and

function of the [weekly supplemental unemployment benefits] is to provide

economic security during periods of layoff to employees who have been in the

service of the employer for a significant period.”); see also DeLee, 773 F.3d at 173

(holding that an annual bonus that could be prorated monthly was a seniority-based

benefit, because the express purpose of the bonus was to be “an incentive for police

and firemen to remain in the service of the City”).

By contrast, the Supreme Court has held that vacation days accrued hourly

were not seniority-based, because a holding to the contrary would be “sharply

inconsistent with the common conception of a vacation as a reward for and respite

from a lengthy period of labor.” Foster v. Dravo Corp., 420 U.S. 92, 101 (1975).

In other words, unlike the pensions, severance pay, or unemployment pay addressed

in Accardi, Alabama Power, and Coffy, vacation days do not incentivize longevity

of employment, but rather compensate for (or in the Supreme Court’s words,

provide a “respite from”) the effort an employee has expended in the past. This

reasoning is reflected in the federal regulations implementing the Act. See 20

C.F.R. § 1002.150 (“As a general matter, accrual of vacation leave is considered to

be a non-seniority benefit[.]”).

Moss v. United Airlines, Inc., No. 16 C 8496, 2019 WL 5892571, at *2–3 (N.D. Ill. Nov. 12, 2019).

MSJ Resp. at 12. American contends that sick-time accrual is non-seniority based because

under the applicable CBAs, sick time is a form of short-term compensation for services

rendered. American’s MSJ at 18, ECF No. 115. American argues that because the CBAs

require 15 days or more “of service” in a month in order to accrue sick time and because

“service” under the CBAs means that a pilot has worked or been available to work—as

opposed to simply having been employed—for at least 15 days in the month, that the

undisputed facts establish that it is a seniority-based benefit. American’s MSJ Reply at 4,

ECF No. 122. American supports its reading of “service” as differentiated from

“employment” because other parts of the applicable CBAs establish that pilots do not

accrue sick leave during other periods of employment absent service (such as FMLA, paid

and unpaid sick absences, and “off-payroll union service absences”). Id. at 4–5.

The Court agrees with American. The applicable CBAs provide that pilots’ sick

accrual is tied to time working or being available to work rather than simply being

employed. That is, “month of service”—defined as fifteen days of “service” in a month—

is required in order for Hoefert to obtain sick accrual. See Jt. Stipulation at ¶ 12; American’s

MSJ App’x at 29–31, ECF No. 116-1. Contrary to Hoefert’s contention that this requires

reading additional terms into the CBAs, it is Hoefert’s reading—having to substitute

“employment” for “service”—that seeks to rewrite the CBAs. Accordingly, based on the

language of the applicable CBAs, the real nature of the sick-time accrual at issue is for

actual work performed rather than a reward for length of service. See LiPani v. Bohack,

546 F.2d 487, 490–91 (2d Cir. 1976) (affirming summary judgment for sick leave benefits

that court found were a form of deferred compensation because the benefits were prorated

and did not increase with seniority).

Therefore, the Court finds that sick-time accrual is not a seniority-based benefit and

thus is not protected under section 4316(a).

2. Vacation-Time Accrual is Not a Seniority-Based Benefit

Hoefert contends that summary judgment is inappropriate because vacation-time

accrual is a seniority-based benefit that contains no work requirement or actual

performance on the job necessary to obtain the benefit. Hoefert’s MSJ Resp. at 14; see

Aiello, 570 F.2d at 150 (stating that a “work requirement demanded actual performance on

the job”). Thus, Hoefert contends that American’s vacation-accrual benefit should be

considered a seniority-based benefit because “it accrues solely with the passage of time.”

Partial MSJ at 17, ECF No. 113. American attempts to distinguish Hoefert’s caselaw by

arguing that those cases still correlated benefits to the amount of work actually performed

by the employee. American’s MSJ Reply at 7. According to American, Hoefert—like all

other American pilots—accrues vacation under the applicable CBAs on a prorated basis

for specified absences during which the pilot is not able to actually perform services. Id.

at 8.

The weight of authority establishes that vacation time accrued is usually not a

seniority-based benefit that is protected under Section 4316(a). First, the federal regulation

implementing the USERRA plainly states that “[a]s a general matter, accrual of vacation

leave is considered to be a non-seniority benefit[.]” 20 C.F.R. § 1002.150. Thus, although

vacation leave is not a non-seniority benefit per se, it is generally the case. See id. Second,

in Foster v. Dravo Corp., the Supreme Court held that vacation days accruing hourly are

not seniority-based but rather are a reward for and respite from a lengthy period of labor.

420 U.S. at 99–101; see also Austin v. Sears, Roebuck & Co., 504 F.2d 1033, 1037 (9th

Cir. 1974) (recognizing in the context of a USERRA predecessor statute that “[a] paid

vacation is fairly understood as part of a worker’s short-term return from labor”). Indeed,

in Foster, the Supreme Court explained that considering vacation accrual as a non-seniority

benefit is “so sharply inconsistent with the common conception of a vacation as a reward

for and respite from a lengthy period of labor that the statute should be applied only where

it clearly appears that vacations were intended to accrue automatically as a function of

continued association with the company.” Foster, 420 U.S. at 101 (emphasis added). Under

the applicable CBAs, it is not clear that vacations accrue automatically solely with the

passage of time. Third, the CBAs at issue provide vacation accrual based on active status—

that is being available for service—for at least fifteen days rather than mere employment

for at least fifteen days. See id. at 101 (explaining that vacation accrual should be

considered a seniority-based benefit “only where it clearly appears that vacations were

intended to accrue automatically as a function of continued association with the

company”); American’s MSJ App’x at 20–21.

Here, the disputed vacation days accrue not to incentivize long-term employment,

but rather to compensate and provide a respite from American’s pilots’ past efforts. See

Austin, 504 F.2d at 1037 (“A paid vacation is fairly understood as part of a worker's short-

term return for labor; hence, treating vacation time earned as a function of actual labor

performed is not unreasonable.”). Indeed, Section 9 of the applicable CBAs provides that

full vacation leave accrues over a calendar year if a pilot has twelve months of active

service,8 while prorated vacation leave accrues if the pilot works fewer than twelve months

of active service. When considered on a monthly basis, full vacation leave accrues each

month an employee is active at least fifteen days. See American’s MSJ App’x at 19–22,

ECF No. 116-1. Therefore, vacation-time accrual is tied to an actual work requirement and

thus the Court finds that it is a non-seniority-based benefit and not protected under Section

4316(a). See Moss, 2019 WL 5892571, at *3 (granting summary judgment on Section

4316(a) claim and holding that vacation time is not a seniority-based benefit because the

applicable CBA’s “focus on compensation for work completed in the past shows that the

‘real nature’ of vacation days in this case is not a reward for length of service”); LiPani,

546 F.2d at 490.

3. Bonus Payments are Not a Seniority-Based Benefit

American seeks summary judgment on Hoefert’s claim for operations-based bonus

payments. American’s MSJ at 19–20, ECF No. 115. These operations-based bonus

payments are part of American’s monthly program whereby employees are eligible to

receive a $50 bonus payment if the airline achieves a first-place ranking in certain United

States Department of Transportation metrics such as on-time arrivals and baggage

performance. See American’s MSJ App’x at 31–32. Thus, the bonus payments are

“intended to incentivize employee performance to help American achieve its objectives

each month.” American’s MSJ App’x at 32. Hoefert claims that the undisputed material

8American considers a month of “active service” as one in which the pilot works at least

fifteen days in the month. See American’s MSJ App’x at 19–21, ECF No. 116-1.

facts show that the qualification for receiving bonus payments is if a pilot is “actively

employed or on eligible leave of absence,” and if the employee’s pay hours are “greater

than zero” during the bonus month. Hoefert’s Partial MSJ at 19, ECF No. 113. Therefore,

Hoefert argues that it is reasonably certain that had he not been absent for military service,

he would have been paid the bonus and that American’s actual practice is to provide bonus

payments based on length of service rather than performance of the individual employee.

Id. at 19–20.

The Court finds that the bonus payments are non-seniority-based benefits because

they are tied to actually performing services on behalf of American. Borrowing the

language of the Supreme Court, the operations-based bonus payments are “a bona fide

effort to compensate for work actually performed.” Foster, 420 U.S. at 99. To read the

operations-based bonus payments—that is, payments for meeting certain operational

benchmarks—as anything other than compensation for work actually performed, is to

ignore the real nature of the benefit. See Accardi, 383 U.S. at 330. Indeed, the January 23,

2014 letter to American employees, attached to American’s summary judgment appendix,

describes the monthly bonus program as an “operational incentive program.” See MSJ

App’x at 31–32, 415, ECF Nos. 116-1, 116-2. This language clearly connects or is at least

a bona fide effort to connect the bonus payments to actual performance. See Foster, 420

U.S. at 99. Thus, the Court concludes that the operations-based bonus payments are non-

seniority-based benefits, which are not protected by Section 4316(a).

Having concluded that the three benefits that Hoefert claims were withheld in

violation of 38 U.S.C. § 4316(a) are non-seniority benefits and thus are not protected by

Section 4316(a), the Court GRANTS summary judgment on this claim.

C. Other Benefits Under 38 U.S.C. § 4316(b)

Section 4316(b) requires that the plaintiff establish that the benefits withheld are

provided to employees having similar seniority, status, and pay who are on furlough or

authorized leave of absence that is comparable to military leave. See 38 U.S.C. § 4316(b).

The statute reads as follows:

Subject to paragraphs (2) through (6), a person who is absent from a position

of employment by reason of service in the uniformed services shall be --

(A) deemed to be on furlough or leave of absence while performing

such service; and

(B) entitled to such other rights and benefits not determined by

seniority as are generally provided by the employer of the person to

employees having similar seniority, status, and pay who are on

furlough or leave of absence under a contract, agreement, policy,

practice, or plan in effect at the commencement of such service or

established while such person performs such service

Id.

One of the implementing regulations addressing non-seniority benefits explains that

“[i]f the non-seniority benefits to which employees on furlough or leave of absence are

entitled vary according to the type of leave, the employee [on military leave] must be given

the most favorable treatment accorded to any comparable form of leave . . . .” 20 C.F.R.

§ 1002.150(b). The regulation further states that “[i]n order to determine whether any two

types of leave are comparable, the duration of the leave may be the most significant factor

to compare.” Id. “In addition to comparing the duration of the absences, other factors such

as the purpose of the leave and the ability of the employee to choose when to take the leave

should also be considered.” Id. Thus, to determine whether the five forms of leave are

comparable, the Court considers (1) the duration of leave, (2) the purpose of leave, and (3)

the ability of the employee to choose when to take the leave. See id.

American asserts in its Motion for Summary Judgment that the undisputed facts

establish that the “comparable” non-military absences are not actually “comparable” as

absences protected by the USERRA. American’s MSJ at 21–31, ECF No. 115.

Accordingly, American may be entitled to summary judgment if it can conclusively

establish that the other absences are not “comparable” to military absences. See 20 C.F.R.

§ 1002.150.

1. Sick Leave

American argues that absences for sickness are not comparable to military absences

because choosing to take a sick absence is discretionary (as opposed to becoming ill or

injured, which is obviously nondiscretionary), whereas military absences are

nondiscretionary and simply must be taken when the military orders the pilot when to

report. American’s MSJ at 30–31, ECF No. 115. American further argues that these

absences are different based on their differing purposes. Id. at 31. To demonstrate the

differing purposes, American shows that sick leave is an earned employment benefit

similar to vacation that a pilot may deduct leave from his bank of sick leave when necessary

to use, but American will pay the pilot for accrued sick time that is not used annually. See,

e.g., American’s MSJ App’x at 369. Finally, under the applicable CBAs, American caps

pilots’ total sick time accrued (short-term and long-term) at 1,000 hours. Id. at 369–70.

American conversely shows that military leave has a different purpose because such

absences does not accrue in a bank to be deducted when called upon, and there is no

payment for unused, accrued military leave. Finally, there is no cap for military leave.

American’s MSJ Br. at 31. American also argues that sick absences and military leaves are

different in their duration. The average length of military leave is 23.2 days, whereas the

average length of sick absence is 6.6 days. See American’s MSJ App’x at 15, 17.

Hoefert responds that sick absences and military absences are similar in that their

duration can be as short as a day or two but they can also last up to thirteen months or

longer. Hoefert’s MSJ Resp. at 25, ECF No. 119. Hoefert juxtaposes the percentage of

military leave over 30 days (4.06%) with the percentage of sick leave over 30 days (2.3%)

and concludes that a 1.7% difference indicates that the forms of leave are comparable. Id.

Hoefert also asserts that sick and military leave are comparable because they each provide

employees with time away from work so that they can eventually return to work. Id.

The Court agrees with American that sick and military absences are not comparable.

First, the purposes are different because military absences are forward looking, whereas

sick leave is backward looking. That is, military leave is provided as the need arises going

forward—when the pilot is called to service. Sick leave is provided (accrues or is earned)

based on past days worked. These different purposes are illustrated by the differences

highlighted above—e.g., sick leave bank, payment for unused sick leave, and sick leave

capped at 1,000 hours. Moreover, the durations are different. Although Hoefert is correct

that from July 2012 through December 2018, the raw percentage difference between

military and sick absences that are longer than 30 days is only 1.7%, the Court notes that

the average length of all military leave is 23.2 days, whereas the average length of all sick

absence is 6.6 days. The Court finds the difference in average length of absence more

convincing than Hoefert’s percentage-based argument. American’s MSJ App’x at 15, 17,

ECF No. 116.

Thus, the Court finds that based on purpose and duration, military absences and sick

absences are not comparable, and as such Hoefert is not entitled to benefits on military

leave that other pilots may accrue while on sick leave.

2. Duty with the Association

Hoefert alleges that he is entitled to the same non-seniority benefits as pilots absent

for Duty with the Association. FAC at ¶ 76. According to Hoefert, union service is

comparable to military leave because they are both unpaid, both can last up to several years,

and the Association’s representative requirements means pilots may “not effectively have

a choice but to perform Union Service.” Hoefert’s MSJ Resp. at 27, ECF No. 119.

American argues that benefits provided non-military leave for union service is not

comparable to military leave, and even if so, the benefits are provided by the union and not

American and thus are not protected by the USERRA. American’s MSJ Reply, ECF No.

122 at 14–15; American’s MSJ App’x at 29. Hoefert acknowledges that the union

technically pays for leave benefits and the benefits are administered by American, but he

nevertheless argues that the benefits are still protected because they are provided to pilots

pursuant to the applicable CBAs. Hoefert’s MSJ Resp. at 27.

The operative text of the USERRA plainly states that military service members on

leave are entitled to the same benefits “as are generally provided by the employer” to

employees for other comparable absences. See 38 U.S.C. § 4316(b)(1)(B). Thus, because

the benefits allegedly accruing while other pilots are absent for Duty with Association are

not actually paid by American and are in fact paid by the union and simply administered

by American, any such benefit is not “provided by” American, and thus is not protected by

section 4316(b). See Moss, 2019 WL 5892571, at *5 (granting summary judgment on

section 4316(b) claim because “even if [association leave of absence] is comparable to

military leave, Defendants do not generally provide benefits during [association leave of

absence] since the benefits are covered by the union.”).

But even if the Court concluded otherwise, American would still be entitled to

summary judgment because Duty with the Association is not comparable because the

absences serve different purposes, which is illustrated by the fact that being a union

representative and thus being on leave for such representation is completely voluntary,

whereas military service can be compulsory. American’s MSJ App’x at 28. Hoefert’s

argument that a pilot may not have a choice but to perform union service given the overall

group of pilots employed by American amounts is thus unpersuasive. See Hoefert’s MSJ

Resp. at 27, ECF No. 119. Moreover, under the applicable CBAs, only three pilots at a

time are permitted absences to participate in full-time union activities. American’s MSJ

App’x at 379. This participation limitation is intended to permit a small number of pilots

to participate in labor/management relations without dramatically interrupting American’s

operations. See e.g., id. at 165. The applicable CBAs place no such limitation on the

number of American pilots that may be simultaneously on military absences and the

purpose of any such American policy regarding military absences is solely to benefit and

protect the servicemembers and not American.

Therefore, Hoefert is not entitled to benefits that may accrue to other pilots on leave

for Duty with the Association when he is on military leave.

3. Jury Duty

American asserts that absences for jury duty are not comparable to absences for

military service because jury duty is compulsory whereas military duties are voluntary.

American’s MSJ at 29–30, ECF No. 115. American further argues that the difference in

duration between these two types of absences demonstrates that the absences are not

comparable. As already noted, the average length of military absence from July 2012

through December 2018, was 23.2 days. American’s MSJ App’x at 15–16. The average

length of absence for jury duty during the same time period was 1.8 days. American’s MSJ

at 30, ECF No. 115. The longest military absence was 14.6 years (American’s MSJ App’x

at 15), whereas the longest absence for jury duty was 52 days (Id. at 16).

Hoefert responds that American’s attempt to distinguish jury duty absences from

military duty absences fails because the USSERA defines military service (“uniformed

services”) as “performance of duty on a voluntary or involuntary basis . . . .” Hoefert’s MSJ

Resp. at 29, ECF No. 119 (citing 38 U.S.C. § 4303(13)). Thus, Hoefert argues that it does

not matter if jury duty is involuntary and military service is voluntary. Id.

While the Court agrees with Hoefert that the voluntariness of the allegedly

comparable absence is not a controlling, the employee’s ability to choose when to take the

absence is a factor to consider. See 20 C.F.R. § 1002.150(b) (providing “[i]n order to

determine whether any two types of leave are comparable, . . . the ability of the employee

to choose when to take the leave should . . . be considered”). Ultimately, the Court is

persuaded that the differences in average duration render the two absences not comparable.

Hoefert did respond to American’s duration argument. As the implementing regulation

provides, duration may be the most significant factor for courts to consider when

determining comparability. See 20 C.F.R. § 1002.150(b). Thus, because the significant

difference in durations, the Court finds that absences for jury duty are not comparable to

absences for military service. Moss, 2019 WL 5892571, at *4 (granting summary judgment

on section 4316(b) claim for jury duty because “regardless of whether this Court agrees

that jury duty and military leave are analogously compulsory . . . there can be no reasonable

dispute that jury duty service of [longer than 90 days] is highly unusual”). Accordingly,

Hoefert is not entitled to benefits while on military leave that may accrue to American

pilots absent while on leave for jury duty.

4. Vacation

American seeks summary judgment on the theory that vacation is not a “leave of

absence” protected by section 4316(b) because under the applicable CBA, vacation is

located in a different section than the section entitled, “Leaves of Absence.” American’s

MSJ at 28, ECF No. 115; American’s MSJ App’x at 27, 362. American underscores its

argument by references a separate provision in the applicable CBA that is entitled, “Effect

of Leaves on Vacations.” Id.; American’s MSJ App’x at 366. American also argues that

vacation absences are different than military absences because they have different purposes

and durations. Id.

Hoefert does not respond to American’s argument regarding vacation. Regardless,

the Court finds that vacation absences are not comparable to military absences because the

durations are so different. Under the applicable CBAs, the maximum amount of days that

a pilot may be out for vacation is 31 days in a given year. See Jt. Stipulation at ¶ 13. On the

other hand, from July 2012 through December 2018, 1,570 military absences lasted for one

month or longer. American’s MSJ App’x at 16.

Accordingly, Hoefert is not entitled to the benefits while he is absent for military

service that pilots absent for vacation may accrue.

5. FMLA Leave

Finally, American contends that absences for FMLA are not protected by the

USERRA because FMLA leave is statutorily mandated and not a “leave of absence under

a contract agreement, policy, practice, or plan.” 38 U.S.C. § 4316(b)(1)(B); American’s

MSJ at 25, ECF No. 115. American further contends that FMLA leave is not comparable

to military absences because the average length of pilot military absence from July 2012

through December 2018 was approximately 23.2 days, with the longest absence being 14.6

years. American’s MSJ App’x at 15. The average length of FMLA absences during the

same period averaged 5.7 days and could not exceed 72 or 156 days. See 29 C.F.R. §

825.802(a). American’s MSJ at 27, ECF No. 115. Hoefert responds that he does not contest

the validity of FMLA, but instead argues that the issue is the benefits under the applicable

CBAs. MSJ Resp. at 28, ECF No. 116.

Focusing on the difference in average durations between absences for military leave

and absences for FMLA, as well as the difference in the longest absence for each, the Court

concludes that the two types of absences are not comparable. Therefore, Hoefert is not

entitled to the same benefits to pilots absent for family medical leave when he is absent for

military service.

Having concluded that none of the other benefits Hoefert claims he was deprived of

in violation of the USERRA concerned comparable absences, the Court GRANTS

summary judgment on Hoefert’s 38 U.S.C. § 4316(b) claim.

CONCLUSION

For the foregoing reasons, the Court finds that Hoefert’s Motion for Partial

Summary Judgment (ECF No. 112) should be and is hereby DENIED and that American’s

Motion for Summary Judgment (ECF No. 115) should be and is hereby GRANTED. The

Court DISMISSES Hoefert’s claims with prejudice.

Accordingly, Hoefert’s Motion for Class Certification (ECF No. 69) is DENIED as

moot.

SO ORDERED on this 9th day of January, 2020.

Mu “7 (Lebron _

i

Mark T. Pittman

UNITED STATES DISTRICT JUDGE

31