Numerous airline companies have filed for bankruptcy or have sought financial assistance from the government in the past few years as a result of the declining economy. However, when those airlines go out of business or restructure under a government payment plan, the employees are often left in personal financial crisis.
In many cases, pilots and other airline employees have lost retirement benefits and pension plans that were promised to them as part of their compensation packages. In one recent case, it appears that several pilots may have found a questionable loophole – divorce – that has allowed them to save their pension benefits.
Continental Airlines recently filed a lawsuit in Houston against more than a dozen pilots, claiming that they obtained sham-divorces in order to force the airline to release their pension benefits early. Numerous states have laws that require companies to release pension payouts for divorce settlement purposes. That means that the pilots’ ex-spouses received the benefits during the divorce proceedings.
The interesting and controversial part of this case is the fact that many of the pilots re-married their ex-spouses shortly following the pension payout. This left people asking whether the ex-employees’ divorces were acts of fraud. A federal court in Houston recently heard this case and decided that the airline had no right to inquire into the legitimacy of the pilots’ divorce proceedings. Therefore, it appears that this apparent loophole has been left open for the time being.
It isn’t completely unusual for couples to divorce, rediscover their love for each other and remarry. But, do you think that is what happened in these cases? Were the pilots’ actions ethical?
ABC News: “Pilots Win “Sham-Divorce’ Case Against Continental,” David Koenig, 20 Jul. 2011