A federal judge in Fort Worth, Texas, has ruled that American Airlines must sue for failing to carefully oversee employee retirement benefits because it used an asset manager that pursued sustainable investment strategies. .
U.S. District Judge Reed O'Connor ruled that pilot Brian Spence would be required to select an investment manager that focuses on “non-financial” environmental, social and governance issues to plan participants. He said he could proceed with a lawsuit for violating the law.
“With these specific actions to select, include, and retain ESG-oriented investment managers, the court has allowed plan assets to be used in support of ESG strategies,” O’Connor said. “It becomes possible to reasonably infer that the defendant's procedures were flawed.”
An American Airlines spokesperson declined to comment Thursday.
Last year, Mr. Spence sued the airline for violating the Employee Retirement Income Security Act (ERISA), which governs how retirement benefits are managed in the United States.
He said American Airlines neglected its duty to maintain loyalty to retirees and carefully oversee assets by engaging investment advisers who “pursued political agendas” through ESG strategies and voting at shareholder meetings. insisted.
American Airlines asked Mr. O'Connor to dismiss the suit, saying Mr. Spence did not allege that the funds in the plan were financially underperforming.
O'Connor, an appointee of former Republican President George W. Bush, frequently rules in favor of conservative litigants challenging laws and regulations governing guns, LGBTQ rights and health care. It is known for.
Last year, the U.S. Department of Labor implemented a rule that allows employee retirement plans to consider environmental, social, and governance (ESG) issues in investment decisions.
Texas is one of 25 Republican-led states to appeal the decision to reject the state's proposal to block the rule.
topic
aviation litigation
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