United Employee Claims Forced Unpaid Leave Violates Terms of $5 Billion CARES Act Agreement

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A United Airlines employee claims the carrier has unlawfully required workers to take unpaid time off despite accepting from the federal government roughly $5 billion that was meant to cover payroll costs.

According to the nine-page case out of Illinois, United Airlines agreed that in exchange for receiving funds under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the company would not require employees to take unpaid leave “for any reason,” reduce salaried employees’ wages, or cut benefits for any employee. The case claims that despite the agreement’s clear terms, United announced in May that all management and administrative employees must take 20 unpaid days off before September 30.

The lawsuit explains the federal government passed the CARES Act in an effort to help boost the nation’s economy as the COVID-19 pandemic rages on. One provision of the Act authorized the Secretary of Treasury to grant financial assistance to air carriers “that shall exclusively be used for the continuation of payment of employee wages, salaries, and benefits,” the suit states. In exchange for receiving the funds, each carrier agreed to refrain from furloughing employees or reducing pay rates and benefits until September 30, 2020, per the complaint.

Only two weeks after United agreed to receive federal funds, however, the airline announced to employees via email that the CARES Act relief “only covers a part of our payroll costs,” and that all management and administration employees would therefore be required to take 20 unpaid days off between May 16 and September 30, the complaint says. The lawsuit argues that the airline’s unpaid day off mandate directly violates the terms of the CARES Act, which was meant to protect employees from reduced pay and benefits.

“United’s breach harms the agreement’s intended beneficiaries: United employees,” the complaint states. “United employees face a substantial reduction in pay as a result of United’s policies, despite the billions of federal dollars United received, specifically transferred to the company to protect employees.”

The lawsuit looks to represent all United non-union employees subject to the airline’s unpaid time off program between May 16 and September 30, 2020.

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