Lawsuit alleging fake divorces by Continental Airlines pilots dismissed

In 2009, Texas-based Continental Airlines filed a federal lawsuit against nine former pilots making some very serious – yet very strange – accusations. Specifically, Continental alleged that the nine pilots entered into sham divorces in order to maximize their retirement benefits.

According to the compliant, the nine pilots all secured divorces in states where qualified domestic relations orders (QDROs) awarding the entirety or majority of their retirement savings (i.e., pensions) to their former spouses were handed down.

The compliant goes on to allege that the former spouses then turned around and demanded immediate and full payment of the retirement savings, a permissible action under federal law, which states that in divorce-related matters a person can collect pension benefits from their former spouse before he or she retires.

Continental claimed that these divorces were purely for show (some of the pilots remarried their former spouses) and performed for no other reason than the pilots wanting to maximize their pensions. Specifically, they feared that Continental would hand over its pension obligations to the federal government – a move that would result in significantly lesser benefits.

Interestingly, Continental’s lawsuit was recently dismissed by the 5th Circuit Court of Appeals, which upheld the decision of the lower federal court.

Specifically, the court held that Continental did not have the right to determine or investigate whether an employee’s divorce is real or not.

“[The decision] is a victory for employee privacy rights – nobody wants their employer looking into their divorce,” said Steve Mitby, an attorney representing five of the pilots.

Interestingly, the pilots – all of whom were either fired or resigned – have filed a lawsuit of their own in a Houston federal court, alleging that Continental unlawfully interfered with their pension rights and wrongful termination.

To learn more about dissolution of marriage or life after divorce, contact an experienced and skilled legal professional.

This post is for informational purposes only and is not to be construed as legal advice.

Stay tuned for more from our Ft. Worth family law blog …

Related Resources:

Pilots win ‘sham-divorce’ case against Continental (ABC News)