Continental Airlines is suing nine of its pilots, reports ABC News, claiming they faked divorces in order to draw down their pension funds before retirement. The airline became suspicious when some of the couples continued living together and all nine couples eventually reunited. Continental believes the pilots became worried about the safety of their pension funds, especially after seeing what’s happening at other airlines. [%comments]
A Profitable Divorce
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People divorce, or refrain from marriage, to protect Social Security and pension status; sometimes it’s necessary to divorce for health care reasons, credit problems, tax reasons, and who knows what else.
Invoke the law of unintended consequences. I would like to know who gave Continental or any other employer the right to determine the marital health of its employees. What’s their opinion on never-married co-habitants, or pilots who enjoy a wild bachelor/bachelorette lifestyle? How is this their business?
Why don’t they ask themselves why their employees do not trust the leadership’s ability to keep the company alive?
The pension is probably a benefit that gets divided between the spouses in a divorce, similar to all the other property. Rather than Continental end up paying each partner a separate amount, the divorcing couple cashes out and splits the cash. That way Continental doesn’t owe the spouse money 20 or 30 years later.
I don’t think they’re making a moral judgement at all.
A divorce settlement can be structured so that 100% of a spouse’s accrued pension benefits become payable to the other spouse when the divorce becomes final. I agree with Publius that what these folks did was grossly unethical, but if the state in which they divorced has no restriction on why a couple can get divorced, I don’t see where any law has been broken or, for that matter, where any sort of fraud has occurred.
If there are such restrictions, then they will have problems, as has been demonstrated in other cases like this, and there have been a lot of them. I had to chuckle at the idiot who said this is too complicated for pilots to think of, and the reporters clearly did almost no research; this exact scenario has played out – on a much larger scale – at at least two other airlines that I know of. Perhaps Captain Steve could discuss the issue.
I support Avi Rappoport’s position. They simply knew how to play the game well.
Nothing in the legal terms indicated they cannot divorce and remarry. If they wish to make a clause for future individuals that wish to do it, that’s fine. I see nothing wrong with what the couple did. This is tantament to finding an undervalued security that no one else discovered and profit when it blooms in a few weeks when everyone else discovers it and gains zero economic profit.
Publius,
The reason it might not be considered theft is that United did in fact owe them that amount of money.
It appears that the issue here is more the fact that the firms ought not to treat married and non-married employees differently–an alternative plan would allow employees to buy an annuity for a spouse/partner/family member of their choice at their expense out of their deferred income.
I have no sympathy for the corporations, they game the system to meet their needs over the needs of their employees all the time.
If you were worried that your pension benefits might at an time vanish, which is a very real concern, what would you do to protect your retirement income? These pilots are now underpaid and over worked, if you believe the hero of the Hudson, Captain Sullenberger.
If these couples legally filed for divorce and the courts accepted their actions then we now have the ethical problem of a corporation determining who is legally divorced, or sick, etc
There comes a time when the power of the corporations has to be reigned in and this looks like a good place to start.
@Publius #4
If Continental should be upset with anyone, it should be the overpaid lawyers who crafted this stumblebum agreement. It just does not comport with reality.
The attitude could be summed up by the attorney in the video. “You can’t expect (mere) pilots to come up with such a plan.”
By the way…I sense some sexism tone here. The assumption is that the pilots were men and the wives were chatel. Weren’t there any female pilots? Were the wives Continental employees too and didn’t they have a part to play in this? This has an oddly 1950′s flavor.