LoneStarMike

And apparently, neither did the judge, at least as far as the law was concerned.

Judge tosses out Continental Airlines suit claiming 9 pilots got sham divorces

Continental is considering an appeal.

KChar

I wonder what would happen if one of the spouses decided they didn't want to get remarried after all?

GoGiants

Sounds like "Shenanigans" to me.

Billiken

Like another poster said, people get divorced and re-married to one another all the time.

Tough to prove that this was a scam.

channa

That's not it. If you read the statement, "U.S. District Judge Gray Miller said he can't condone the pilots' alleged actions. But he ruled that the law doesn't allow Continental's pension administrator to consider the employees' motivation for getting divorced in deciding whether to distribute benefits."

In other words, it doesn't matter if it was a sham divorce, that's irrelevant. The rules are the rules, and if you get divorced, the plan says they can get paid. It doesn't matter why they divorced. In fact with his "can't condone" remark, the judge is more or less admitting he thinks these are shams, but again, it doesn't matter.

Kudos to the pilots who figured this out. For once the little guy figured out how to stick it to big business.

jadenus

I would guess that the ex-spouse would keep the pension. The pilot probably wouldn't want to remarry that person anyway, if he/she thought about not remarrying in order to keep the money. That reminds me of the old joke.
Why is divorce so expensive?
Because it's worth it.

gulfstreamceo

This is very similar to the "Fire and Rehire" "retire and rehire" that went on for years with teachers getting access to there retirement funds. It was very common for a public school system to fire or retire a teacher one week she would then have access to pension and then perform a rollover of the funds. only to be rehired next week. This happened very frequently here in Texas. I used to perform this transaction at one point in my career.

channa

And just like divorce, "We didn't know we'd eventually work everything out and get back together," the teachers can use budget/funding as the excuse, "Funding never came through for next fiscal year, so we had to do the prudent thing and cut our staff and plan for larger classes. Of course, a couple weeks later when funding came in, we had to rehire the people we let go."

Fire and rehire is not uncommon in business -- many companies lay off people and then rehire them as circumstances change. Though in private industry there often isn't a pension implication to deal with.

TigerWould

+1

from my reading I came to the exact same conclusion.

jpsboo

The Big Boys have been chopping away for so long at the employees' pay, benefits, and pension; I say- Good for the pilots!! Wish more pilots had figured this out and done the same thing. As you said, nothing is said in the plan about "why" the divorce is done, just that there is a divorce.

If CO's lawyers are too stupid to account for this inevitability, that's their own damn fault.

channa

Not only that, but having that kind of money tied up against an airline is risky at best. Look at what happened to the pre-BK UA pensions.

If the legal structure of a pension allows a company to hold onto one's retirement funds like that, and your own financial security and well being is predicated on your company's success in a decade or more, you can't blame someone from trying to work the system to get the cash out of the "risky" company holding and into their bank account as quickly as possible.

So the real motive here is likely not to defaud the airline, rather it's to keep one's retirement benefits in tact. Realistically, the whole pension funding/security system needs to be reviewed. If the pensions were secure and guaranteed, then there would be far less motivation to use these sorts of work-arounds.

McHugh

The way most pensions work, using sham divorces to pull money form the plan is more likely to harm the other pension beneficiaries (i.e., fellow pilots) than harm Continental.

Steph3n

that is correct, the other pilots are being harmed by it.

jpsboo

And that is what pisses me off- that these guys are now the "bad" guys. Yes, the 9 pilots were "morally wrong". But, you know what? Continental is "morally" wrong! But in business, morally wrong doesn't count. As long as it is legal, then anything goes. Screw everyone. That's why I am for these pilots getting one over on the MAN.

I see it that Continental took their pensions, screwed these guys out of their retirement, and these few pilots found a way to get a little bit of that back. CO screwed the pilots. Well, not these pilots. I'm GLAD these guys figured out how to stick it to corporate.

Weatherboy

Agreed here --Continental isn't being harmed by those 9 pilots, all of the pilots that work for Continental and participate in the plan are.

This is more about "sticking it to your co-worker" than "sticking it to Big Business" here.