Thursday, November 4, 2004
Employees who got lifetime travel passes as part of their retirement benefits from now-defunct TWA Airlines may have a breach of contract claim against American Airlines, which purchased TWA’s assets out of bankruptcy, according to a federal district court in Delaware. The employees had no right to the passes under the bankruptcy sale, but claimed that American had unilaterally made a subsequent promise to maintain the benefit, ostensibly to gain the cooperation of the labor unions. The airline argued that there was no consideration for a unilateral promise to those already retired.
Judge Joseph Farnan, while expressing some doubt that the elements of an enforceable contract had been pleaded, nevertheless refused to dismiss, instead permitting the plaintiffs to take further discovery. Frazier v. American Airlines, Inc., 2004 U.S. Dist. LEXIS 19875 (D. Del. Sept. 30, 2004).