A district court has ruled that American Airlines failed to prioritize the financial interests of its employees’ retirement funds by enabling fund managers to pursue environmental, social, and governance (ESG) investments.
The judgment came as part of a 2023 lawsuit filed against American Airlines and the company’s Employee Benefits Committee. The class action alleges that the defendants violated their duty of loyalty under the Employee Retirement Income Security Act, which requires that fiduciaries managing retirement investments must act in the best financial interest of the participants.
Defendants are alleged to have mismanaged their employee’s retirement assets—401(k) plans—when they hired investment managers pursuing ESG policies to handle the funds, especially BlackRock….