James P. Scanlan v. American Airlines Group, Inc.

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 22-3294
____________
JAMES P. SCANLAN; CARLA RINER,
individually and on behalf of all others similarly situated,
Appellants
v.
AMERICAN AIRLINES GROUP, INC.; AMERICAN
AIRLINES, INC.
____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 2-18-cv-04040)
District Judge: Honorable Harvey Bartle, III
____________
Argued on December 12, 2023
Before: BIBAS, PORTER, and FREEMAN, Circuit Judges
(Opinion filed: May 21, 2024)

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R. Joseph Barton
Colin M. Downes
Barton & Downes
1633 Connecticut Avenue NW, Suite 200
Washington, DC 20009
Peter Romer-Friedman
Jonathan E. Taylor [ARGUED]
Gupta Wessler
2001 K Street NW, Suite 850 North
Washington, DC 20006
Counsel for Appellants
L. Nicole Allan
O’Melveny & Myers
Two Embarcadero Center, 28th Floor
San Francisco, CA 94111
Anton Metlitsky [ARGUED]
Mark W. Robertson
O’Melveny & Myers
7 Times Square
Time Square Tower, 33rd Floor
New York, NY 10036
M. Tristan Morales
Jason Zarrow
O’Melveny & Myers
400 S. Hope Street, 18th Floor
Los Angeles, CA 90071
Counsel for Appellees

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Michael Heckmann
Jones Day
51 Louisiana Avenue NW
Washington, DC 20001
Counsel for Amicus Appellees
_______________
OPINION OF THE COURT
_______________
FREEMAN, Circuit Judge.
American Airlines pilots sued their employer for failing
to pay them and provide certain benefits while they were on
short-term military leave. They claim that the airline violated
the Uniformed Services Employment and Reemployment
Rights Act of 1994 (“USERRA”), which provides employees
on military leave the right to receive the same employment
benefits as other similarly situated employees. They also claim
that the airline breached their profit-sharing plan by failing to
account for imputed earnings during periods of military leave.
The District Court granted summary judgment for the
airline on all claims. We will affirm the judgment for the
airline on the breach of contract claim. But a trier of fact must
resolve disputed facts material to the USERRA claims, so we
will reverse the judgment for the airline on those claims and
remand for further proceedings.

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I
James P. Scanlan, a retired Major General in the United
States Air Force Reserve, and Carla Riner, a Brigadier General
in the Delaware Air National Guard, are pilots for American
Airlines.1 Together, they represent a class of pilots who took
short-term leave from their employment at the airline to
perform military duties between January 1, 2013 and October
31, 2021.2
The airline does not pay its pilots when they take
military leave. In contrast, it does pay pilots when they take
bereavement leave and jury-duty leave. It provides pilots three
days of paid bereavement leave upon the death of a qualifying
relative. And when pilots take leave for jury duty, the airline
pays them the difference between their jury-duty payments and
their airline compensation for the duration of the jury service.
The pilots are also part of the airline’s profit-sharing
plan. The plan vests a compensation committee and the
individuals it designates with discretion to interpret its terms.
The plan states that the airline shares five percent of its pre-tax
profits with employees based on each employee’s “Eligible
1 Defendants are American Airlines Group, Inc. (“AAG”) and
its subsidiary, American Airlines, Inc. (“AAI”). For
simplicity, we refer to them collectively as “the airline.”
However, AAG is the sole defendant for two claims, and AAI
is the sole defendant for the third claim.
2 For purposes of this action, short-term military leave is
defined as sixteen or fewer days. After sixteen days of leave,
an employee is removed from the airline’s payroll and
reinstated upon his return.

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Earnings.” App. 922. Eligible Earnings are based on the
employee’s “Compensation,” which is defined (in relevant
part) as “the sum of: . . . [a]mounts paid to an Employee for a
Plan Year . . . less: . . . [i]mputed income.” App. 937–38.
Simply put, “Compensation” is the amount reported on an
employee’s W-2 form. Because the airline paid the pilots
during jury-duty and bereavement leave, those payment
amounts were reported on the pilots’ W-2 forms and included
in their profit-sharing calculations. However, pilots received
no profit-sharing credit for military leave periods because the
airline did not pay them for those periods.
II
USERRA entitles employees who take military leave
“to such other rights and benefits . . . as are generally provided
by the employer of the person to employees having similar
seniority, status, and pay who are on furlough or leave of
absence.” 38 U.S.C. § 4316(b)(1)(B). It defines “rights and
benefits” as the “terms, conditions, or privileges of
employment, including any advantage, profit, [or]
privilege . . . that accrues by reason of an employment contract
or . . . employer policy, plan, or practice.” § 4303(2). We have
held that “‘rights and benefits’” . . . includes pay while on
leave.” Travers v. Fed. Express Corp., 8 F.4th 198, 208 (3d
Cir. 2021); id. at 199 (holding that employers must provide
compensation for military leave “when they choose to pay
other employees for comparable forms of leave”).
A regulation addresses how to implement USERRA’s
rights-and-benefits provisions. It states that, where benefits
vary depending on the type of leave, an employee on military
leave is entitled to “the most favorable treatment accorded to

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any comparable form of leave when he or she performs service
in the uniformed services.” 20 C.F.R. § 1002.150(b). It also
provides guidance about comparability:
In order to determine whether any two types of
leave are comparable, the duration of the leave
may be the most significant factor to compare.
For instance, a two-day funeral leave will not be
“comparable” to an extended leave for service in
the uniformed service. In addition to comparing
the duration of the absences, other factors such
as the purpose of the leave and the ability of the
employee to choose when to take the leave
should also be considered.
Id.
III
The pilots claim that the airline violated USERRA
§ 4316(b)(1) in two ways: (1) by failing to pay pilots for
periods of short-term military leave despite paying pilots for
periods of jury-duty and bereavement leave; and (2) by failing
to credit pilots under the profit-sharing plan for their imputed
earnings during periods of short-term military leave despite
crediting earnings from periods of jury-duty and bereavement
leave. They also claim that the airline breached its contractual
obligations (i.e., the terms of the profit-sharing plan) by
refusing to credit imputed earnings during periods of military
leave as compensable for profit-sharing calculations.3
3 The District Court certified a subclass for each claim.

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The airline moved for summary judgment on all three
claims, and the pilots cross-moved for summary judgment on
the breach of contract claim only. As to the USERRA claims,
the airline argued that short-term military leave is not
comparable to jury-duty leave or bereavement leave because
of differences in duration, frequency, purpose, and control over
when to take leave. Each side presented evidence about those
comparability factors.4
The parties agree on some of the relevant statistics.
During the class period, a single instance of short-term military
leave averaged about 3.3 days, while an instance of jury-duty
leave averaged 1.8 days and an instance of bereavement leave
averaged 2.7 days. The most common duration of both short-
term military leave and jury-duty leave was one day, while the
most common duration of bereavement leave was three days. 5
The parties also agree about the frequency with which
pilots took each type of leave. On average, pilots took short-
term military leave 7 times, jury-duty leave 1.3 times, and
bereavement leave 1.2 times annually. But pilots most
commonly used each type of leave once per year. And in any
given year, pilots took an average of 21.9 total days of short-
4 The pilots’ USERRA claim about profit sharing rises or falls
with their claim about paid leave. Both depend on whether
military leave is comparable to jury-duty or bereavement leave.
See White v. United Airlines, Inc., 987 F.3d 616, 620 (7th Cir.
2021).
5 A majority of each type of leave—65.2% of short-term
military leaves, 87.2% of jury-duty leaves, and 97% of
bereavement leaves—lasted between one and three days.

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term military leave, 2.3 total days of jury-duty leave, and 3.1
total days of bereavement leave.
Regarding the purpose of each type of leave, the parties
agree that bereavement leave serves dual purposes: it permits
pilots to grieve their loved ones, and it protects public safety
by giving pilots time away from the cockpit to grieve.
According to the pilots, jury-duty leave and military leave also
support a public purpose: civic duty. The airline agrees that
jury-duty leave fulfills a civic duty, albeit a compulsory one.
It also agrees that one purpose of military leave is civic duty,
but it contends that military duty primarily enables pilots to
have parallel careers with an airline and the military.
All agree that the pilots have little control over when
they take jury-duty and bereavement leave, but the parties
presented conflicting evidence about the pilots’ ability to
schedule their military leave. The pilots presented evidence
that they generally lack control over when they fulfill their
military duties and that their requests for schedule changes are
frequently denied. Scanlan testified that service members in
military flying units have less ability to control their training
schedules than other members of the military, and that short-
term military obligations generally arise on short notice. In
contrast, the airline presented evidence that pilots have a great
degree of control over scheduling their military service periods
to accommodate their civilian obligations and that the military
schedules duty periods in advance and with flexibility.
The District Court held that the pilots could not prevail
on their USERRA claims because short-term military leave is
not comparable to jury-duty or bereavement leave when
comparing duration, frequency, control, and purpose. It
reasoned that analyzing “the frequency of military leave, along

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with duration, is necessary to have a complete picture.” App.
17. When it conducted that joint duration-and-frequency
analysis, it found “a distinct difference among the three types
of leave not only in the average time away from the job in a
year but also in the fact that a pilot’s military leave generally
recurs on a regular basis and often over a number of years[,]
while the other forms of leave are generally short-term and
sporadic.” App. 18.
As to purpose, the Court found that “it cannot be
disputed that the purposes of the three types of leave are
different.” App. 22. It explained that, unlike jury-duty and
bereavement leave, pilots take military leave “not only out of
a sense of patriotism but also for more than minimal
compensation from the Government.” App. 22. As to control,
the Court found that pilots “often have significantly more
flexibility in scheduling military leave than they do with
respect to jury duty and bereavement leave.” App. 21.
Because it found none of the factors comparable, the District
Court granted summary judgment for the airline on the
USERRA claims.
Turning to the breach of contract claim, the Court
concluded that, under Texas law, the profit-sharing plan
unambiguously excludes imputed income from periods of
military leave. It granted summary judgment for the airline on
this claim and denied the pilots’ cross-motion for summary
judgment.
IV
The District Court had subject-matter jurisdiction over
the USERRA claims under 38 U.S.C. § 4323(b)(3) and 28
U.S.C. § 1331. It exercised supplemental jurisdiction over the

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breach of contract claim under 28 U.S.C. § 1367(a). We have
jurisdiction under 28 U.S.C. § 1291.
We review a district court’s grant or denial of summary
judgment de novo. Pichler v. UNITE, 542 F.3d 380, 385 (3d
Cir. 2008). We apply that same standard to questions of
contract construction. John F. Harkins Co. v. Waldinger
Corp., 796 F.2d 657, 659 (3d Cir. 1986).
Summary judgment is appropriate where “there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
There is a genuine factual dispute “if the evidence is such that
a reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). We “view the facts in the light most favorable to the
nonmoving party[] [and] draw[] all inferences in its favor.”
Daubert v. NRA Grp., LLC, 861 F.3d 382, 388–89 (3d Cir.
2017).
V
Comparability is critical to the pilots’ USERRA claims.
The pilots contend that short-term military leave is comparable
to jury-duty leave or bereavement leave. For types of leave to
be comparable, they must be similar. Cf. United States v. 84.4
Acres of Land, More or Less, 348 F.2d 117, 119 (3d Cir. 1965)
(determining whether properties are comparable to the
condemned property based on whether they are “sufficiently

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similar”). This is a question of fact.6 So unless no reasonable
jury could find the types of leave to be similar, the
comparability question must go to a jury. See Care One Mgmt.
LLC v. United Healthcare Workers E., 43 F.4th 126, 148 (3d
Cir. 2022) (noting that where the record “is not conclusive on
[an] issue[,] . . . [it] is a question of fact that a jury should
decide”).
Here, viewing the evidence in the light most favorable
to the pilots, a reasonable jury could find that short-term
military leave is comparable to jury-duty leave or bereavement
leave based on the three factors mentioned in the implementing
regulation, and any other factors it may consider.
Duration. A reasonable jury could conclude that the
types of leave are comparable because the average duration of
a single instance of each type of leave is between 1.8 and about
3.3 days, or because the most common duration is between one
and three days. The District Court held that it must consider
frequency alongside duration, but that is not required by
§ 4316(b)(1) of USERRA or the implementing regulation. The
regulation provides a non-exhaustive list of comparability
6 See Syufy Enters. v. Am. Multicinema, Inc., 793 F.2d 990,
1003 (9th Cir. 1986) (“Comparability is a question of fact.”).
We have not previously said this directly, but we now join our
sister Circuits who have. See United States v. 125.07 Acres of
Land, More or Less, 667 F.2d 243, 252 n.18 (1st Cir. 1981);
United States v. Certain Ints. in Prop., 326 F.2d 109, 113 (2d
Cir. 1964); United States v. 2,635.04 Acres of Land, More or
Less, 336 F.2d 646, 649 (6th Cir. 1964); United States v.
819.98 Acres of Land, More or Less, 78 F.3d 1468, 1472 (10th
Cir. 1996).

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factors. 20 C.F.R. § 1002.150(b) (“In addition to comparing
the duration of the absences, other factors such as the purpose
of the leave and the ability of the employee to choose when to
take the leave should also be considered.” (emphasis added));
Google LLC v. Oracle Am., Inc., 593 U.S. 1, 19 (2021) (noting
that the words “such as” indicate the list is not exhaustive).
Accordingly, a jury may consider non-enumerated factors such
as frequency. But the jury alone is tasked with determining
how much weight to give any factor that it considers. And on
this record, we cannot discount the weight of duration as a
stand-alone factor in support of comparability.7
Purpose. A reasonable jury reviewing the evidence in
this case could conclude that jury-duty leave and military leave
have a common purpose: civic duty. Indeed, the parties agree
that those two types of leave both entail performing a public
service. Of course, there is also evidence of differences: jury
duty is compulsory while military duty is not, and jury-duty
pay is minimal in comparison to military pay. But only a jury
can decide how to weigh those distinctions in a comparability
7 In Clarkson v. Alaska Airlines, Inc., the Ninth Circuit
recognized that USERRA’s implementing regulation permits
consideration of unenumerated factors such as frequency, but
it held that frequency cannot be considered “an integral part of
the duration analysis.” 59 F.4th at 436. It reasoned that
including frequency in the duration would undermine the
purpose of USERRA. Id. (discussing USERRA’s purpose of
protecting reservists during their frequent absences from
work). We decline to hold as a matter of law that a jury may
not consider frequency alongside duration. The jury must
decide how to weigh the comparability factors, including
whether any factor offsets another.

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analysis. Similarly, only a jury can decide how to weigh the
evidence that military leave and bereavement leave share a
public purpose.
Control. Viewing the evidence in the light most
favorable to the pilots, a jury could conclude that—as with
pilots who take jury-duty or bereavement leave—most pilots
who take military leave lack the ability to control their
schedules.
In sum, a jury could conclude that short-term military
leave is comparable to jury-duty or bereavement leave.
Therefore, we will reverse the grant of summary judgment on
the USERRA claims.
VI
On the breach of contract claim, we agree with the
District Court that the profit-sharing plan excludes imputed
income from periods of military leave. Texas law governs this
contract dispute, and it requires us to construe contracts
according to their express language. El Paso Field Servs., L.P.
v. MasTec N. Am., Inc., 389 S.W.3d 802, 805–06 (Tex. 2012).
If a “contract’s language can be given a certain or definite legal
meaning or interpretation, then the contract is not ambiguous
and we will construe it as a matter of law.” Id. at 806.
Additionally, “[w]here an employer retains the right to
interpret and change an incentive compensation plan, the
employer’s interpretation must stand unless the employer acted
in bad faith.” Kern v. Sitel Corp., 517 F.3d 306, 309 (5th Cir.
2008) (applying Texas law). A company may delegate to an
agent the authority to interpret a plan, and “[n]o particular
language is necessary for an effective delegation of
performance.” Mauldin v. Worldcom, Inc., 263 F.3d 1205,

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1213 (10th Cir. 2001) (applying Texas law) (citation omitted).
Bad faith may be established by “unreasonable requirements,”
standards that are “more strict than those applied to others
similarly situated,” or “an adverse decision which has no basis
in fact.” Marsh v. Greyhound Lines, Inc., 488 F.2d 278, 280
(5th Cir. 1974) (applying Texas law).
The profit-sharing plan expressly excludes imputed
income from the “Compensation” calculations. App. 937–38
(defining “Compensation” as “[a]mounts paid to an Employee
for a Plan Year . . . less: . . . [i]mputed income”).8 We may
rely on the airline’s interpretation of the plan because the pilots
have not demonstrated that the airline interpreted it in bad faith.
From its inception, the airline has interpreted the profit-sharing
plan to credit only W-2 wage income and not imputed income.
8 The pilots argue that a different section of the plan (section
3.5) modifies the definition of “Compensation,” rendering the
term ambiguous. Section 3.5 provides, “Notwithstanding any
other provision of the Plan to the contrary, contributions,
benefits and service credit with respect to qualified military
service shall be provided in accordance with [Internal
Revenue] Code section 414(u).” App. 957–58. But even if the
definition of “Compensation” were ambiguous, the airline’s
interpretation prevails under Texas law because the profit-
sharing plan makes the airline’s interpretation final. See Macy
v. Waste Mgmt., Inc., 294 S.W.3d 638, 648 (Tex. App. 2009)
(holding that the only way to attack an employer’s
determinations that are stated to be final under a profit-sharing
plan is by showing bad faith or fraud); Kern, 517 F.3d at 311
(honoring the employer’s interpretive rights where the
employer did not act in bad faith when it rendered an erroneous
interpretation of a plan’s term).

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See Kern, 517 F.3d at 312 (holding that a contract
interpretation did not constitute bad faith in part because the
employer consistently adopted that interpretation). And while
the record contains little evidence of precisely who interpreted
the plan, the compensation committee or one of its designees
has always been charged with this task. So we may defer to
the airline’s interpretation of the plan and read
“Compensation” to exclude income imputed while on military
leave.
* * *
For these reasons, we will reverse the District Court’s
summary judgment for the airline on the USERRA claims and
remand for further proceedings on those claims. We will
affirm the summary judgment for the airline on the breach of
contract claim.

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