by James Lynch
National Review
American Airlines violated federal law by putting employees retirement plans towards investment companies with environmental, social, and governance products, a judge ruled Friday, marking a major win for opponents of the progressive investing philosophy.
Texas federal judge Reed O’Connor found that American Airlines violated its fiduciary duty of loyalty under the Employee Retirement Security Act by hiring BlackRock to manage its $26 billion 401(k) plan. He did not conclude that American Airlines violated its duty of prudence because the company acted in accordance with industry practices.
O’Connor’s decision followed a four-day, non-jury trial, Bloomberg Law reported on Friday. The group of plaintiffs, led by pilot Bryan Spence, filed a lawsuit in 2023 over the airline arguing that American Airlines violated its fiduciary duty by hiring BlackRock, an investment manager that focuses on political agendas in addition to financial returns…
“This decision should put the fear of God in anyone doing ESG investing without the express permission of beneficiaries. Any company, investment manager or fiduciary who has a loss because of ESG investing will be red meat for trial lawyers,” said Steve Milloy, a senior fellow at the energy and environment legal institute.
