Megan K. Mechak
Wed., June 17, 2026
A 2024 class action lawsuit in federal court in Minnesota alleges that Sun Country, Inc. failed to properly fund retirement benefits for employees who took leave to perform military service. The case is Smith v. Sun Country, Inc., and it is pending in the District of Minnesota as Case No. 0:24-cv-00619-KMM-JFD.
Plaintiff Pilots Claim Airline Denied 401(k) Contributions Upon Return
The plaintiffs—two airline pilots—brought the case on behalf of similarly situated workers who participated in the company’s 401(k) profit-sharing plan. At the heart of the complaint is a straightforward allegation: that employees who stepped away from their civilian jobs to serve in the uniformed services were denied retirement contributions they were legally entitled to receive upon their return.
According to the complaint, Sun Country maintained a policy or practice of not making retirement plan contributions for periods when employees were on military leave. Because the company’s workforce—particularly pilots—often relies on fluctuating compensation tied to hours worked, the absence of contributions during these periods allegedly resulted in significantly reduced retirement savings. The plaintiffs claim that both the missed employer contributions and the lost investment growth on those contributions have caused long-term financial harm to affected employees.
Lawsuit Alleges USERRA and ERISA Violations Substantially Reduced Retirement Benefits
The lawsuit is grounded primarily in the Uniformed Services Employment and Reemployment Rights Act (“USERRA”), a federal law designed to protect the civilian employment rights of service members. USERRA requires that employees who leave their jobs for military service be treated as if they had remained continuously employed for purposes of pension benefits. That includes requiring employers to make retirement contributions based on the compensation the employee would have earned during the period of service—or, if that amount is uncertain, based on average prior earnings.
In addition to USERRA claims, the plaintiffs asserted multiple violations of the Employee Retirement Income Security Act (“ERISA”), which governs the administration of employee benefit plans. The complaint alleges that Sun Country and plan fiduciaries breached their duties by failing to follow the plan’s terms, which explicitly incorporated USERRA’s requirements, and by failing to take steps to collect or correct missed contributions. Under ERISA, fiduciaries must act prudently and solely in the interest of plan participants, and must ensure that plan assets—including amounts owed to the plan—are properly managed and protected.
The plaintiffs sought a range of remedies, including payment of all missed contributions, compensation for lost investment earnings, removal or replacement of fiduciaries, and other equitable relief designed to make the plan and its participants whole. On June 11, 2026, the parties notified the Court that they had reached a settlement, although the terms were not disclosed.
The case highlights a recurring issue in employment law: ensuring that those who serve in the military do not suffer economic disadvantages in their civilian careers. For employers, it also serves as a reminder that compliance with USERRA and ERISA is not optional—and that failures in this area can expose companies to significant class-wide liability.
If you are a civilian employee and believe that you suffered an economic disadvantage because of your military service, contact MSE at [email protected].
