A Texas federal district court ruled that American Airlines breached its fiduciary duty of loyalty, but not its fiduciary duty of prudence, in allowing its $26 billion 401(k) plan to be influenced by environmental, social, and governance (“ESG”) policies unrelated to the best interests of participants.
Judge Reed O’Connor found American Airlines fulfilled its duty of prudence and the airlines’ processes were “consistent with and, in many aspects, exceeded the processes of other fiduciaries.”
However, O’Connor said American Airlines acted disloyally.
The damages for the case are yet undetermined, but I expect an appeal.
