Labor & Employment Law Daily Wrap Up, USERRA, VETERANS—N.D. Cal.: Court grants preliminary approval of $18.5 million settlement of USERRA leave claims against Southwest Airlines, (Dec 12, 2025)

By Ronald Miller, J.D.

To approve a proposed settlement, a court must be satisfied the parties “have engaged in sufficient investigation of the facts to enable the court to intelligently make... an appraisal of the settlement.”

A federal district court in California granted preliminary approval of a $18.5 million settlement of a class action lawsuit arising under USERRA, which alleged that Southwest Airlines had a policy of refusing to provide paid leave for short-term military leave in violation of USERRA, while providing paid leave for other comparable short-term absences from work. The court determined that the settlement appeared to be the product of serious, informed, non-collusive negotiations. While the court had concerns regarding $25,000 service awards because they were substantially higher than amounts typically awarded, it decided to defer ruling on the appropriateness of the amount requested until final approval. Further, the settlement was within the range of possible approval (Huntsman v. Southwest Airlines Co., No. 3:19-cv-00083-JSC (N.D. Cal. Dec. 11, 2025)).

An employee filed a class action lawsuit against Southwest Airlines alleging that the employer’s policy of refusing to provide paid leave for periods of short-term military leave violates USERRA because Southwest provides paid leave for other comparable short-term absences from work. After five years of litigation, the parties reached a class action settlement and now seek preliminary approval of the settlement.

The agreement defines the settlement class as all current or former employees of Southwest Airlines who, during their employment with the airline at any time from October 10, 2004, through January 1, 2026, had taken short-term military leave from their employment with Southwest (i.e., military leave that lasted 14 days or fewer) and were subject to a CBA.

Payment terms. Under the settlement agreement, Southwest will pay $18,500,000. The named plaintiff sought the following distributions from the cash settlement amount: (1) attorneys’ fees of up to one-third ($6,105,000); (2) litigation expenses of $707,314.30; (3) service awards for the named-plaintiffs of $25,000 each; and (4) settlement administration costs of no more than $17,500. The plan of allocation contemplates the settlement proceeds will be divided between class members pro rata based on the amount of their claim, which is based on their rate of pay and dates of short-term military leave.

Scope of release. In addition to the monetary settlement, beginning in 2026, Southwest will provide service member employees with up to 10 days of paid short-term military leave per calendar year. Class members who do not opt-out of the settlement will release Southwest from all claims or causes of action, whether in law or equity, whether known or unknown, that were or could have been pled based on the identical factual predicate in the complaint. The Class Representatives also expressly waived all claims under California Civil Code 1542.

Preliminary approval of settlement agreement. Before a district court approves a class action settlement, it must conclude the settlement is “fundamentally fair, adequate and reasonable.” In determining whether a class action settlement agreement meets this standard, the court may consider several factors.

The court must also undertake an additional search for more “subtle signs that class counsel have allowed pursuit of their own self-interests and that of certain class members to infect the negotiations.” The Ninth Circuit has identified three such signs: (1) when counsel receive a disproportionate distribution of the settlement, or when the class receives no monetary distribution but class counsel are amply rewarded; (2) when the parties negotiate a “clear sailing” arrangement providing for the payment of attorneys’ fees separate and apart from class funds, which carries the potential of enabling a defendant to pay class counsel excessive fees and costs in exchange for counsel accepting an unfair settlement on behalf of the class; and (3) when the parties arrange for fees not awarded to revert to defendants rather than added to the class fund.

Settlement process. To approve a proposed settlement, a court must be satisfied the parties “have engaged in sufficient investigation of the facts to enable the court to intelligently make... an appraisal of the settlement.” Courts have “an obligation to evaluate the scope and effectiveness of the investigation plaintiffs’ counsel conducted prior to reaching an agreement.”

Here, the settlement was reached on a fully developed record after several years of discovery. Over this time, class counsel obtained and reviewed thousands of pages of discovery, volumes of electronic data from both Southwest and the Department of Defense, responses to six sets of interrogatories and 44 requests for admission. The settlement thus appears the product of serious, informed, non-collusive negotiations. Accordingly, this factor weighed in favor of approval.

Lack of preferential treatment. The court next considered whether the settlement agreement provided preferential treatment to any class member. The only preferential treatment was the service award for the named-plaintiff and a class representative. The court had concerns regarding the $25,000 service awards sought here as it was substantially higher than amounts typically awarded by courts in the Ninth Circuit. However, the court decided to defer ruling on the appropriateness of the amount requested until final approval. At this stage, there was no indication the service awards in general constituted “preferential treatment” such that it would defeat preliminary approval.

Range of possible approval. The third factor the court considers is whether the settlement is within the range of possible approval. To evaluate whether the settlement amount is adequate, “courts primarily consider plaintiffs’ expected recovery balanced against the value of the settlement offer.”

The settlement agreement provides for a settlement fund of $18.5 million. Some 2,791 class members have been identified, and if the settlement were distributed equally, the net average would be $4,421 per class member. Plaintiff’s counsel contends this per-class-member recovery is within the range of other USERRA class settlements. There were risks of continued litigation including decertification as that motion remained pending when the case settled. Under these circumstances, the court agreed the risks and costs of continued litigation balanced against the relief here warranted preliminary approval.

Obvious deficiencies. Finally, the court considered whether there existed any obvious deficiencies in the settlement agreement. This factor weighed in the employee’s favor as no obvious deficiencies existed on the face of the settlement agreement.

Having weighed the relevant factors, the court preliminarily found the settlement agreement was fair, reasonable, and adequate, and granted preliminary approval.

The case is No. 3:19-cv-00083-JSC.

Judge: Corley, J.

Attorneys: Michael Scimone (Outten and Golden) for Jayson Huntsman. Brian D, Berry (Morgan, Lewis & Bockius) for Southwest Airlines Co.

Companies: Southwest Airlines Co.

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