A federal judge in Texas said Friday that American Airlines violated federal law by basing investment decisions in its employee retirement plans on environmental, social and other non-financial factors.
The ruling by U.S. District Judge Reed O'Connor is believed to be the first of its kind, amid growing conservative opposition to the rise in socially conscious investing.
Mr. O'Connor said that by allowing American's asset manager and majority shareholder, BlackRock, to focus on environmental, social, and corporate governance (ESG), American Airlines is focusing solely on the economic interests of its 401(k) plan beneficiaries. It said it breached its legal obligation to make investment decisions based on )factor.
“The evidence revealed that [American’s] “His incestuous relationship with BlackRock and BlackRock's own corporate goals had a disingenuous influence on the operation of the program,” wrote O'Connor, who was appointed by former Republican President George W. Bush.
A judge handed down the ruling after a four-day non-jury trial in June in a class action lawsuit brought by American pilot Brian Spence on behalf of more than 100,000 participants in a retirement plan. did.
American Airlines did not immediately respond to a request for comment.
BlackRock is not involved in the lawsuit.
