American Airlines 401(k) Suit Over ESG Following Uncharted Path

A new lawsuit challenging American Airlines Group Inc. over its ESG 401(k) investment options presents a novel legal attack against the Biden administration’s embattled do-good investing rule, but it may prove a difficult case for plaintiffs to win.

A pilot for the airline filed the proposed class-action complaint in the US District Court for the Northern District of Texas late last week. It appears to be the first lawsuit of its kind alleging private-sector retirement plan fiduciary misconduct over environmental, social, and governance investment returns.

ESG retirement investing has emerged as a political flash-point. Advocates, including some major asset managers, ...