WASHINGTON (AP) - American Airlines has agreed to settle a class action lawsuit brought by more than 350 pilots who said they were unfairly penalised by being barred from accruing vacation time and sick days while on military leave, the Justice Department announced yesterday.

If accepted by US District Court in Dallas, the settlement will force the nation's largest commercial airline to pay the pilots a total of $345,772 - averaging just under $1,000 for each. It also will require American Airlines to pay its currently employed pilots $215,000 worth of sick leave credits.

American Airlines had no immediate comment yesterday morning.

The Justice Department, which filed the lawsuit on the pilots' behalf in 2006, said it will now monitor the airline for three years to make sure new policies are put in place to guarantee pilots will not lose benefits when called to military duty.

"No member of the military should be disadvantaged for choosing to serve our country and for answering the call of duty," Attorney General Michael Mukasey said in a statement.

The class action suit was the first brought by Justice Department civil rights attorneys under a law protecting the employment rights of military service members, acting Assistant Attorney General Grace Chung Becker told reporters in Washington.

All of the 353 pilots involved were called away only for short periods of time - usually 16 days or less - for training or other reservist duty, Ms Becker said. Still, American did not let them build up their owed time off - even though pilots on short leave for jury duty could, she said.

"You have someone taking generally a shorter term leave who is being treated differently from other pilots who are taking nonmilitary leave," Ms Becker said.

Pilots who took more than 16 days of military leave were covered by collective bargaining agreements with the airline, Ms Becker said. She said she was pleased with the settlement, noting that the law does not allow the Justice Department to seek punitive damages.