Returning military reservist allowed to invoke USERRA “escalator principle” for failure to reinstate into higher-level job

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The federal First Circuit Court of Appeals in Rivera-Melendez v. Pfizer considered a returning veteran’s claim that Pfizer violated the “escalator principle” that is a unique element of the federal Uniformed Services Employment and Reemployment Rights Act (“USERRA”). Unlike other forms of leave that require reinstatement after the leave into the same or comparable position, the USERRA escalator principle requires reinstatement of an employee returning from military service into the position s/he would have been employed if his/her continuous employment had not been interrupted by military service. Rivera-Melendez, a navy reservist, was employed by Pfizer when he was called to active service and served a year in Iraq. Upon his return, Pfizer reinstated him in an “API Service Coordinator” position, comparable to the position he held before his military service. In his lawsuit, he alleged that under the escalator principle, he should have been reinstated into a higher-level “API Group Leader” position. Rivera-Melendez asserted that Pfizer would have promoted him into the Leader position had his employment not been interrupted by military service. The lower court dismissed the suit on the ground that the escalator principle only applied to promotions that were “automatic,” and that a promotion to Leader was “discretionary” on the part of Pfizer management. Rejecting the lower court’s “automatic” versus “discretionary” dichotomy, the court held that the proper inquiry was not whether a promotion was automatic, but “whether it was reasonably certain that the returning servicemember would have attained the higher position but for his absence due to military service” and that a jury must decide this issue. Interestingly, the court also observed that the “escalator” does not run in only one direction, i.e., depending on the circumstances, the escalator may cause an employee to be reemployed in a lower position, or even laid off or terminated if the employee would have been laid off or terminated had the employment not been interrupted by military service.