The Uniformed Services Employment and Reemployment Rights (“USERRA"), 38 U.S.C. §4301 et seq., sets forth the rights and obligations of employees and employers with respect to military service leave. The Department of Defense has also promulgated regulations interpreting and implementing the statutory obligations of the parties. See 32 C.F.R. §104 et seq. The Federal Office of Personnel Management has issued a separate body of regulations governing the USERRA rights and obligations of federal employees. See 5 C.F.R. Part 353 et seq.
USERRA was enacted in 1994 as an amendment to the Veterans Benefits Improvement Act. The Veterans Benefits Improvement Act, amended in 1996, 1998, 2000, 2001 and 2004, provides job protection for veterans returning to their jobs without any loss of seniority, status or pay. The Act prohibits employers from denying veterans initial employment, reemployment, retention in employment, promotion, or any other benefit of employment because of their former military service. This article summarizes the elements of a USERRA claim and explains how employers can avoid violating the Act.
1. Notice of Military Leave
The term "employer" under USERRA means any person, institution, organization, or other entity that pays salary or wages for work performed or that has control over employment opportunities, and includes a person or entity to which the employer has delegated the performance of employment-related responsibilities. Thus, there can be individual liability for violations of the Act. USERRA applies to all employers, regardless of size or number of employees. Unlike many other federal laws, there is no exception or exemption for smaller employers.
USERRA requires that employees provide their employers with notice of pending military duty. The Act recommends that employees provide written notice and give employers at least 30 days notice prior to leaving. The Act waives the notice requirement if there is a military necessity, or if it is otherwise unreasonable or impossible for the employee to provide notice under the circumstances.
2. Returning to Work
When the employee returns to work, USERRA's provisions place certain time limits on the returning employee’s return dates, depending upon the length of the employee's military absence. For instance, if the employee serves from one to 30 days, he must report to work at the beginning of the next regularly scheduled work period on the first full day following the completion of service. When an employee is absent from work for 31 to 180 days for military service, the employee must submit an application for employment within 14 days after the completion of their service. Again, an exception exists where it is impossible or unreasonable, through no fault of the employee, to apply within 14 days.
For military service of more than 180 days, the employee must file an application for reemployment within 90 days after completing her service. If an employee is hospitalized for or convalescing from, an injury or illness either incurred or aggravated during his military service, he is not required to follow the re-application procedures until he has recovered from this illness or injury. The law does place a time limit on re-application in this circumstance of two years, although it allows extensions to accommodate circumstances beyond the employee's control.
a. Maximum Limit
USERRA military leave has maximum limits. An employee may not exceed a cumulative total of five years of military leave. There are exceptions to this limit. For example, USERRA grants an extension to an employee's service that is required beyond five years to complete her initial period of obligated service, such as an enlistee in the Navy's nuclear power program whose initial period of active duty is six years. USERRA also recognizes an exception when an employee's military service is pursuant to an order to remain on active duty due to war or national emergency declared by the President or Congress.
b. Disqualifying Service
There are four categories of circumstances where an employee's separation from the military will cause the employee to lose USERRA protection: (1) dishonorable or bad conduct discharge; (2) separation from service under "other than honorable" conditions, as defined by each military branch; (3) dismissal of commissioned officer in situations involving a court martial or by order of the President in time of war; and (4) being dropped as a service member for absence without authority for more than three months or imprisonment by a civilian court.
c. Reemploying the Returning Service Member
Except for those situations in which a service member has a disability incurred during or aggravated by military service, the method for reinstating an employee is based upon length of service. Employees who are absent from one to 90 days must be promptly reinstated in the following order of priority:
in the position the employee would have occupied had he remained continuously employed, so long as the employee is qualified for the job or can become qualified for the job after reasonable efforts by the employer to qualify him (i.e. - refresher training, etc.); or
if the employee cannot become qualified for the position in option 1, in the employee's pre-service position, so long as the employee is qualified for the job or could become qualified after reasonable efforts by the employer; or
if the employee cannot become qualified for the positions in either option 1 or 2, then in any other position which is the nearest approximation of option 1 for which the employee is qualified, with full seniority.
Employees who have been absent for more than 90 days must be promptly reinstated in the following order of priority:
in the position the employee would have occupied had he remained continuously employed, or a position of equal seniority, status and pay so long as the employee is qualified for the job or can become qualified after reasonable efforts by the employer to qualify the employee; or
if the employee cannot become qualified for the position in option 1, in the employee's pre-service position or a position of equal seniority, status and pay, so long as the employee is qualified for the job or could become qualified after reasonable efforts by the employer; or
if the employee cannot become qualified for the positions in either option 1 or option 2, then in any other position that is the nearest approximation of option 1 for which the employee is qualified, with full seniority.
The main difference between these two sets of options is that with employees who are absent for more than 90 days, the employer may offer a position of equal seniority, status and pay to employees falling into either option 1 or 2. Additionally, the reemployment position with the highest priority in both schemes reflects the "escalator" principle, which requires that each returning service member step back onto the seniority "escalator" at the point the employee would have occupied had he remained continuously employed.
A different set of rules apply for employees who incur or aggravate an injury or illness during their military service. Employers must follow a three-part reemployment plan for these employees. Employers must make reasonable efforts to accommodate these employees’ disabilities so that they can perform the job they would have held had they remained continuously employed. If, however, despite efforts, the employees are not qualified to do the jobs due to their disabilities, the employees must then be given positions of equal seniority, status and pay, so long as the employees are qualified for the jobs or could become qualified after reasonable efforts by the employers. If the employees do not become qualified under either of these options, then they must be employed in positions that, consistent with the circumstances of their situations, most nearly approximate the jobs in option 2 in terms of seniority, status and pay. Again, the provisions of USERRA seek to return the returning employees to their former positions with the least impact upon their employment.
If two or more returning employees are entitled to reemployment in the same position, the employee who left the position first has the superior right to it. The other employee is entitled to employment with full seniority in any other position that provides similar status and pay in the order of priority under the reemployment plan, which is otherwise applicable to that person.
d. Changed Circumstances and Undue Hardship
USERRA recognizes the employment situations may change substantially. Where an employer's circumstances change so much that reemployment of the employee is impossible or unreasonable, such as in a reduction in force that would have included the service member had he been at his job, the employer has no obligation to reemploy the employee. Employers are excused from making efforts to return a qualified service member or from accommodating those with service-related disabilities when doing so would cause undue hardship. In both of these situations, courts are to liberally construed USERRA in favor of returning service members. Therefore, employers need to be careful in invoking these provisions.
e. Pensions and Benefits
USERRA's provisions regarding returning employees' benefits require that the employer place the returning service member in the place he would have been had he remained continuously employed. Thus, service members who return to employment are entitled to the seniority with the employer which they would have retained with reasonable certainty had they remained continuously employed. USERRA specifies that returning service members are also entitled to all "rights and benefits based on seniority," meaning that they receive benefits based on length of service with the employer. The Act further provides that because employees on military leave are considered to be on a leave of absence with the employer, they must be granted all the rights and benefits not based on seniority that are available to employees who take non-military leaves of absence, whether paid or unpaid. If there is a variation among types of non-military leaves of absence, the service member must be granted the most favorable treatment under the leave policies. Thus, for example, if an employer's leave under the Family and Medical Leave Act (“FMLA”) specifies that employees will continue to accrue vacation and sick leave during their FMLA leave, the employer must grant its service members this benefit.
The Department of Labor has issued a Memorandum setting forth its position on the accrual of FMLA leave while an employee is under USERRA coverage. The Department of Labor takes the position that employees who serve in the military after September 11, 2001 should have their active duty counted toward their eligibility for FMLA leave. That is, the months and hours an employee would have worked but for the military service should be combined with months and hours actually worked to meet the 12 months and 1250 hours of employment necessary to qualify for FMLA leave.
Under USERRA, an employer may require the employee to pay the cost of any funded benefit to the extent that other employees on other leaves of absence would be required to pay such a benefit. With respect to pension plans which are tied to seniority, USERRA requires that a reemployed service member be treated as not having incurred any break in service with the employer, that military service be considered work for purposes of vesting and benefit accrual, that the employer be liable for funding any resulting obligation and that the reemployed person be entitled to any accrual of benefits from employee contributions only to the extent that he repays the employee contributions. The employee has five times his military leave to make the contributions. Again, this provision is further evidence that USERRA seeks to treat returning employees as if they never left their employment. With respect to vacation time accrued before the beginning of their military service, USERRA provides that employers permit service members to use their vacation time, rather than take their military leave without pay. While employers may do this at employees’ request, employers cannot force service members to use their vacation time for military service.
For health benefits, USERRA provides for continuous health benefit coverage for employees on military leave, even if their employers are not covered by COBRA. If an employee’s health plan coverage would end due to military leave, the employee may continue to receive coverage for either: a) up to 24 months after the employee’s absence begins or b) for the employee’s period of service plus time to apply for reemployment, whichever period is shorter. This period was increased from 18 months to 24 months by the Veterans Benefits Improvement Act. The employee cannot be required to pay more than 102% of the full premium for coverage, and if the military service is 30 or fewer days, the employee cannot be required to pay more than the normal employee share of any premium.
f. Prohibition of Discrimination
USERRA's provisions regarding discrimination impose a "just cause" requirement on the employer under certain circumstances. Under USERRA, a reemployed service member may not be discharged without cause for one year after the date of reemployment if the employee's military service was for more than six months. If the military service was for 31-180 days, the employee may not be discharged for six months after the date of reemployment. Employers are not required to apply a just cause standard to employees who use 30 or fewer days of military leave.
USERRA prohibits discrimination against returning service members because of their military service or obligation. Discrimination because of past, current or future military obligations is specifically prohibited, and covers the areas of hiring, promotion, reemployment, termination and benefits. This prohibition extends to past service members, current service members, and any employees who apply to be a member of any branch of the uniform services. USERRA prohibits employers from retaliating against any person who files a complaint, participates in an investigation or proceeding under USERRA or who exercises any right under USERRA, whether or not the person has performed military service.
3. Remedies and Procedural Considerations
Congress has specifically provided for the remedies available to an aggrieved military service person that files suit under USERRA. The Act specifically authorizes reinstatement with like status, back pay, court costs, reasonable attorneys' fees, expert witness fees, and other litigation expenses. In addition, the court may use its full equity powers to vindicate fully the rights of benefits of a person under USERRA. Furthermore, an employer may be liable for liquidated damages, in an amount equal to the back pay and lost benefits awarded to the employee, if the court determines that the employer's failure to comply with the provisions of this chapter was willful. Accordingly, an employer is liable for liquidated damages if the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited under USERRA; or, when he wholly disregards the law without making any reasonable effort to determine whether the plan he is following would constitute a violation of the law.
The aggrieved employee may initiate a complaint against the employer in one of two ways: (1) the employee may choose to file a complaint with the Secretary of Labor for investigation; or (2) the employee may file suit against the employer in the appropriate federal or state court. U.S. District Courts have jurisdiction over claims brought against private employers by the United States or by a person.
For claims against a State as an employer, Congress expressly granted jurisdiction to the applicable State court. An individual claimant cannot proceed in federal court against a State as an employer because the Eleventh Amendment to the United States Constitution would bar such a suit.
USERRA preempts all state laws, agreements, contracts, policies, plans, practices and other matters that attempt to limit the protections provided to military personnel. However, states may choose to provide military personnel with greater employment and reemployment rights. Therefore, many states have enacted laws similar to USERRA, granting military service personnel the same or greater rights.
West Virginia law provides that members of the state's military forces, ordered to active duty by the governor, are entitled to the same reemployment rights as those provided under USERRA's provisions. In addition, West Virginia further provides that officers and employees of the state and its subdivisions who are on military leave are entitled to 30 days of leave "without loss of pay."
4. Notice of USERRA Rights
In addition to the aforementioned obligations placed on employers, § 4334 of the Veterans Benefits Improvement Act of 2004 requires employers to provide notice to employees explaining their USERRA rights. Employers must provide notice to all persons entitled to USERRA rights and benefits. Employers may meet their obligations by placing the notice where the employers customarily place notices for employees. Employers may find a copy of the required notice at the Department of Labor's website, at www.dol.gov.
5. 2006 Regulations
Section 4331 of USERRA authorizes the Secretary of Labor to prescribe regulations implementing USERRA. The Department of Labor, through the Veterans Employment and Training Service, has issued a set of regulations implementing USERRA as it applies to states, local governments, and private employers. See 20 C.F.R. § 1002. The proposed regulations became effective January 18, 2006 (a copy of the regulations can be found on the Department of Labor's website, www.dol.gov/vets).
The proposed regulations attempt to clarify certain rights and requirements under the statute. For example, courts have disagreed over the appropriate burden of proof in cases brought under the USERRA provision that establishes the reemployment rights of persons who serve in the uniform services. One court has held that a person who has sued under the reemployment provisions of the statute must meet the burden of proof established under the anti-discrimination and anti-retaliation provisions of the statute. Other courts have disagreed and held that the two provisions are separate and distinct. The regulations support the latter view—proposed Section 1002.33 provides that a person seeking relief under § 4312, the reemployment rights section, need not meet the additional burden of proof requirements for discrimination cases brought under Section 4311.
6. Cases Interpreting USERRA
There have been several cases from various federal courts interpreting the requirements of USERRA. A brief synopsis of each is set forth below.
In Coffman v. Chugach Support Services, Inc., 411 F.3d 1231 (11th Cir. 2005), the employee filed suit against the employer, alleging violations of USERRA's anti-discrimination and retaliation provisions. The defendant corporation had replaced the plaintiff's former employer as a prime contractor for base support services at an Air Force base. The Eleventh Circuit held that the defendant had no duty to reemploy the plaintiff because it was not a successor in interest or successor employer for reemployment purposes. The Court concluded that there was no predecessor-successor relationship between the defendant and the plaintiff's former employer because there was no merger or transfer of assets. Thus, the defendant had no duty to reemploy the plaintiff.
In addition, the Eleventh Circuit also held that the plaintiff failed to present either direct or circumstantial evidence to demonstrate that the defendant relied on, took into account, considered, or conditioned its decision not to hire him on the basis of his military service. The court noted that the defendant had not expressed hostility towards service members, and, in fact, hired both military and non-military personnel.
In Vander Wal v. Sykes Enterprises, Incorporated, 377 F. Supp.2d 738 (D.N.D. 2005), two employees filed suit under USERRA, alleging that their employer failed to promptly reinstate them to their former positions after returning from over one year's military service. One of the employees, Mr. Vander Wal, indicated on his application for reemployment that he would be available to begin work on May 4, 2004, approximately two weeks from his application date. Shortly after he filled out his application, however, the plaintiff, through his attorney, sent a letter to the company demanding immediate reinstatement. The defendant rehired the plaintiff in a comparable job and increased his hourly wage to reflect a raise he would have received had he not been on military leave. The plaintiff started working in his new position on May 4, 2004. The court ruled, as a matter of law, that his return to work on the first day he indicated he was available to work constituted "prompt reemployment" under USERRA. Furthermore, the court noted that USERRA did not require immediate reinstatement. The other plaintiff, Mr. Vender-Dahl, was reinstated to his position approximately seven business days from the date of his application. The court ruled that Mr. Vender-Dahl was also "promptly reinstated" under USERRA.
In Gordon v. WAWA Inc., 388 F.3d 78 (3rd Cir. 2004), an Army Reserve member, upon returning from weekend Reserve duties, stopped by his place of employment to pick up his last paycheck and to get his work schedule for the next week before returning home. He was ordered to return to work on that night's late shift by his supervisor and allegedly threatened with termination if he refused. The Reserve member worked an entire eight hour shift and was killed when he fell asleep at the wheel on his way home. The administrator of his estate sued his former employer, alleging that it had violated USERRA. The Third Circuit upheld the dismissal of the plaintiff's claims, and concluded that USERRA's notification provision did not create an independent right to rest and could not oblige an employer to give the employee an eight-hour rest period before returning to work. In addition, the Third Circuit held that the Reservists supervisor did not commit an adverse employment action by allegedly threatening to terminate the employee if he did not begin work immediately.
In Bowlds v. General Motors Manufacturing Division of the General Motors Corporation, 411 F.3d 808 (7th Cir. 2005), the plaintiff filed suit against his former employer, alleging that he had been improperly denied reemployment in violation of USERRA and the VRRA. The plaintiff was inducted into the Army because of the Vietnam War. Shortly after returning from service, he was diagnosed with a skin condition caused by Agent Orange exposure. His employer placed him on total and permanent disability. The plaintiff argued that General Motors violated USERRA by not reemploying him from 1983 to 1989, when he was on disability retirement. The Seventh Circuit held that his USERRA claim failed because the statute did not apply retroactively. In addition, the plaintiff's VRRA claim failed because the VRRA did not create a reemployment right after an employer has already granted disability leave, even if the employee's current disability is related to his prior military service.
In Duarte v. Agilent Technologies, Inc., 366 F. Supp.2d 1039 (D. Colo. 2005), a former employee alleged that his employer violated USERRA when it terminated him approximately four months after his return from active military service. The plaintiff also alleged the company violated his reemployment rights. The plaintiff worked for the defendant for approximately 19 years. During his employment, he was a member of the Marine Corp Reserves. The plaintiff was called up for active duty on two separate occasions: once from October of 2001 to April of 2002 and the second time from November 2002 to July 2003. During the same period, the company experienced large financial losses and instituted a workforce management program, which consisted of terminating employees and reducing the workforce.
At the time of his second to duty, the plaintiff was a primary design consultant. When he returned to work, he was assigned to assist the primary design consultants in other departments. Approximately four months after he returned to work, the plaintiff was terminated, allegedly under the workforce management program. From approximately 2001 to November of 2003, only one other employee was terminated under the workforce program.
The court held that the defendant violated the plaintiff's reemployment rights upon his return from active service because he was returned to a position of "diminished status.” According to the court, "although Duarte's title, pay, and benefits upon his return from active duty in July of 2003 were the same as they had been when he was called up in November of 2002, the duties of his job as design consultant were significantly different. Specifically, Duarte was no longer the primary design consultant for the EPSG group, but rather was providing minimal assistance to other primary design consultants.
The court ruled that the defendant failed to meet its burden of establishing that the plaintiff's termination within one year of his reemployment was for cause under USERRA § 4316. The defendant argued that plaintiff was terminated under the workforce management program, due to the company's commitment to reducing the operating budget of the plaintiff's department by $700,000. The court recognized that a termination for financial reasons may be "for cause," but the court ruled that the timing of the plaintiff's termination and the decision-making process that preceded the termination were not reasonable under the circumstances. Specifically, at the time of his termination, the workforce management program had not applied to any other employees in his department for the preceding three years. In addition, the plaintiff's diminished status upon his return to work placed him at a disadvantage, in part because he was not given a fair opportunity to resume his previous duties before he was evaluated and ranked against other employees.