Not Currently Offering Paid Short-Term Military Leave? You May Need to Start.

Crowe & Dunlevy

Do you provide sick, jury duty, bereavement or other forms of paid short-term leave to your employees? If the answer is yes, then you may be required by the Uniformed Services Employment and Reemployment Rights Act (USERRA) to also offer paid short-term military leave.

How did this come to pass? Traditionally, USERRA has been read not to require an employer to pay an employee while he or she took military leave. Moreover, the service member had the choice of whether to use their other paid time off/vacation benefits to cover some or all of the absence. Both statements remain true. However, a recent decision by the federal Third Circuit Court of Appeals—aligning with a prior holding by the Seventh Circuit—indicates that the federal courts may be viewing USERRA’s statutory text in a new light, a light that would require employers that provide short-term paid leaves to also pay service members for short-term military leaves.

The Third Circuit case—Travers v. Federal Express Corporation—centers around Federal Express’ practice of providing unpaid military leave to service members while providing short-term paid leaves in other circumstances, such as for sickness or jury duty. Federal Express argued that USERRA does not require an employer to provide paid military leave. The Court of Appeals, though, found that Federal Express was missing the point of USERRA. To determine whether an employer’s policy discriminates against service members, the court—citing the language of USERRA—noted that the proper comparison is between (a) employees absent due to service and (b) employees of “similar seniority, status, and pay” absent for other reasons. Here, Federal Express provided a benefit to Group B—paid short-term leave for sickness, jury duty, bereavement and other reasons—that it did not provide to Group A for short-term leave. Where an employer treats Group A differently from Group B, it has made a distinction that is not permitted by USERRA.

The decision from the Third Circuit (and the Seventh Circuit before it) leaves unanswered questions.  First, how much paid military leave would an employer need to provide to comply with the statute?  Neither decision requires employers to provide unfettered paid military leave. Rather, they counsel that employers should provide paid military leave to the same extent that they provide short-term leaves under other circumstances. So, the amount of short-term military leave to be provided would depend upon the amount of other leave provided by the employer. Second, can an employer offset a service member’s military pay during service against any wages paid during leave? This possibility is raised but remains unanswered. An employer that provides paid jury duty but offsets juror compensation might argue that the two leaves are similar and similarly apply offset to military leave. These arguments will surely be litigated in the years to come.

So, what should employers do in the meantime? Employers with work sites in the Third (covering Pennsylvania, New Jersey, Delaware and the Virgin Islands) and Seventh Circuits (covering Illinois, Indiana and Wisconsin) should review their leave policies to ensure that they are providing short-term leaves consistently for both military and non-military reasons. For employers outside of these regions, it is important to note that, while these two decisions are not binding, USERRA litigation in the wake of these decisions is already picking up. As a result, employers nationwide should consider reviewing their leave policies, as failure to treat military leave consistently with other forms of short-term leave could result in liability under USERRA.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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