On December 19, 2005, eleven years after Congress enacted the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (“USERRA”), the U.S. Department of Labor issued final regulations under USERRA which became effective January 18, 2006.  The final regulations can be found at 20 Code of Federal Regulations (CFR), Part 1002.  The DOL suggests these final regulations do not impose any new obligations on employers, but rather, serve as an implementation of the statutory requirements, as well as to clarify and interpret areas of the law.  However, these regulations, the first ever issued under USERRA, turn the internal guidance of the DOL into binding regulations.

 

With nearly half a million uniformed service personnel being called upon by the Government to assist with the War on Terror since 2001, many employers have been or will be faced with returning service members.  As these individuals return to the workplace after being called to assist the Country in its darkest hours, the burden is on the employer to comply with USERRA.  Specifically, the new regulations provide, consistent with the U.S. Supreme Court’s interpretation of USERRA’s predecessor statute, “This legislation is to be liberally construed for the benefit of those who left private life to serve their country… [and] … no practice of employers … can cut down the service adjustment benefits which Congress has secured the veterans under the Act.”  Fishgold v. Sullivan Drydock and Repair Corp., 328 U.S. 275, 285 (1946).

 

The original purpose of USERRA was, and still is, to encourage non-career service in the uniformed services and protect the rights of persons who voluntarily or involuntarily leave employment positions to undertake military services.  In bringing this mission forward, the legislation’s goals are to assist in minimizing disruption in the lives of those performing duties for the Country, and to prohibit discriminating against a person because of his/her activities in the uniformed services.  In effectuating the principles, USERRA and the newly-created regulations protect the rights and benefits of uniformed service persons with regard to his/her employment, as well as securing re-employment for the individual. 

 

The newly effective regulations are extensive.  Accordingly, this article will provide a brief overview of the most frequently raised issues.  Although no published cases (as of the writing of this paper) have implemented the new regulations, this paper will provide a brief review of certain recent cases interpreting USERRA in the Federal circuit courts and district courts.

 

Employees Covered Under USERRA

 

USERRA is applicable to any employee who is engaged in active duty, inactive and/or active training, National Guard duty, and absences for examinations, funeral duties, and examinations for purposes of determining if an employee can qualify to become a uniformed service member.  Applicants for employment are also covered under USERRA.  An employee’s status as full-time or part-time, management or non-management, exempt or non-exempt are of no relevance to the applicability of USERRA.

 

Independent contractors are not covered under USERRA, nor are some temporary employees whose work is brief, nonrecurring and without an expectation that the employment will continue on an indefinite or significant period.  In determining whether an employee is classified in this limited exception, employers must remember the law is to be interpreted in a broad manner to protect employees.

 

Employers Covered Under USERRA

 

The regulations re-affirmed the provisions of USERRA regarding what type of employers are required to provide USERRA protections to employees.  Essentially, USERRA is one of the largest reaching employment laws in the federal system—both in its covered subjects and its reach among employers.  Simply stated, unlike other statutes that protect against discrimination (i.e. Title VII), continued medical coverage (i.e. COBRA), and leave protections (i.e. FMLA), USERRA has no minimum threshold number of employees to subject the employer to providing the protections of the statute.  Rather, USERRA applies to all public and private employers in the U.S., regardless of size, as well as foreign employers that have a physical location in the U.S.  The statute also applies to government employment, including public schools, public health care providers, and state, city and municipal government employees.

 

Employer’s Notice Requirement To Employees

 

The posting requirement originally publicized in March 2005 under the Veterans Benefits Improvements Act of 2004, has been incorporated in and revised by the final DOL regulations.  Specifically, the regulations (and revised posting) extend protection beyond traditional military service to include individuals engaged in services with the National Disaster Medical System (“NDMS”).  The NDMS is a section within the U.S. Department of Homeland Security which supports Federal agencies, including FEMA, in the management and coordination of the Federal government’s response to major emergencies and federally declared disasters.  Individuals in the NDMS are professional and para-professional volunteers who may be called to duty or training in response to public health emergencies, and as such are considered to be serving in the uniformed services for purposes of USERRA.  Employers should ensure the latest version of the posting, which now includes language providing for protection of individuals of the NDMS, is being used at the workplace.

 

Discrimination and Retaliation

 

The regulations affirm the protections afforded to employees and applicants regarding discrimination and retaliation based on military status.  Employers must not deny initial employment, reemployment, retention in employment, promotion or any other benefit of employment because of an individual’s membership, application for membership, performance of service, application for service, or obligation for service in the uniformed services and are prohibited from taking adverse employment actions against employees for exercising their rights or attempting to enforce their rights under USERRA.  It is noted that the regulations provide that a claim for failure to reemploy a returning service member may be a claim for discrimination, but additionally, is a separate cause of action under USERRA.

 

Employee’s Notice to Employer of Leave

 

An employee must give, oral or written, advanced notice, within a time that is reasonable under the circumstances, to his/her employer of the impending leave.  However, there is no specific time frame mentioned to establish what “reasonable” is, although the Department of Defense suggests 30 days of notice if it is feasible.  Certain circumstances will eliminate this requirement.  Employees engaged in national security matters (i.e. “top secret” matters) may not know when their deployment will be, or may not be able to disclose their deployment time.  As such, these employees, despite not providing notice, will still be covered by USERRA.  This exception becomes increasingly important with respect the employee’s rights under the health care and pension provisions of USERRA.

 

Employee’s Rights To Leave

 

An employee’s leave for purposes of uniformed services can be for a cumulative period of five years.  This leave will rarely be on a continuous basis.  Leave does not cover the time period between the employee’s active duty and preparation for departure or return from active duty to work. 

 

The employee’s leave does not have to be confined strictly to military service.  An employee on leave may take opportunities to engage in other work while on off-duty hours.  An employee, while on active duty and on leave protected by USERRA can participate in employment during his/her off-duty time with another employer.  An example of this would be an employee called to duty in a state different from employer.  This employee could tend bar during his/her off-duty time in the evenings.  This activity would not impinge on the employee’s rights to leave or reemployment with his/her employer.

 

Employee’s Intent to Return to Work

 

An employee is not required to inform his/her employer of his/her intent to return to work until after his/her military service has concluded.  The regulations specifically state that, even if an employee, prior to taking leave, informs the employer that he/she does not intend to return to work after active duty, this does not waive the right of the employee’s reemployment rights upon conclusion of his/her active duty.  The employee has a limited time-frame for requesting reemployment, which is dependant on the length of the employee’s leave for military service.  An employee dishonorably discharged from the uniformed services will not have rights to reemployment.

 

Re-Employment: Employer’s Time Frame

 

An employer must reemploy a returning service member, absent unusual circumstances, generally, “within two weeks of the employee’s application for employment.”  An employee returning from a short duration (such as weekend duty) should be reemployed by the next regularly scheduled shift.  “Prompt reemployment” may require additional time if the employer is actively attempting to reassign or give notice to another employee in the position originally held by the returning service member, or is attempting to place more than one returning service member.

 

Re-Employment: Escalator Provision

 

The regulations discuss extensively the escalator provisions of USERRA.  Generally, a returning service member is entitled to by reemployed at “the position the employee would have attained if his or her continuous employment had not been interrupted due to uniformed services.”  This includes seniority, pay, and status.  There are exceptions to this, as well as Employer responsibilities similar to those under the American’s with Disabilities Act for reemploying an injured returning service member, or for training a returning service member in order to qualify that member for the civilian job. 

 

Terminating A Reemployed Uniformed Service Member

 

Upon return to work, even in an “at-will” employment environment, a returning service member may only be terminated “for cause”.  If an employee was on USERRA-protected leave for less than 180 days, but more then 31 days, the “at will” relationship is suspended for 180 days.  Should the employee’s protected leave been more then 180 days, the “at will” employment relationship will be ineffective for one year from reemployment.  The regulations clarify that “for cause” discharges include not only conduct, but also application of other legitimate non-discriminatory reasons.  This includes changes in circumstances that make reemployment impossible or unreasonable, such as a reduction-in-force or position elimination.  The employer will bears the burden of proving such discharge was “for cause”. 

 

Healthcare Benefits

 

The regulations incorporate the 2004 changes made by the Veterans Benefits Improvement Act, requiring an extension of the 18 month period to 24 months of continued optional COBRA-like benefits.  This benefit allows the service member to elect continued coverage under the employer-based health plan on a self-paying basis for himself/herself and any dependents.  This benefit is provided for up to 24 months or the end of the employee’s military service (whichever is shorter).  It should be noted that a health care plan does not have to initiate an employee in the plan if that employee was not enrolled in the health care plan prior to being activated to military service.  Dependants do not have the right to elect coverage if the USERRA-covered employee has not elected such continuation of coverage, further, a uniformed service-dependent does not have independent election rights under USERRA.  An employee’s rights for health care under USERRA vary greatly depending on the employer’s implementation of reasonable requirements for election and continuation, and on the employee’s requirement to give employer advance notice of departure (a requirement that may fluctuate or be nonexistent based on other provisions of USERRA). 

 

Regardless of whether an employee elects to continue coverage while on uniform service duty, upon reemployment with employer, the employee is entitled, without a waiting period, to be reinstated to the health plan.

 

Benefits must remain unchanged if the employee’s service is for less than 30 days.  Upon return from service, the service member must be reinstated to employer’s health plan without a waiting period or exclusion.  The regulations take the position that cafeteria plans are health plans under USERRA and must comply with the statute’s continuation and reinstatement provisions.

 

Retirement Benefits

 

The regulations provide further information on the administration of qualified retirement plans under USERRA, including calculating an employee’s presumed compensation and the timing of employer’s contributions and distributions.  The regulations provide for guidance on a variety of pension plans, including non-ERISA plans and government plans.  Military leave cannot be treated as a break for purposes of vesting or accrual of benefits.  Employers should consult with its benefits counsel before adjusting any pension plans to comply with the regulations.

 

Enforcement of USERRA

 

Employees can make a complaint with the Department of Labor or commence a private lawsuit to enforce his/her rights under USERRA.  USERRA provides no statute of limitations, although some jurisdictions may apply the ‘catch-all’ four-year limit for filing an action under USERRA against an employer.

 

As with any newly implemented legislation or regulations, employers should take the time to familiarize themselves with new requirements, as well as review (and make the necessary updates to) all policies and practices to ensure compliance and consistency with the legislation or regulations.  Learning after a claim is filed that the employer’s policy or practice is inconsistent with the regulations is too late.  Preventative maintenance on the employer’s policies and practices is the best start for avoiding litigation.

 

Recent Developments and Interpretations in the Courts

 

            Circuit court decisions

 

In Garrett v. Circuit City Stores, Inc., No. 04-11360, 2006 WL 1283743 (5^th Cir. 5/11/2006), Circuit City, in 1994, hired Garrett, who was also a member of the Marine Reserves.  In 1995, Circuit City adopted an arbitration agreement with all their employees, which Garrett signed.  Garrett alleges he was fired because of his status as a Marine.  Garret claims that arbitration will reduce his rights afforded to him by USERRA.  The Fifth Circuit held that USERRA claims are subject to arbitration under the FAA; this decision reversed the district court’s denial of the employer’s motion to compel arbitration.

 

In Bowlds v. General Motors Manufacturing Division of General Motors Corporation, 411 F.3d 808 (7^th Cir. 2005), a Vietnam veteran claimed that he was denied reemployment with the Company in violation of USERRA.  He claims that General Motors violated USERRA by not reemploying him from 1983 to 1989.  However, it was only during President Clinton’s first term which the Bill was signed into law (October 13, 1994).  The court held that Congress’ did not intend for USERRA to be retroactive; the court suggested that perhaps it should have been, but it is not.  Therefore, the employee’s USERRA claim clearly accrued before the application date mandated by Congress.

 

In Coffman v. Chugach Support Services, Inc., 411 F.3d 1231 (11^th Cir. 2005), Coffman was hired by a company named Del-Jen in 1997 for a civilian job on an Air Force Base.  After being promoted to manager, Coffman was deployed by the Air Force and another employee, Cruz, was hired as a temporary replacement.   While Coffman was still away on active duty, the Air Force replaced Del-Jen with Chugach as its primary contractor.  Chugach interviewed about 100 Del-Jen employees, including Coffman and Cruz.  Chugach hired 97 of the 100 Del-Jen employees, but did not offer employment to Coffman.  Chugach offered Coffman’s previous position to Cruz.  The Eleventh Circuit held that although USERRA should be “liberally construed for the benefit of those who left private life to serve their country . . . Chugach is not the successor in interest or successor employer of Del-Jen and as such, owed no duty under 4312 and 4313 of USERRA to reemploy Coffman.”

 

In Lindsley v. Office of Personnel Management, 126 Fed.Appx 959 (Fed. Cir. 2005), the Federal Circuit Court held that substantial evidence supported the employer’s contention that the employee intended to abandon his career in favor of one in the military, and therefore, the employee waived his employment rights under USERRA.  (This case is likely in opposition to the new regulations.)

 

In Maxfield v. Cintas Corporation No. 2, 427 F.3d 544 (8^th Cir. 2005), en banc denied, Maxfield was transferred from one position to another position on the day he returned from military service.  The Eighth Circuit reversed and remanded the grant of Cintas’s motion for summary judgment on the USERRA claim.  Maxfield claimed that his military service caused him to be demoted.  Cintas argued that he was not demoted; but if he was, USERRA does not cover demotions.  The court agreed with Maxfield because his service need only be a “motivating factor in the employer’s actions.”

 

In Jordan v. Department of Labor, No.05-3385, 2006 WL 572196 (Fed. Cir. 3/10/2006), a federal employee for the USPS brought a USERRA claim against the Department of Labor.  The Circuit Court ruled that Jordan’s employer was USPS, not the Department of Labor; therefore, the Merit Systems Protection Board lacked jurisdiction to entertain the federal employee’s USERRA claim because the Department of Labor was not his employer. 

 

            District court decisions

 

In Breletic v. CACI, Inc.-Federal, 413 F.Supp.2d 1329 (N.D.GA 1/24/2006), employee entered into an arbitration agreement with his employer.  Later he filed a complaint alleging that his employer violated USERRA.  Employer filed a motion to compel arbitration.  The district court ruled that USERRA granted the right to pursue claims in a judicial forum and preempted arbitration agreements purporting to cover claims under USERRA.  (This decision is in direct conflict with the Fifth Circuit’s decision in Garrett, supra.)

 

In Carpenter v. Tyler Independent School District, No. 6:05cv124, 2006 WL 1121287 (E.D.Tex. 4/26/2006), a teacher brought an USERRA claim against the school district for not renewing his employment.  The jury found that the school district discriminated against the employee because of his military service.  However, the jury awarded no damages.  The court disregarded the damages verdict and awarded the employee one year front pay in order to make him whole.

 

In Leboeuf v. Hewlett-Packard Company, No. 3:03-cv-463, 2006 WL971624 (S.D.Ohio 4/10/2006), employee filed a complaint alleging employer violated USERRA by terminating his employment.  The district court granted summary judgment because the employee failed to produce direct evidence.  In reaching such decision, the court stated that an employee that pursues discrimination based on direct evidence should have to present evidence such as a statement by the employer saying, “I fired you because you are in the Army Reserve.”  Evidence regarding employer’s inquiry into the employee’s possible deployment after the incidents of 9/11 was not enough to avoid summary judgment. 

 

In McClain v. City of Somerville, 424 F.Supp.2d 329 (D.Mass. 4/3/2006), a former serviceman brought suit for “failure to hire” in violation of USERRA; both parties moved for summary judgment.  The district court granted employee’s motion for summary judgment, holding that the city violated USERRA when it conditioned employee’s job on attend a training session knowing that the employee could not attend because of active service during that time.  The district court also noted that the hiring provision of USERRA was applicable to active members as well as guardsmen and reservists. 

 

In O’Neil v. Putnam Retail Management LLP, 407 F.Supp.2d 310 (D.Mass. 2005), O’Neil brought a USERRA claim on a number of grounds.  The district court held that the four-year “catchall” federal statute of limitations applies to USERRA claims.  The motion to dismiss was allowed in part and denied in part based on when time began to accrue.

 

In Keating v. University of South Dakota, 386 F.Supp.2d 1096 (D.S.D. 2005), an employee brought a USERRA claim against a state university.  The district court held that state courts can resolve USERRA claims if the defendant is a state employee.

 

 

USERRA’s revised posting for all private employers is available at: http://www.dol.gov/vets/programs/userra/USERRA_Private.pdf.

 

Mr. Murray and Mr. Preis are attorneys with McGlinchey Stafford PLLC in New Orleans, Louisiana where they represent management in labor and employment matters.  They can be reached at bmurray@mcglinchey.com, epreis@mcglinchey.com or (504)586-1200.

 

 

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