The Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA") - ABA YLD 101 Practice Series

By Joshua F. Naylor

The Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA" or "the Act"), codified at 38 U.S.C. §§ 4301 to 4344 (accompanying regulations at 20 C.F.R. §§ 1002.1 to 1002.314), provides various safeguards to private sector employees who opt to serve in our country's uniformed services.

The primary impetus for USERRA's passage was the 1991 Persian Gulf War, which saw the mobilization and subsequent return to the workforce of over 250,000 members of the National Guard and Reserves. Congress determined that the relatively limited protections afforded returning service members under previous enacted federal statutes (e.g., Selective Training and Service Act of 1940, Veterans' Reemployment Rights Act ("VRRA")) were inadequate. Accordingly, with USERRA, lawmakers aimed to greatly expand such safeguards and, by doing so:

  • to encourage noncareer service in the uniformed services by eliminating or minimizing the disadvantages to civilian careers and employment which can result from such service;
  • to minimize the disruption to the lives of persons performing service in the uniformed services as well as to their employers, their fellow employees, and their communities, by providing for the prompt reemployment of such persons upon their completion of such service; and
  • to prohibit discrimination against persons because of their service in the uniformed services.

38 U.S.C. § 4301(a)

USERRA's Applicability

Employers
In contrast to other federal employment statutes, such as Title VII of the Civil Rights Act of 1964 ("Title VII"), the Americans with Disabilities Act ("ADA"), and the Family and Medical Leave Act ("FMLA")), which are only applicable to employers having a certain threshold number of employees, all public and private employers irrespective of size must abide by USERRA's provisions. See 20 C.F.R. § 1002.34.

Failing to comply with USERRA's provisions can subject an employer to one or more of the following penalties: (1) court order requiring statutory compliance; (2) payment of compensatory damages; (3) payment of liquidated damages; (4) payment of attorneys' fees and other litigation expenses. See 38 U.S.C. §§ 4323(d)(1), (h)(2); 20 C.F.R. §§ 1002.310, .312.

Employees
USERRA's protections extend to employees who previously performed "service in the uniformed services," employees currently performing such service, or employees intending to do so in the future. USERRA is not applicable to independent contractors. See 20 C.F.R. § 1002.44 (a).

The "uniformed services" encompass more than the traditional branches of the Armed Forces and include all of the following:

  • the Army, Navy, Air Force, Marines, and Coast Guard;
  • the Army National Guard;
  • the Air National Guard;
  • the commissioned corps of the Public Health Service; and
  • any other category of persons designated by the President in time of war or national emergency.

38 U.S.C. § 4303(16); 20 C.F.R. § 1002.5(o)

"Service" in the uniformed services also is broadly defined, comprising the "performance of duty on a voluntary or involuntary basis in a uniformed service...includ[ing]:

  • active duty;
  • active and inactive duty for training;
  • attendance at one of the four military service academies;
  • National Guard duty under Federal statute;
  • a period for which a person is absent from employment for a fitness for duty examination;
  • a period for which a person is absent from employment to erform funeral honors duty under 10 U.S.C. § 12503 or 32U.S.C. § 115; and
  • service as an intermittent disaster-response appointee upon activation of the National Disaster Medical System (NDMS) or as a participant in an authorized training program.

38 U.S.C. § 4303(13); 20 C.F.R. §§ 1002.5(l), .60

Statute of Limitations
Both the Act and the regulations expressly reject the applicability of any State statute of limitations to any claim brought under USERRA. See 38 U.S.C. § 4323(i); 20 C.F.R. § 1002.311. However, neither the Act nor the regulations indicate what limitations period, if any, is applicable to USERRA claims. Some courts have construed this silence to mean that 28 U.S.C. § 1658, the four-year catchall statute of limitations under federal law, does not apply to USERRA claims. See, e.g., Akhdary v. City of Chattanooga, No. 1:01-cv-106, 2002 U.S. Dist. LEXIS 26898 (E.D. Tenn. May 22, 2002). Most courts, however, have found the opposite - that USERRA claims are subject to the four-year statute of limitations under 28 U.S.C. § 1658. See, e.g., Aull v. McKeon-Grano Assocs., Inc., No. 06-2752, 2007 U.S. Dist. LEXIS 13008 (D.N.J. Feb. 26, 2007); O'Neil v. Putnam Retail Mgmt. LLP, 407 F. Supp. 2d 310 (D. Mass. 2005); Nino v. Haynes Int'l, Inc., No. 1:05-cv-0602, 2005 U.S. Dist. LEXIS 43971 (S.D. Ind. Aug. 19, 2005). Further muddying the waters, the commentary preceding the regulations unambiguously states that the U.S. Department of Labor "will continue to adhere to its view that section 1658 does not apply to USERRA." Given this clear conflict among the federal courts, and between the DOL and the majority of the federal courts, the proper statute of limitations, if any, applicable to USERRA claims remains unclear.  

Obligations and Protections Under USERRA

In addition to affording employees certain health insurance and pension plan protections (See 38 U.S.C. §§ 4318-19), USERRA: (1) prohibits discrimination against employees based on their service in the uniformed services; and (2) mandates reemployment of employees following their service in the uniformed services.

Protection from Discrimination
First and foremost, USERRA prohibits discrimination against persons because of their past, present, or future service in the uniformed services. More specifically, it is unlawful for an employer to "den[y] initial employment, reemployment, retention in employment, promotion, or any benefit of employment" to any person because that person previously was a member of the uniformed services, currently is performing service in the uniformed services, or has applied to be a member of the uniformed services. See 38 U.S.C. § 4311(a); 20 C.F.R. § 1002.18. A "benefit of employment" can be an employee's wage rate, stock options, or something less quantifiable, such as the opportunity to select a desirable shift. See 38 U.S.C. § 4303(2); 20 C.F.R. § 1002.5(b). 

USERRA also prohibits employers from taking any adverse employment action against an employee (regardless of whether that employee ever performed service in the uniformed services) because that employee:

  • took an action to enforce any protection afforded any person under the statute;
  • testified or made a statement in connection with any proceeding under the statute;
  • assisted or otherwise participated in an investigation under the statute; or
  • exercised a right provided for under the statute.

See 38 U.S.C. § 4311(b); 20 C.F.R. § 1002.19-.20.

Right to Reemployment
USERRA mandates that employers provide employees returning from service in the uniformed services with "prompt reemployment." See 38 U.S.C. § 4313(a). Rather than a bright line standard, "'[p]rompt reemployment' means as soon as practicable under the circumstances of each case." 20 C.F.R. § 1002.181.

Unlike the FMLA, USERRA does not require a minimum period of employment in order for an employee to be entitled to the rights set forth under the statute. Thus, an employee who has worked for just one day has the right to be promptly reemployed if he/she leaves to perform service in the uniformed services. However, no reemployment obligation exists with respect to an employee who worked in a position for a brief, nonrecurrent period when there was no reasonable expectation that the employment would continue indefinitely or for a significant period. See 38 U.S.C. § 4312(d)(1)(C); 20 C.F.R. § 1002.139(c).

In order to be entitled to reemployment, employees must fulfill certain requirements. When possible, employees must provide their employer with advanced notice (either written or verbal) of their upcoming service obligation. See 38 U.S.C. § 4312(a)(1); 20 C.F.R. §§ 1002.85-.86. In addition, upon the conclusion of their service in the uniformed services, employees must seek reemployment in a "timely" manner. Under the statute, what is deemed "timely" depends on the length of the service in the uniformed services from which the employee has returned. See 38 U.S.C. § 4312(e); 20 C.F.R. § 1002.115.

USERRA does not require that an employer reemploy any employee:

  • whose discharge was other than honorable or who was court martialed;
  • who has more than five years of cumulative absences from that employer to perform service in the uniformed services;
  • if doing so would constitute an undue hardship for the employer because it would require significant difficulty or expense to assist the employee in becoming qualified for reemployment; or
  • if, during the employee's service in the uniformed services, theemployer's circumstances have so changed as to make reemploying the employee impossible or unreasonable.

See 38 U.S.C. §§ 4304, 4312(a)(2), 4312(d)(1); 20 C.F.R. §§ 1002.32(a)(2), .32(a)(4), .135(a), .139(b)

Reemployment Position, Pay Rate, and Benefits
In accordance with what the regulations refer to as the "escalator principle," an employee entitled to reemployment must be placed in the position the employee would have attained "with reasonable certainty" if not for the employee's absence to perform service in the uniformed services. See 38 U.S.C. § 4313; 20 C.F.R. § 1002.191. Often, but not always, this will be the same position the employee held prior to leaving for uniformed service. As part of its reemployment obligation, an employer may need to provide the employee training in order to allow the employee to obtain or regain the skills necessary to be qualified for that position. See 20 C.F.R. § 1002.198.

Also pursuant to the "escalator principle," a reemployed employee is entitled to the pay rate he/she would have had, with reasonable certainty, if not for the employee's absence to perform service in the uniformed services. Therefore, any pay increases, differentials, step increases, merit raises, or periodic increases that the employee likely would have received had he/she remained continuously employed must be factored into the reemployed employee's rate of pay. 

The benefits to which reemployed employees are entitled upon returning from service in the uniformed services depends on whether the benefits are "seniority-based" or "non-seniority-based." A seniority-based benefit is a benefit of employment that is a reward for length of employment (e.g., vacation eligibility), while a non-seniority-based benefit is a form of short term compensation for work performed (e.g., vacation accrual, performance bonus). Employees are entitled to any seniority-based benefits that they would have received with reasonable certainty if they had remained continuously employed. See 38 U.S.C. § 4316(a); 20 C.F.R. §§ 1002.210-.213. However, employees absent from work to perform service in the uniformed services are only entitled to the non-seniority-based benefits provided to other employees with similar seniority, status, and pay who take comparable non-military leaves of absence. See 38 U.S.C. § 4316(b)(1); 20 C.F.R. §§ 1002.149-.150.

Discharge Only "For Cause"
It may surprise some employment law practitioners to learn that USERRA actually alters at-will employment with respect to certain returning service members. Depending on an employee's length of service in the uniformed services, USERRA may impose a "for cause" standard of discharge. Under the statute, if an employee's service lasts between 31 and 180 days, an employer may not discharge that employee, "except for cause" for 180 days after his/her reemployment begins. This period during which a returning service member is insulated from discharge "except for cause" is extended to a full year for an employee whose uniformed service lasts more than 180 days. See 38 U.S.C. §§ 4316(c)(1)-(2); 20 C.F.R. §§ 1002.247(a)-(b).

Although USERRA does not define "cause," the regulations state that "cause" for discharge exists if:

  • it is reasonable to discharge the employee for the conduct in question and the employee had notice (either express or fairly implied) that the conduct would constitute cause for discharge; or
  • an employee's position is eliminated or the employee is placed on layoff status.

20 C.F.R. § 1002.248

Because USERRA is a relatively new statute and its regulations have only been in effect for slightly over a year, there are few cases applying or interpreting the "for cause" standard of discharge. This fact, combined with the inconsistency among the handful of decisions in which "for cause" discharge is examined, makes it difficult for employers (or their counsel) to know with any degree of certainty what comprises "cause" under USERRA sufficient to discharge an employee who has recently returned from service in the uniformed services. Compare Duarte v. Agilent Techs., Inc., 366 F. Supp. 2d 1039 (D. Colo. 2005) (employer's legitimate concerns over budget problems did not constitute "cause" for employee's discharge) with Ferguson v. Walker, 397 F. Supp. 2d 964 (C.D. Ill. 2005) (employer's budgetary concerns constituted "cause" for employee's discharge).

Conclusion
The number of USERRA claims filed in federal courts has dramatically increased in the past several years as large numbers of employees have left for, and returned from, uniformed service in Iraq, Afghanistan, and elsewhere. With the U.S. military engaged in large scale operations for the foreseeable future, this litigation trend is likely to continue.

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About the Author

Joshua F. Naylor is an associate with Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

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