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Veterans Rights: What Employers Need to Know

New York Law Journal
March 2, 2016

Does your Company have at least one employee? If the answer is YES, then the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) applies to you.  USERRA prohibits employment discrimination against a person on the basis of past military service, current military obligations, or intent to serve.

To comply with USERRA, an employer must not deny initial employment, re-employment, retention in employment, promotion, or any benefit of employment, to a person on the basis of a past, present, or future service obligation. See, 38 U.S.C. § 4311(a).  Additionally, an employer cannot retaliate against an employee because of an action taken to enforce or exercise any USERRA right or for assisting in a USERRA investigation. Id. at § 4311(b).

On top of all of these legal obligations, members of the military are currently recognized by many as a group that deserves every American’s thanks, and violations of this obligation will be seen as un-American. While this is not a legal issue, its practical impact may be more damning than the legal ramification of a technical violation.


The employer for which the service member worked prior to deployment must reemploy a service member returning from a period of service in the uniformed services (which includes active duty service as well as National Guard obligations) if the service member meets five criteria:

  1. The person must have been absent from a civilian job on account of service in the uniformed services;
  2. The person must have given advance notice to the employer that he or she was leaving the job for service in the uniformed services, unless such notice was precluded by military necessity or otherwise impossible or unreasonable;
  3. The cumulative period of military service with that employer must not have exceeded five (5) years;
  4. The person must not have been released from service under dishonorable or other punitive conditions; and
  5. The person must have reported back to the civilian job in a timely manner (as discussed below) or have submitted a timely application for reemployment, unless timely reporting back or application was impossible or unreasonable. See, 38 U.S.C. § 4312 (a)-(e)

USERRA establishes a five year cumulative total of military service with a single employer, with certain exceptions allowed for call-ups during emergencies, reserve drills, and annually scheduled active duty for training. USERRA also allows an employee to complete an initial period of active duty that exceeds five years.

However, employees who were employed for a “brief, nonrecurrent period” with no reasonable expectation of continued employment for an indefinite or significant period are generally not covered by the reemployment provisions. 38 U.S.C. § 4312(d)(1)(C). However, these employees are still protected under USERRA’s anti-retaliation provision.

Common Mistake Employers Make: Applying the Escalator Principle

USERRA provides that returning service members are to be reemployed in the job that they would have attained had they not been absent for military service (the escalator principle). See, 38 U.S.C. § 4316(a).   This means the service member is entitled to the same seniority, status and pay, as well as all other rights and benefits determined by the seniority they would have accrued, had they not gone on military duty.

To comply with this, USERRA requires employers make reasonable efforts to enable returning service members to qualify for reemployment (for example, by providing training or retraining services). See, 38 U.S.C. § 4312(d)(2)(B).

But what does the company do when the returning service member does not and cannot qualify for the “escalator position?” He or she, if qualified, must be placed in any other position that is the nearest approximation to the escalator position.  If that fails, he or she must be returned to the pre-service position.  In this latter instance, if retraining or refresher training is needed, it must be given.

USERRA also provides that while an individual is performing service, he or she is to be deemed on furlough or leave of absence status and is entitled to the non-seniority rights accorded other similarly situated employees on non-military leaves of absence. See, 38 U.S.C. § 4316(b)(1)(A)-(B). This can include, for instance, the continued ability to purchase discounted products under a company-established program. USERRA also has rules and regulations regarding providing service members with health and pension plan coverage while on duty, but it also recognizes that such service members are also entitled to continue their current coverages if they so choose and they follow the requirements of laws such as COBRA. See generally, 38 U.S.C. § 4317.

Time Limit for Returning to Work:

Service members have strong rights to return to their former job, but there are strict time limits. If the service member was absent for less than 31 days of service, the service member must return by the beginning of the first regularly scheduled work period after the end of the last calendar day of duty, plus time required to return home safely and an eight hour rest period.  If this is impossible or unreasonable, then the service member must return as soon as possible. See, 38 U.S.C. § 4312(e)(1)(A).  For service more than 30 days but less than 181 days, the employee must apply for reemployment no later than 14 days after completion of military service.  If this is impossible or unreasonable through no fault of the employee, then as soon as possible. Id. at § 4312(e)(1)(C).  If the service member is absent more than 181 days, the employee must apply for reemployment no later than 90 days after completion of military service. Id. at § 4312(e)(1)(D).  If the service member is absent due to a service-connected injury or illness, reporting or application deadlines are extended for up to two years for persons who are hospitalized or convalescing. Id. at § 4312(e)(2)(A)-(B).

When can an Employer Avoid Reemployment?

Avoiding re-employment obligations is a rare occurrence, but it can occur if:

– Changed circumstances caused the elimination of the job, such as an intervening reduction in force that would have included the absent employee;

– The individual is no longer qualified, despite the employer’s reasonable efforts to train the employee; or

– The employee was employed for a brief, non-recurrent period. See, 38 U.S.C. § 4312 (d)(1)(A)-(C).

Remedies for Non-Compliance

In court, the service member may be entitled to recover back pay, lost benefits, liquidated damages (double the back pay), lost promotional opportunities, retroactive seniority, pension adjustments, restored vacation or reinstatement if the employer is found to have violated USERRA. Id. at § 4312(a); see also, 20 CFR Part 1002.312.  The service member alternatively has the option of filing a complaint with the United States Department of Labor for the alleged USERRA violation and may recover similar remedies. USERRA. 20 CFR Part 1002.308. However, in this latter case, the service member can use the Government to prosecute the case, rather than obtaining private counsel.

These damages can prove to be costly for employers. For instance, in Koehler v. PepsiAmericas, Inc., the plaintiff worked as a salesman and was called up to active duty from the reserves. Koehler v. PepsiAmericas, 2008 U.S. App. LEXIS 5368 at *2 (6th Cir. Mar. 6, 2008).  Upon his return to work, he was disciplined for attendance issues many of which related to his military service. Id. at *4.  The plaintiff complained and the absences were reversed. Id.  Pepsi also had a policy that bridged the gap between military pay and an employee’s normal pay.  However, Pepsi did not pay the plaintiff the differential. Id. at *5. To add insult to injury, when he complained Human Resources deposited the money he was owed into his bank account and then immediately withdrew it. Id. at *6.  The plaintiff brought suit alleging a violation of USERRA.  A bench trial was held, and the plaintiff was awarded liquidated damages in the amount of $16,962.86 which the Court of Appeals for the Sixth Circuit upheld. Id. at *18-23. This was in addition to the wage differential of $16,962.86 plaintiff was owed under Pepsi’s policy.  The Court also awarded $50,000 in punitive damages based on a state law claim of conversion of property in light of Human Resources depositing the funds and then withdrawal. Id. at *13.

On top of all of this, of course, is the potential for bad public relations. For some, this is a minor concern, for others it could be devastating.

Employers who have employees entering or returning from service should ensure their policies and procedures incorporate the requirements of USERRA. Additionally, state laws may apply.   With the United States still at war in multiple locations throughout the globe, it is a good idea to make sure your policies comply with USERRA.

Robert G. Brody is the founder of Brody and Associates, LLC.  Katherine M. Bogard is an associate at the firm.  Brody and Associates represents management in employment and labor law matters and has offices in Westport and New York City.