United States: Employer Obligations and Employee Rights Under Federal Law Regarding Leave for Military Service

In the wake of the tragic events of September 11, 2001, the United States armed forces began to mobilize rapidly. As part of the military buildup, President Bush authorized the activation of 35,000 members of the National Guard and Reserves, and as of October 6th, the Pentagon had activated more than 25,765 of these part-time soldiers. As these troops report for duty, it is crucial that employers understand their responsibilities under federal law with regard to the job rights and benefits of employees absent from work for military service.

Employment/Re-Employment Rights of Military Are Protected by Statute
Enacted in 1994, the Uniformed Services Employment and Re-employment Rights Act (USERRA) ¹ unified, simplified, and strengthened the web of federal statutes that previously enumerated the employment and re-employment rights of persons completing military service in the United States armed forces. USERRA was intended to encourage part-time military service in the uniformed services by "eliminating or minimizing the disadvantages to civilian careers and employment which can result." Statutes similar to USERRA have traditionally been construed liberally by the courts for the benefit of those who serve their country.²

In general, USERRA requires employers to provide up to five years of cumulative, unpaid military leave to employees, and to re-employ those employees without loss of seniority upon completion of service. In addition, the statute prohibits employers from terminating re-employed workers without cause for a specified period. As such, the leave protections provided to employees by USERRA are the most extensive of any federal statute.

USERRA applies to all private and public employers, regardless of size, and protects employees who work on more than a temporary basis. Most military service, whether voluntary or involuntary, qualifies for protection under USERRA, including: active duty, active duty for training, initial active duty for training, inactive duty training, full-time National Guard duty, any period of absence during which the employee's fitness is being evaluated for duty, and any period of absence during which the employee is performing military funeral honors.³

Employee Eligibility: Notice, Leave Duration & Reapplication
To be eligible for protection under USERRA, the employee's leave can not exceed five years in the aggregate; an employee must provide notice to his employer prior to the commencement of the leave; the employee must receive an honorable discharge from duty; and the employee must apply for re-employment in a proper and timely fashion following discharge. The burden is on the employee to meet these requirements. An employee who fails to meet any requirement loses any and all rights he may have had under USERRA. These employee obligations are examined in detail below.

Leave Not to Exceed Five Years: To qualify for USERRA protection, an employee's military leave may not exceed five years in the aggregate. Certain periods of leave are excluded by statute from the cumulative total. For example, should the employee finish the tasks of his military duty, and is unable, through no fault of his own, to obtain discharge, the extended time is not included in the five-year limit. Also excluded from the cumulative total is any period during which the employee is "ordered to or retained on active duty (other than for training) . . . because of a war or national emergency" or "ordered to active duty . . . in support . . . of an operational mission."⁴ This exclusion likely applies to the current national situation. Therefore, the reservists and national guard members currently being called to service are not accruing time against the five-year limit imposed by USERRA.

Employee Must Provide Notice: USERRA requires employees to provide written or oral notice to the employer in advance of any service-related absence. There are, however, numerous exceptions to the notice requirement. For example, notice is not required when giving notice is "precluded by military necessity" or "otherwise impossible or unreasonable" under the circumstances.⁵ The determination of "military necessity" is made by the Department of Defense and is not subject to judicial review. Because the deployment of reserve soldiers is generally performed in an expedited fashion, it is unlikely that any employee would later be denied USERRA protection due to deficient notice, unless the employee is plainly negligent.

Discharge Obligations: In order to be eligible for re-employment rights under USERRA, the employee must receive an honorable discharge from service. If an employee is discharged under less than honorable conditions (e.g., a bad conduct discharge), the employee is ineligible for USERRA protection following that particular span of service.

Application For Re-Employment: Once satisfactorily discharged, the employee must follow certain procedures when returning to work in order to receive USERRA protection. For instance, the employee must return to work within a certain time frame. The time frame is determined by the duration of the employee's service. In the event that the employee's service extends for 30 days or less, and the employee has had the opportunity to return home and rest for 8 hours, then he must report to work on the next full work day. If the employee's service extends 31-80 days, the employee must submit an application for re-employment to the employer within 14 days of discharge. The application must be supported by official documentation of the employee's service and discharge, if the employer so requires. If service extends beyond 180 days, the employee must submit an application for re-employment within 90 days of discharge. These time limits are tolled for up to two years if the employee is hospitalized or convalescing due to an injury suffered or aggravated during active service.

What exactly does an employee have to do to make an "application" for re-employment? How formal does he or she have to be? Do forms need to be filled out, or is a simple call to a supervisor enough? Federal courts faced with these questions have drawn the line somewhere in the middle, holding that employees are required to make more than a mere inquiry about the possibility of employment. Courts make this determination on a case-by-case basis by examining "the intent and reasonable expectations of both the former employee and the employer."⁶ Consider the following cases:

• McGuire v. United Parcel Service⁷ (1998) In McGuire, the plaintiff was called for active military duty in Bosnia in December 1995. On June 30, 1996, the employee received an honorable discharge. On July 11, he sent a letter to his former supervisor requesting "the procedures for getting his job back." The supervisor referred the employee to Human Resources, but he failed to contact that department. The court held that the employee's contact fell short of an application for re-employment. The court indicated that contact with a former supervisor, alone, is insufficient for purposes of USERRA. Instead, soldiers seeking re-employment must contact, in an unambiguous way, a person with responsibility over personnel matters.
• Shadle v. Superwood Corp.⁸ (1988) In Shadle, the plaintiff worked for the defendant corporation for six years before terminating his employment in 1979 to enlist in the United States Navy. He was honorably discharged four years later on September 26, 1983. On November 1, 1983, the plaintiff asked for a job application at the guard shack of the facility where he used to work. He was told that the company was not hiring. The plaintiff also attempted to contact company managers by phone. The court held that the plaintiff's actions were inadequate to put the defendant on notice that he was a veteran seeking re-employment. The court also stated that it was reasonable for an employer to expect any employee returning from military service to identify himself as such when applying, something the plaintiff did not do.

Employer Obligations: Re-Employment Without Disadvantage and Prohibition on Termination Without Cause
If an employee provides appropriate notice to his employer, takes less than five years of cumulative leave, and complies with his re-employment obligations, his employer is required to treat him as though the military leave never occurred. Accordingly, employers must be aware of their obligations while employees are on leave, as well as the position and level of benefits employees are entitled to receive upon re-employment.

Health Benefits: While an employee is on military leave, USERRA mandates that his employer treat him as though he is on a furlough or leave of absence. During the leave, the employer is not required to pay the absent employee.⁹ However, the employee and the employee's dependents may elect to continue receiving benefits under any existing employer health plan. If the employee chooses to continue health coverage, the employer may require the employee to pay up to 102% of the normal premium. The employer must offer health plan coverage for up to 18 months, or until the employee fails to make timely application for re-employment, whichever comes first.

Reinstatement: Reinstatement rights are somewhat dependent upon the duration of military service leave. If the employee's leave lasts 90 days or less, the employee must receive his or her pre-leave position, or a higher level position if a promotion would have been awarded during the absence. (This is sometimes called the "escalated position.") If the employee's military service leave extends beyond 90 days, a returning employee is entitled to the previously-held or escalated position, whichever is applicable, or another position equivalent in pay, status and seniority.

There are a number of exceptions to the general reinstatement requirements. If upon returning to work the employee is no longer qualified for the previously-held or escalated position, then the employee is not entitled to reinstatement in the position. The employer is, however, required to make a reasonable attempt to re-train the employee for the position. For example, if an employee's position becomes computerized during the employee's military leave, and the employee lacks the requisite computer skills, the employer has an obligation under USERRA to train the employee to perform the altered position. Additionally, if military service renders the employee disabled, the employer must make a reasonable effort to accommodate the employee in the position to which he or she is entitled. Further, re-employment is not required if the employer's "circumstances have so changed as to make such re-employment impossible or unreasonable." To qualify under this exception, there must be a change in the business that is both substantial and negative. Outright sale of the company qualifies, as does a restructuring that greatly reduces the size of the company or the nature of its operation. However, if the position formerly held by the returning employee has been eliminated due to an increase in business, or if other positions similar in pay and status exist which the returning person could perform, then re-employment is not "impossible or unreasonable."¹⁰

Pension, 401(k), and Other Benefits: Under USERRA, an employer is also obligated to provide to a qualified returning employee all benefits of employment that are awarded to employees at the level of seniority the returning employee would have achieved if continuously employed. The returning employee is not entitled, however, to a windfall of accumulated "back benefits." Instead, the employee is entitled to receive benefits at the elevated level on a going-forward basis. According to USERRA, this employer obligation applies to all "benefits of employment" including benefits flowing from pension plans, health plans, employee stock ownership plans, insurance coverage, bonuses, severance pay, supplemental unemployment benefits, and vacations. For example, if an employer provides vacation based on tenure, the employee would be entitled to the vacation as if he had been continuously employed. Courts have also held that clothing¹¹ and living quarter allowances¹² qualify as benefits under USERRA.

In addition, the returning employee may elect to make payments to pension, 401(k), or other qualified plans up to the amount that he would have been permitted or required to contribute had he been continuously employed. Such payments may be "made up" by the employee beginning at the time of re-employment, and continuing for a period equal to three times the employee's military service, not to exceed five years.

Just Cause Protection: Once the employee has been re-employed, a significant employer duty attaches. Depending upon the length of military service, USERRA may prohibit termination of the re-employed worker for a finite period of time unless "just cause" for termination exists. For military service of 31-180 days in length, the protection from termination without cause extends for 180 days. For service longer than 180 days, the protection lasts for one full year. In other words, for a re-employed worker who would otherwise be employed at-will, USERRA acts as a temporary employment contract, limiting the reasons for which the employee can be fired.

The rights and responsibilities of employers and employees under USERRA warrant review in light of recent events that our country has experienced. In the near future, when discharged members of the National Guard and Reserves return to their homes and jobs, there will almost certainly be an increase in litigation brought under this statute. Remedies under the statute include compensatory and liquidated damages. Understanding this statute will help employers reduce the chances that they will become the target of this imminent litigation.

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