“Friendly Fire” in the Workplace: USERRA and Hostile Work Environment Claims

Since the Uniformed Services Employment and Reemployment Rights Act (USERRA) was enacted in 1994, plaintiff servicemembers have tried to incorporate the “hostile work environment” concept used in other federal employment laws in claims involving discriminatory conduct by employers at least partially motivated by the employee’s uniformed service. This concept allows a plaintiff to recover under a “wrongful discharge” theory based upon the employer’s discriminatory animus toward that employee, even when the person voluntarily quits rather than being terminated. Generally, these attempts were unsuccessful since USERRA lacked the phrase “the terms, conditions or privileges of employment” in its definition of employment benefits. However, in November 2011 Congress amended USERRA to include this language and expand its protections to cover situations involving a “hostile work environment.”

Historically, a “hostile work environment” claim involves situations where the employer, rather than simply terminating the employee’s employment because of a protected characteristic, engages in a pattern and practice of harassment such that the employee finds it intolerable to continue employment and voluntarily quits. In such situations, the employee is considered to be “constructively discharged.” In 2013, the Supreme Court had occasion to clarify the “hostile work environment” claim in the context of a claim under Title VII (Civil Rights Act of 1964). Vance v. Ball State University, 133 S.Ct. 2434 (2013). An employer may be liable for hostile work environment harassment by employees who are not supervisors if the employer was “negligent in failing to prevent harassment from taking place.” Important factors used to determine whether the employer was negligent include “the nature and degree of authority wielded by the harasser,” as well as “[e]vidence that an employer did not monitor the workplace, failed to respond to complaints, failed to provide a system for registering complaints, or effectively discouraged complaints from being filed.”

With the amendments from November 2011, employers now risk liability under Section 4311 if they engage in or permit a pattern of harassment, intimidation, or discrimination based upon the employee’s uniformed service that ultimately causes the servicemember to voluntarily terminate employment, just as if she had been terminated. Even if the hostile conduct is engaged in by coworkers rather than supervisors, if the employer was negligent in failing to discover and prevent that harassment, it may still be liable for wrongful termination damages under USERRA.

A “constructive discharge” may be found even when the employer fails to properly reemploy a returning servicemember in the “escalator” position, as required under Section 4312. Serricchio v. Wachovia Sec. LLC, 658 F.3d 169, 191 L.R.R.M. (BNA) 2617, 94 Empl. Prac. Dec. P 44262 (2nd Cir. 2011). In Serricchio, the Second Circuit concluded that the employer violated USERRA when it reemployed the servicemember at the same commission rate but without the established book of business as when he left. The court concluded that “Wachovia was not required to provide Mr. Serricchio his exact previous book of business so long as what it gave him was the opportunity to reenter the workforce with comparable status and commission opportunity as of the date of reinstatement that he would have had had he not taken military leave, regardless of whether the same clients were in his substituted book of business provided on his return.” However, because Serricchio voluntarily quit, the court next concluded that the jury was permitted to find that he was “constructively discharged” because the reemployment position essentially forced him to start over in rebuilding his book of business, and that the commissions he would expect to receive from this lower position were inadequate to support him and his family. Thus, he had no choice but to quit and seek employment elsewhere.

What does this mean for servicemembers and their civilian employers? The obvious answer is that harassment motivated by the employee’s uniformed service that forces him to resign may subject the employer to liability, just as if he/she was terminated, especially if the harassment was perpetrated by a supervisor or the employer did not monitor the workplace appropriately. More complicated issues include the following:

• Section 4311(a) Discrimination: Even if a servicemember resigns, if it was the result of workplace harassment by supervisors or coworkers based upon her uniformed service, the employer may be held liable. Considering there is no statute of limitations for USERRA claims, the employer may be exposed to “wrongful discharge” claims long after the servicemember left employment.
• “Employer” Under USERRA: Perhaps the most significant issue from the 2011 “hostile work environment” amendment arises from the expansive definition of employer under USERRA. “Employer” is defined broadly under USERRA to include any individual or entity “that has control over [the servicemember’s] employment opportunities.” Thus, servicemembers working as contractors, contract security guards, employees placed by temp agencies, and any other position in which they are supervised by someone else, may have claims against entities other than their direct employer.
• Failure to Reemploy in the “Escalator” Position: Even when a returning servicemember is reemployed, if the reemployment position is so inadequate that the servicemember voluntarily terminates employment to find reasonable employment elsewhere, the employer may find itself liable under a “constructive discharge” theory.

To avoid future claims for wrongful or “constructive” discharge under USERRA, employers should ensure that their policies and procedures include the following:

• 1. Conduct exit interviews of servicemember employees, whether voluntarily or involuntarily terminated, to reveal any circumstances that may be the basis for a “hostile work environment” claim, and thoroughly investigate and document the investigation;
  2. Conduct regular training to educate managers, supervisors and coworkers regarding appropriate workplace conduct;
  3. Institute an effective and confidential complaint process for employees who may be subject to harassment and intimidation;
  4. Thoroughly document any complaints of hostility in the workplace and any subsequent investigation, and maintain that documentation to protect against future claims; and
  5. Review the policies and procedures for reemploying servicemembers to ensure compliance with USERRA.

If you are a servicemember or employer who has questions about USERRA rights and obligations, please contact your local Department of Defense ESGR Ombudsman or www.ESGR.mil. For a more thorough review of USERRA, please download my pamphlet Employing Servicemembers: What You Should Know About USERRA, from the Small Business Assistance Office, Minnesota Department of Employment and Economic Development.

Mathew M. Meyer, Esq., Cornell Law ’95, is a business law, regulation, and commercial litigation attorney in the Twin Cities area. A Marine Veteran, Mr. Meyer is a long-time volunteer and mediator with the Department of Defense ESGR program.  He is the Minnesota ESGR Ombudsman Director and Military Liaison to local Marine and Navy Reserve units, and frequently advises servicemembers and employers regarding USERRA legal issues. All opinions, comments, and analysis are his alone and do not reflect those of the Department of Defense ESGR program, or any other organization.

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