COVID-19: How do Servicemember Employee USERRA Rights Impact Employers?

In this time of extraordinary economic upheaval and record-high unemployment due to COVID-19 quarantining and shutdowns, employers are implementing employment policies, layoffs, and terminations without fully understanding the rights of their servicemember employees or what they need to do to maintain compliance with the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). When implementing such policies, employers should be careful not to violate USERRA. A servicemember’s employment rights depend on her status at the time the employment actions are taken.

Scenario 1: The servicemember is on Military Leave of Absence (MLOA) when terminated.

The first scenario is where the employee is actually on an MLOA at the time the employer terminates the employment. Provided the employee would otherwise meet the five eligibility requirements under USERRA, upon application for reemployment, the employee is informed that he is either terminated or on a “layoff” status. Under USERRA, the servicemember is to be put into the same position he would have had had he remained continuously employed during military service—as though he was on an “escalator” during his military service. Thus, the employee may be reemployed on a “layoff” status since under USERRA the “escalator” may go down, and the reemployment position may, in fact, be unemployment.

If there is a “layoff” status or list that the employer has in place, then the reemployment position is the return of the servicemember to the level on that list that he would have occupied had he not been on an MLOA at the time of the original layoff. If there is no such status, the position is simply one of unemployment. Servicemembers should be mindful of the need to “reapply” for that employment position, i.e., to give notice, within the deadlines provided in USERRA following discharge. Otherwise, it may be argued that they failed to meet the five basic requirements for eligibility.

Scenario 2: The servicemember is NOT on MLOA when terminated.

If the servicemember is not on MLOA status at the time, then the reemployment provisions of USERRA do not apply. However, the anti-discrimination provisions of USERRA Section 4311 do limit the employer’s decisions. Simply put, the employer’s adverse employment decisions may not be motivated by the employee’s military service. If an employer implements an objective process or standard in choosing who is to be terminated, such as one strictly based upon seniority or longevity of employment then the decision would not violate USERRA.

However, many employers do not implement a layoff policy based solely upon objective standards such as seniority. When that is the case, the employer injects some level of subjectivity into the process of selecting who is to be terminated, and the decision-making process will be scrutinized under USERRA to ensure that the employee’s military service was not a motivating factor—whether intentionally discriminatory or otherwise.

One can easily imagine an employer that innocently considers military service in the decision, for instance choosing to lay off a servicemember because she is not available during drill weekends or during annual training or who has recently given notice that she will soon be on an extended deployment for the military. Nevertheless, if the employee’s military service was a motivating factor in the decision leading to his termination, it will likely be deemed a USERRA violation, and the employer is non-compliant. Under USERRA, once an employee demonstrates that his military service was “a motivating factor,” the only way for an employer to escape liability is for the employer to prove it would have made the decision notwithstanding the improper motivation based on military service.

Scenario 3: The servicemember is NOT on military orders when terminated, but has recently returned from MLOA.

There is a special situation involving a servicemember who has recently returned from an MLOA. Under USERRA, recently reemployed servicemembers who were on an MLOA longer than 30 days are protected from termination except for cause. If the military orders were from 30 to 180 days, the employee is protected for 180 days, and for periods longer than 180 days, the employee is protected from discharge except for cause for a period of one year.

Although the employee is protected from discharge except for cause, the Act specifically recognizes that “If, based on the application of other legitimate nondiscriminatory reasons, the employee’s job position is eliminated, or the employee is placed on layoff status, either of these situations would constitute cause for purposes of USERRA.” Thus, as long as military service is not a motivating factor for selecting a particular employee for termination, the employer may terminate or layoff that employee notwithstanding the “for cause” protections afforded a recently reemployed servicemember.

Scenario 4: The employer rehires a recently terminated servicemember employee.

Perhaps the area with the most uncertainty under USERRA in this COVID-19 era involves the hiring practices of employers once our economy returns to normalcy. Undoubtedly, many employers will begin hiring once the government-imposed restrictions are lifted. When they do so, what are the USERRA-related issues that should guide their decisions and how do they maintain compliance?

A. Callback List Order: If a layoff or callback list is established based solely upon nondiscriminatory bases, such as seniority, then employers should ensure that any servicemembers protected by USERRA are on the list and in the proper order for recall/rehiring purposes.

B. Subjective Factors: If there is a list for rehiring previously employed applicants based upon subjective factors, employers should reevaluate those criteria to ensure that servicemembers, whenever employed, are properly categorized on that list.

C. Informal Policies: Where there is no “list” or other formal policy for rehiring prior employees, if you are making any effort to inform, recruit, interview, consider or employ those employees, you must do so without ANY consideration of whether such prior employee is, was, or will be a servicemember.

D. Prior Employment Irrelevance: If you hire replacement employees following the COVID-19 crisis with a “tabula rasa” policy in that there is no consideration as to whether the applicant had a prior employment relationship with the company, then you must ensure that the hiring process does NOT consider the applicant’s military service in NOT hiring him.

E. Corporate Transformation: If your company has undergone some legal transformation, through bankruptcy, reorganization, sale, merger, or otherwise, it may be obligated to comply with USERRA’s reemployment obligations regardless of its status as a successor entity.

F. Favorable Placement: If an employer wishes to convey more rights than required by USERRA to servicemembers, it can do so notwithstanding any contrary laws, contracts, procedures, or collective bargaining agreements that say otherwise. Thus, if an employer wants to reemploy a servicemember before others on a “recall list,” they may do so notwithstanding any CBA, contract, or law that says otherwise.

Minnesota State Law Issues

Regardless of the state in which you live, you should be aware of local state laws that relate to servicemember employees. A state may not limit the rights of servicemember employees under USERRA, but it can increase those rights. In Minnesota, USERRA protections are extended to Air and National Guard members who are called up for any state’s service—which would not be otherwise protected under USERRA.

Public employees in Minnesota are given additional protections, such as protections against layoffs while on military duty and only for cause after a hearing. Indeed, these special protections are arguably extended to employees of private employers “in time of emergency declared by the proper authority of any state.” Minn. Stat. § 192.261 Subd. 6. This untested provision may provide additional rights and protections to every employee in Minnesota who is called to active service during the emergency declared by our state governor.

Conclusion

Any employer making employment decisions in these extraordinary times should be mindful of USERRA requirements and compliance with the local state laws affecting servicemember employees. If you have any additional questions, please contact me, your local ESGR representative, or the Department of Labor VETS office for further guidance. For more information, visit www.ESGR.mil.

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.

The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement.