USERRA Compliance Alert: Class Action Suit Arose From Walmart’s Non-Compliant Military Leave of Absence Policies

The Uniformed Services Employment Reemployment Rights Act of 1994 (“USERRA”) contains many pitfalls for unwary employers. It also imposes significant penalties upon those who willfully ignore it and refuse to understand the obligations it imposes upon employers and the benefits it guarantees to employees who are called to military service. Do not ignore or delay compliance with USERRA.

The Walmart Class Action Litigation

Today (January 5, 2021) Walmart announced that it has settled a class action lawsuit arising from its military leave of absence (LOA) policies. Public sources indicate that the settlement included $14 million to be paid to class members who were servicemember employees on a military LOA sometime during the past ten years.

Plaintiff, Nickolas Tsui, a servicemember employee, claims that he was not provided a paid leave of absence for military service while employed by Walmart. The class action lawsuit alleges that Walmart violated the USERRA requirement that employers provide servicemember employees the most favorable leave of absence policy for any comparable leave of absence. 38 U.S.C. 4316(b)(1)(B); 20 CFR 1002.150(b).

Although USERRA does not require employers to pay servicemembers for a military LOA, it does require that they receive the most favorable LOA benefits provided to any other employees on a comparable LOA. Walmart’s policies allegedly provided full pay for employees on short-term LOA for such reasons as bereavement leave and jury duty. According to reports, sometime in 2017, Walmart began providing “differential pay” – the difference between what the employee would earn at Walmart and his/her actual pay while in the uniformed service. However, it was still not as “beneficial” to the employee as full pay during the LOA.

What is the most favorable leave of absence policy under USERRA?

So, what is the law regarding USERRA “most favorable leave of absence policy” requirement? The Department of Labor regulations state that “the [servicemember] employee must be given the most favorable treatment accorded to any comparable form of leave when he or she performs service in the uniformed services.” 20 C.F.R. § 1002.150(b) (applying 38 U.S.C. § 4316(b)(1)(B)); see also 70 FR 75265 (citing favorably Waltermeyer v. Aluminum Co. of America, 804 F.2d 821, 825 (3rd Cir. 1986)).

The Rule states that the “duration of leave” is the “most significant factor to compare” to determine if the LOA is “comparable.” Thus, it provides an example of two leaves that are not comparable – a two-day bereavement leave compared to a lengthy deployment. Id.

What are “comparable” leaves of absence?

The question comes down to what LOAs are comparable under the Rule, and therefore should be provided to servicemembers who are performing military service. According to the plaintiff in the Walmart lawsuit, the short-term LOA for “bereavement and jury duty” is comparable to monthly drill obligations and annual training requirements – which are typically less than 30 days in duration.

If “duration of the leave” is the most significant factor, then it is doubtful a lengthy deployment would be comparable to any other LOA policy provided by the employer. However, Reserve Component Servicemembers are required to drill one weekend a month and to train two weeks annually. In addition, they are often given short-term orders that may last for weeks or even months. In these situations, one can view other LOAs as “comparable,” such as parental/maternity leave, medical leave, jury duty, and bereavement leave.

Although the Rule observes that secondary factors to determine whether a LOA is comparable include “purpose of the leave and the ability of the employee to choose when to take the leave,” Id., the significance of these factors is questionable. USERRA generally does not distinguish between “voluntary” and “involuntary” orders when considering whether the servicemember has USERRA rights. The Rules also contain little guidance as to how the “purpose” of the leave would impact the analysis. One factor specifically rejected as impacting this analysis is whether the leave is “paid or unpaid” by some third party. 70 FR 75264.

Since “[USERRA] is to be liberally construed for the benefit of those who left private life to serve their country in its hour of great need,” Fishgold v. Sullivan Drydock and Repair Corp., 328 U.S. 275, 285 (1946), courts would likely find many of the short-term LOAs described above comparable to uniformed service.

Even then, if the employer provides compensation for a certain period of a lengthy LOA, the same benefit would likely have to be provided to a servicemember on a lengthy military LOA. For example, an employer who provides paid LOA for the first month of a lengthy medical or parental leave would likely have to provide the same benefit to a servicemember on training or a deployment.

What benefits are implicated?

Typically, the “benefit” at issue under this Rule involves lost pay that was provided to non-servicemember employees under comparable LOA policies. But there are other benefits that may be implicated by this Rule. For instance, some of the benefits that may be an issue include:

• accrual of bonuses or vacation days during the LOA
• promotional opportunities available to absent employees
• continued employer pension contributions

Don’t delay. Review your LOA policies for compliance now.
For those employers, human resources professionals, employment law attorneys, and servicemembers who have attended one of my many USERRA/ESGR briefings over the years (or my blog readers), it does not come as a surprise to learn that USERRA requires that employers provide their servicemember employees with the most favorable leave of absence policy provided for any comparable leave of absence.

Employers who are not familiar with this issue should consider refocusing their human resources staff to fully understand and follow USERRA as part of their compliance plan. This is true especially since there is no statute of limitations under USERRA, and the issue could be raised by an employee, the Department of Labor VETS, or the Department of Justice long after the actual infraction occurred.

There is a substantial risk that damages will accrue indefinitely since there is no statute of limitations limiting USERRA claims. Indeed, the Walmart case is seeking damages for the “class” going back to 2004. There are complicated statute of limitations issues involved in claims under USERRA from 1994 to 2008. However, USERRA’s predecessor, the VRRA, did not have a statute of limitations, and the DoL VETS continues investigating cases for veterans’ employment rights under that statute. It is therefore advisable to pay attention to this issue now or face substantial claims in the future.

ESGR can provide assistance.

USERRA covers almost all civilian employers. It governs their rights and responsibilities when hiring, employing, or terminating servicemembers. If you have questions regarding this or any other issue covered by USERRA, the Department of Defense’s Employer Support of the Guard and Reserve Program (ESGR) provides assistance, guidance, and resources for both servicemembers and their civilian employers.

Portions of this article have been reprinted and updated from my February 2017 article “Is your business violating USERRA? #1: Are you giving them your best? Servicemembers are entitled to the Employer’s ‘most-favorable leave-of-absence policy” in February 2017.

Image credit: “Walmart” by JeepersMedia is licensed under CC BY 2.0