April 14, 2006

This is the first part of multiple part article which addresses the new Uniformed Services Employment and Reemployment Rights Act (“USERRA”) Regulations which were recently promulgated by the United States Department of Labor (“USDOL”).

1. INTRODUCTION

With the increased number of deployments of active duty soldiers and the activation of thousands of military reservists following September 11, 2001, it is imperative that employers and attorneys be familiar with the USERRA, 38 U.S.C. §§ 4301-4334. USERRA attempts to mitigate the financial losses an employee may endure as a consequence of service in the uniformed services and his or her return to work.

USERRA is enforced and administered by the USDOL Veterans Employment Training Service. Pursuant to 38 U.S.C. § 4331, on December 19, 2005, the USDOL issued regulations implementing USERRA in an effort to provide guidance to employers and employees regarding their respective rights and obligations under USERRA (the “Regulations”). These regulations became effective January 18, 2006. The Regulations are broken down into six subparts, dealing with the following topics: (A) An introduction to the Regulations; (B) USERRA’s anti-discrimination and anti-retaliation provisions; (C) The steps uniformed service members must take to return to a previous position; (D) The rights, benefits and obligations of individuals in the uniformed services, including those related to health plan coverage; (E) Rights, benefits and obligations of returning veterans and service members; and (F) The role of the USDOL in connection with USERRA. This article reviews the first two subparts of the Regulations.

Due to the comprehensive nature and broad coverage of USERRA and the Regulations, employers would be well advised to review and update leave and related policies and procedures to ensure compliance. Although the Regulations cover a vast array of issues, they are written in an easy to read question and answer format.

2. SUBPART A – INTRODUCTION TO THE REGULATIONS AND THEIR COVERAGE

Subpart A of the Regulations provides a general background of USERRA, including the definitions applicable, the types of service involved and its relation to other laws. USERRA establishes certain rights and benefits for employees and sets out the duties of employers where an employee leaves his or her job for service in the United States uniformed services. It is the most recent in a string of laws enacted to address the employment and reemployment rights of veterans. The predecessors to USERRA were the Vietnam Era Veterans’ Readjustment Assistance Act of 1974,[1] the Soldiers’ and Sailors’ Relief Act of 1940[2] and the Selective Training and Service Act of 1940.[3] USERRA was enacted in an attempt to clarify and strengthen these laws as they relate to reemployment rights and its provisions are intended to be liberally construed.

The Regulations implement USERRA as it applies to states, local governments and private employers. The Federal Office of Personnel Management has issued separate regulations for federal executive agency employers and employees. In addition, USERRA established a separate program to protect the employees of certain federal intelligence agencies.

USERRA was signed into law on October 13, 1994 and its reemployment provisions apply to uniformed service members seeking civilian reemployment on or after December 12, 1994. The anti-discrimination and anti-retaliation provisions became effective on October 13, 1994.

Returning service members are entitled to assistance in their efforts to protect their rights under USERRA. According to 20 C.F.R. § 1002.4 of the Regulations, USERRA requires the Secretary of Labor to provide assistance to “any person with respect to the employment and reemployment rights and benefits to which such person is entitled under [USERRA].” As set forth above, the role of the Secretary of Labor is set out in its own subpart, which will be discussed in greater detail in a future article.

The Regulations broadly define an “employee” as any person employed by an employer.[4] However, the definition of an employee also includes “any person who is a citizen, national or permanent resident alien of the United States who is employed in a workplace in a foreign country by an employer...incorporated or organized in the United States, or that is controlled by an entity organized in the United States.”[5] Unlike the Family and Medical Leave Act of 1993,[6] USERRA does not contain an exception for “key employees”. Professional, executive and managerial positions are protected. Even former employees fall within the protection afforded by USERRA.

The Regulations also contain an extremely broad definition of “employer”. An employer is defined as “any person, institution, organization, or other entity that pays salary or wages for work performed, or that has control over employment opportunities, including – a person...to whom the employer has delegated the performance of employment-related responsibilities”.[7] This definition also includes the Federal Government, states, successors in interest to employers and any entity or individual which has denied initial employment in violation of USERRA. The Regulations adopt the view taken by some federal courts which have held that individual supervisors may be liable under USERRA.[8] Although several civil rights statutes, such as the Americans with Disabilities Act[9] and Title VII of the Civil Rights Act of 1964,[10] do not provide for individual liability, the USDOL has not included a similar restriction on liability in the Regulations. Therefore, a supervisor or manager may be held personally liable under USERRA where he or she has sufficient control over an employee and has been “delegated the performance of employment-related responsibilities,” such as the power to hire and fire.

The definition of an employer is also broad enough to include an insurance company, even if it does not actually employ the individual. An employer includes any employee pension benefit plan, as that term is described in the Employee Retirement Income Security Act of 1974 (ERISA).[11] Congress included these benefit plans as employers so that these entities would not be able to refuse to modify their policies and effectively prevent direct employers from complying with USERRA.[12] However, entities to whom employers or plan sponsors have delegated purely ministerial functions regarding the administration of benefit plans, such as the mere preparation and maintenance of plan benefit forms, will not be considered as employers under USERRA.

An individual will be deemed to be performing service in the uniformed services when he or she is engaged in any of the following: active duty, active and inactive duty for training, National Guard duty or examinations to determine fitness for the performance of such a duty.[13] Funeral honors duty, certain service upon activation of the National Disaster Medical System (“NDMS”) and participation in an authorized training program also qualify as service in the uniformed services. Although National Guard duty is included in the definition of service, only National Guard duty under federal control is included. Service under state law is not protected, but many states have their own sets of laws protecting National Guard members. The uniformed service protected by USERRA includes all training and service, regardless of whether it is performed on a voluntary or involuntary basis or whether in time of peace or war.[14]

The Regulations define the “uniformed services” to include the Armed Forces as well as the Army National Guard and the Air National Guard, when engaged in active or inactive duty training or full-time National Guard duty; the commissioned corps of the Public Health Service; and any category designated by the President in time of war or national emergency. Active components of the Armed Forces are covered by USERRA along with traditional National Guard and reserve personnel. Although service with the NDMS qualifies as “service in the uniformed services,” an individual service with NDMS is not considered a member of the uniformed services for the purposes of USERRA.[15]

The protections afforded by USERRA are considered to be a floor for the employment and reemployment rights and benefits of those covered individuals. This means that an employer may provide greater rights than those under USERRA, but the employer may not refuse or reduce any benefit provided by USERRA. If an employer provides a benefit which is greater than that required under USERRA, the employer is still required to fully comply with USERRA and is not permitted to reduce or limit any other benefit under USERRA solely due to offering any other benefit which is greater than that required. USERRA supersedes any state law, contract, agreement, policy, plan or practice which reduces or limits any right or benefit provided by USERRA. However, where any federal or state law, contract, agreement, policy, plan or practice which establishes a benefit more beneficial than those provided by USERRA, those protections will be upheld.

3. SUBPART B – ANTI-DISCRIMINATION AND ANTI-RETALIATION PROVISIONS

USERRA provides protection for members of the uniformed services against discrimination and retaliation in employment and reemployment. According to the Regulations, USERRA protects not only an employee returning to an employment position, but also applicants for employment. Specifically, the Regulations provide that an employer may not deny initial employment, reemployment, retention in employment, promotion or any other benefit to an individual based upon his or her “membership, application for membership, performance of service, or obligation for service in the uniformed services.”[16] It is also impermissible for an employer to withdraw an employment offer due to the applicant being called into service.[17]

Employers are also prohibited from retaliating against an individual by taking any adverse employment action due to that individual having participated in an action to protect past, present or future members of the uniformed services in an effort to exercise their rights under USERRA. This includes testifying or making a statement in connection with a proceeding under USERRA, taking any part in a USERRA investigation or exercising any right under USERRA.[18] These anti-retaliation protections apply whether or not the individual seeking to protect rights under USERRA has actually performed service in the uniformed services. Civilian employees will be protected when seeking to protect the rights of fellow employees who are serving or have served in the uniformed services.

USERRA’s prohibitions against discrimination and retaliation apply to all covered employers and all employment positions, regardless of duration. This includes employment positions which are for “a brief, nonrecurrent period, and for which there is no reasonable expectation that the employment position will continue indefinitely or for a significant period.”[19] Although USERRA’s discrimination and retaliation prohibitions apply to these brief, nonrecurrent positions, there is no right of reemployment associated with these types of positions.

The initial burden of proving discrimination or retaliation in violation of USERRA rests with the individual seeking protection under USERRA. That individual must prove that “a status or activity protected by USERRA was one of the reasons that the employer took action against him or her.”[20] A status or activity is protected if it falls into one of the following categories: (A) Membership or application for membership in a uniformed service; (B) Performance of service, application for service, or obligation for service in a uniformed service; (C) Action taken to enforce a protection afforded under USERRA; (D) Testimony or a statement made in or in connection with a USERRA proceeding; (E) Any participation in a USERRA investigation; or (F) Exercise of a right provided by USERRA.[21] To meet its burden, the individual must prove a causal connection between the protected activity or status and the adverse employment action. The individual does not need to prove that the protected status was the sole cause of the employment action, just that it was a motivating factor and was “one of the factors that a ‘truthful employer would list if asked for the reasons for its decision.’”[22]

4. SUMMARY

As set forth above, USERRA has become more relevant in recent years. USERRA’s coverage is extremely broad and employers, as well as employees should have an understanding of USERRA and the Regulations in order to be informed about their rights and responsibilities. The remaining subparts contained in the Regulations will be reviewed in subsequent articles.