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Military Leaves of Absence

WITH THE initial number of National Guard and reserve members called up in  support of Operation Enduring Freedom reaching almost 25,000 n1 and the current  number expected to reach up to 50,000, n2 we thought it appropriate to revisit  the issue of leaves of absence from employment for military duty, a topic we  first examined in this space seven years ago. n3

The governing statute in this area is the Uniformed Services Employment and  Reemployment Rights Act of 1994 (USERRA). n4 USERRA is a comprehensive statute  that significantly strengthened and expanded protections available to persons  returning to their jobs after service in the "uniformed services."
 
USERRA extends three basic protections to employees with military service  obligations. First, USERRA prohibits discrimination against such employees,  regardless of whether the employee's obligations are current, completed or  prospective. Second, USERRA provides a right to re-employment for all  employees  not present at work due to military obligations. Finally, USERRA protects the  benefits of employees absent from work due to military service obligations.

A recent case in the Eastern District of New York reinforces the potential  for significant legal exposure in failing to comply with USERRA by assessing  liquidated damages against an employer for recklessly disregarding the statute.  n5 Accordingly, in this month's column, the first of a two-part guide to  employee rights and employer responsibilities under USERRA, we examine USERRA's  historical development, coverage, nondiscrimination requirement, effect on the  provision of health care and its enforcement scheme.
 
In our next column, we will explore the process of re-employment, the rights  afforded to returning employees, limitations upon such rights and the effect of  analogous state laws.

Background

Beginning with the first peacetime draft law passed in 1940, veterans  returning to civilian employment after active duty in the military have enjoyed  a statutory right to reinstatement to a position that was of "like seniority,  status, and pay" as the one they held before entering the military. n6 Congress  reaffirmed this right in 1951 n7 and thereafter extended re-employment rights to  reservists (1955) n8 and National Guard members (1960). n9 In 1967 and 1968,  Congress further expanded protection to reservists and National Guard members to  cover job discrimination on account of their military obligations. n10 Congress  has amended the law several times since then, each time largely recodifying  prior law. n11

USERRA is the most recent development in the evolution of employment rights  for military personnel. Enacted by Congress in 1994 and amended in both 1996 and  1998, n12 USERRA serves a tripartite purpose. First, it is meant to encourage  non-career service in the armed forces by limiting or removing those  disadvantages that may accrue from such service. Second, by providing for prompt  re-employment, USERRA is intended to minimize the disruption to the lives of  those called to duty, their employers and their communities. Finally, USERRA was  enacted to prohibit discrimination against persons because of their service in  the armed forces. n13

Covered Persons

USERRA protects all common-law employees n14 absent from work because of  "service in the uniformed services," whether voluntary or involuntary. n15  "Uniformed service" encompasses not only the Armed Forces, the National Guard  and the Air National Guard, but also the commissioned corps of the Public Health  Service and "any category of persons" the President designates "in time of war  or national emergency." "Service" is broadly defined to include active or  training duties of any kind, National Guard duty, and even absence for an  examination to determine fitness for duty. n16

The statute provides that an "employer" includes both a person or entity that pays salary or wages for work or one that "has control over employment  opportunities," including a person or entity "to whom the employer has delegated  the performance of employment-related responsibilities." n17 Moreover, unlike  other federal statutes that require a threshold number of employees for the  employer to be obligated, USERRA applies to all employers regardless of size.


The definition of "employer" also includes "any successor in interest" to  such person or entity. n18 The legislative history to USERRA suggests that there  is no requirement that a successor in interest have had notice of its  predecessor's responsibilities to employees who are absent due to military  service. n19 A purchaser of the assets of a business, nonetheless, may wish to  take a more conservative approach and inquire whether the seller has any  obligations under USERRA and negotiate with the seller regarding the proper  allocation of any potential liabilities thereunder, even though successor  liability in an asset sale is not specifically contemplated by the statute.

Non-Discrimination Requirement

At its core, USERRA protects employees from discrimination on the basis of  the employee's military service obligations. The statute provides that employers  may not deny their employees "any benefit of employment" because of membership  in, application to join, or performance of any duty for the uniformed  services.  n20 "Benefit of employment" is defined to include "any advantage, profit,  privilege, gain, status, account, or interest" that accrues by reason of
 employment. n21 The limited case law under USERRA confirms this expansive  definition including, for example, employer training and evaluation, clothing  allowances and a regular work schedule within the definition of "benefit of  employment." n22

Employers must grant leave to those employees with military service  obligations on terms at least as generous as USERRA provides, regardless of  whether the employer otherwise maintains a military leave policy. However, if an  employer provides leave for other purposes, employees on military leave are  entitled to the benefits available to employees on other types of leaves. n23  Indeed, according to USERRA's legislative history, employees on military leave  are entitled to the most favorable benefits available. n24 Moreover, while  employers are not required to provide paid military leave, employers must, upon  request, allow veterans to use accrued vacation time or other paid leave.  Employers may not require, however, that such paid time be used. n25


On its face, USERRA does not charge employers with an affirmative duty to  provide notice to employees of their rights and obligations under the act and  there is no case law that indicates such a requirement. Employees nevertheless  should be on notice of these rights because it is Department of Defense policy  to keep present and former service members informed of their rights and because  the Secretaries of the Military Departments and the Commandant of the Coast  Guard are required to inform all applicants as well as active members of these  rights. n26

Health Plans

USERRA requires employers to offer up to 18 months of continuous health  coverage to veterans and their dependents regardless of how they treat other  employees on leaves of absence or whether the employer is covered by COBRA. For  uniformed service lasting less than 31 days, employers cannot require the  employee to pay more than he or she paid for such coverage before the military  leave commenced. By contrast, for uniformed service beyond 31 days, employers  may require, in a manner similar to COBRA, that the employee pay up to 102  percent of the full premium. This coverage may end sooner, however, where the  employee's military obligations do not last more than 18 months and where the  employee fails to properly request reinstatement. In the case of a health plan  that is a multiemployer plan, liability for employer contributions to the plan  shall be allocated either by the plan as the plan sponsor shall provide or, if  the sponsor does not so provide, to the employee's most recent employer. n27

Members of the reserve and National Guard who are called to active duty, as  well as their beneficiaries may also become eligible for health benefits under  TRICARE, the military's health benefits program for active duty service members.  TRICARE serves an important role either as a supplement to employer plans or,  for those who cannot afford or do not want to maintain private coverage, a  complete alternative. A service member's TRICARE eligibility begins on the  effective date of his or her orders. By contrast, families of activated service  members only become eligible if the service member's orders are for a period of  more than 30 consecutive days or for an indefinite period. Eligible families,  however, may choose to maintain their civilian coverage and, due to continuing  relationships with civilian doctors, may not wish to seek health care services  from TRICARE plan doctors. Accordingly, it is important for civilian employers  to note that TRICARE is a secondary payer and will only pay after other health  insurance plans have made their payments for health care services. The only time  that TRICARE is not a second payer is when Medicaid is involved, or if TRICARE  is designated as a supplemental policy by the patient's health care  insurance  policy. n28

Enforcing, Regulating

USERRA charges the Department of Labor with primary enforcement responsibility. The DOL is not merely to render aid to claimants, but rather  must "provide assistance" and investigate "each complaint." The DOL also is  invested with subpoena power to compel attendance and testimony of witnesses and  document production. If the Secretary of Labor determines that a complaint is  valid, the Secretary must make reasonable efforts to obtain compliance. If the  Secretary is unsuccessful in obtaining compliance, the Secretary must report the  investigation results to the complainant and inform that person of his or her  enforcement rights. The person can then either pursue an action on his or her  own or request that the Secretary refer the complaint to the Attorney General,  who, if "reasonably satisfied" that the complaint is valid, may appear on the  person's behalf. Individuals who use private counsel and who prevail on USERRA  claims are entitled to costs and attorney's fees. In no event may a court charge  a complainant fees or court costs in a USERRA action. n29
 
USERRA grants to district courts the authority to require not only employer  compliance but also monetary compensation. Typically, courts will apply a  "substantial or motivating factor" test, similar to the standard applied to  unfair labor practice discharges under the National Labor Relations Act, to  determine whether an employer's adverse employment action was caused by the  employee's reserve status. n30 Moreover, if the court determines the violation  was "willful," it may require the employer to pay the employee an amount equal  to the employee's loss suffered by reason of the violation as "liquidated  damages" in addition to any other rights or benefits owed. n31 Courts are also  instructed to use their full equity powers in facilitating appropriate relief.
 
In our next column, we will consider a veteran's right to seek re-employment  and an employer's subsequent obligation to reinstate employees after the  completion of military service, focusing on timing, job placement and  restoration of benefits.


n1 See defenselink.mil/news/Oct2001/b10032001_bt482-01.html

   n2 See defenselink.mil/news/Sep2001/n09252001_200109251.html.On Sept. 14,  President Bush authorized up to 50,000 guard and reservists to be activated for  up to two years.

   n3 See Jeffrey S. Klein and Nicholas J. Pappas, "Uniformed Services  Employment and Reemployment Act of 1994." New York Law Journal, Dec. 5, 1994 at  p. 3.

   n4 38 U.S.C. @ @ 4301-4333.

   n5 See Fink v. City of New York, 129 F.Supp.2d 511 (E.D.N.Y. 2001) (holding  that willful includes both actual knowledge of a failure to comply with USERRA  as well as a "reckless disregard" of USERRA's terms).

   n6 Selective Training and Service Act of 1940, Pub. L. No. 783, sec. 8, 54  Stat. 885 (1940).

   n7 Universal Military Training and Service Act, Pub. L. 51, ch. 144, sec.  1(s), 65 Stat. 75, 86-87 (1951).

   n8 Reserve Forces Act of 1955, Publ. L. No. 305, sec. 262(f), 69 Stat. 598,  602 (1955).

   n9 Universal Military Training and Service Act, amendment 86 Publ. L. No.632,  74 Stat. 647, 648 (1960).

   n10 Military Selective Service Act of 1967, Pub. L. No. 90-40, sec. 1(a), 81  Stat. 100 (1967), amended by Publ. L. No. 90-491, sec. 1(B), 82 Stat. 790  (1968).

   n11 See Coffy v. Republic Steel Corp., 447 U.S. 191, 194 n.2 (1980).

 n12 See P.L. 105-368 (1998); P.L. 104-275 (1996).

   n13 U.S.C. @ 4301(c).

   n14 The statute defines "employee" as any person employed by an employer. 38 U.S.C. @ 4303(4). This definition is consistent with other federal labor laws,  and although no case law presently exists, should be held to exclude independent  contractors and employees of independent contractors. See Jeffrey S. Klein and  Nicholas J. Pappas, "Worker Classification Under Title VII." New York Law  Journal, Feb. 16, 2001 at p. 3.

   n15 38 U.S.C. @ 4312(a)-(c).

   n16 38 U.S.C. @ 4303(16).

   n17 38 U.S.C. @ 4303(4).

   n18 38 U.S.C. @ 4303(4).

   n19 H.R. Rept. No. 65, 103d Cong., 1st Sess., pt. 1, at 21 (1994).

   n20 38 U.S.C. @ 4311(a).

   n21 38 U.S.C. @ 4303(2).

   n22 See Yates v. Merit System Protections Board, 145 F.3d 1489, 1484 (Fed.  Cir. 1998); See Wiggelsworth v. Brumbaugh, 129 F.Supp.2d 1106, 1110 (W.D. Mich.  2001); Hill v. Michelin North America, Inc., 252 F.3d 307, 312 (4th Cir. 2001).

 n23 38 U.S.C. @ 4316 (b)(1)(B).

   n24 H.R. Rep. 103-65(l), 1994 U.S.C.C.A.N. 2449, 2466.

   n25 38 U.S.C. @ 4316(d). See also Graham v. Hall McMillen Co., Inc., 925  F.Supp. 437 (N.D. Miss. 1996) (decided under pre-USERRA law, but sections relied  on by the court were incorporated into USERRA).

   n26 32 C.F.R. @ 104.5(a); 104.6(a) (7-1-00 Ed.)

   n27 38 U.S.C. @ 4317(3). If the most recent employer is no longer in  business, responsibility will accrue to the plan to provide the required  contribution.

   n28 See www.tricare.osd.mil/reserve.

   n29 38 U.S.C. @ @ 4321-4323.

   n30 See Gummo v. Village of Depew, 75 F.3d 98, 106 (2d Cir. 1996). See also  NLRB v. Transportation Management Corp., 462 U.S. 393, 401, 103 S.Ct. 2469, 2474  (1983).

   n31 See Fink 129 F.Supp.2d 511.

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