Employee’s Military Service as Basis for Employment Discrimination

We frequently hear in the media about workplace discrimination based on gender, race, national origin, age, or disability, which is all too common. Most Americans, however, would be surprised to learn that thousands of workers are subjected to blatant and harmful discrimination each year purely because they are veterans or are currently serving in the Armed Forces – and that this discrimination harms our national security by discouraging participation in the National Guard and Reserve.

Despite the widely publicized job skills that veterans and servicemembers provide, such as leadership, education, training, values, and teamwork experience, many civilian employers believe that their employees’ military duties are inconvenient to their businesses, and some believe that their employees should not be allowed to take military leave and return to their civilian jobs without interruption. For more than 70 years, federal laws have protected American workers’ rights to serve in the military without losing their civilian jobs and to enforce their rights when they face discrimination or retaliation.

Uniformed Services Employment & Reemployment Rights Act (USERRA)

Enacted in 1994 to strengthen longstanding protections, USERRA ensures that individuals who serve or have served in uniformed services receive strong statutory protections. Because our military heavily relies on men and women who volunteer to serve in the National Guard and Reserve, Congress has guaranteed that these honorable Americans’ civilian jobs must be protected when they serve in the military and that they must be free of discrimination based on their service or status.

Specifically, USERRA protects the rights of past or present uniformed service members, as well as those who have applied for service, to be free from discrimination by all employers of all sizes (including private employers and federal, state, and local governments) based on military service or status. The law prohibits discrimination in hiring, promotion, wages and benefits, and termination, as well as harassment. Service members also have a right to take military leave without penalty and a right to be reemployed in their civilian jobs after serving. The law also requires employers to make pension contributions to employees for the period of time that they served in the military so that their retirement security is not jeopardized by their military service. And servicemembers have certain rights to have their healthcare insurance benefits continued during their military service. Additionally, an employer cannot retaliate against anyone – a service member, veteran, or anyone else – who exercises a right or assists in the enforcement of a person’s USERRA rights.

Despite the importance of this federal law, each year thousands of employees report of USERRA to the Department of Labor and the Department of Defense. According to a report to Congress, the U.S. Department of Labor received more than 1,100 complaints from veterans and servicemembers about USERRA violations. Among those complaints:

• 39.6% claimed discrimination based on military obligations
• 18.7% involved issues regarding reinstatement after military service
• 11.5% included compensation or benefits issues, including pay rates, healthcare, pension, and vacation
• 11.0% reported retaliation for exercising or enforcing their rights under USERRA
• 7.4% alleged discrimination in initial hiring
• 6.6% cited failure to promote based on military service

Reemployment After Military Service

Members of the National Guard and Reserve stand to benefit the most from the reemployment rights that USERRA provides. Because of our military’s extensive commitments throughout the world and our use of reservists for critical duties at home, servicemembers have been called to active duty for years (sometimes for multiple tours), and have often left civilian jobs with income and benefits on which their families rely. Ensuring that their civilian jobs will be waiting for them provides returning veterans peace of mind so that they and their families won’t have to worry about making ends meet when their military service concludes.

As long as a service member has five years or less of cumulative military service with his or her employer (and many types of military service are exempt from the five-year limit), give advance written or verbal notice to the employer of his or her military service, and seeks reemployment in a timely manner after an honorable or qualified discharge, the servicemember has the right to be restored to the same position (or in some cases a better position that the employee would have attained if he or she had not served in the military). When a service member is reemployed, he or she is entitled to the reinstatement of all the same rights and benefits associated with that position, and cannot be required to wait for any benefit to be reinstated.

Pension Rights of Servicemembers

When an employee returns from a period of military service, USERRA requires that the servicemember receive pension contributions or credit from his or her employer for that period of military service. When the employee’s ordinary compensation is not reasonably certain-such as workers who regularly earn overtime, work varying hours, or receive pay based on commissions-the employer must determine the employee’s pension contributions using the employee’s average compensation from the 12-month period prior to the employee’s military service.

Service members and Veterans Forced to Waive Their USERRA Rights

Many employers find USERRA’s protections to be unduly burdensome and have tried to circumvent the law, most notably through employment agreements that take away the rights of veterans and service members. As recent lawsuits and a split among the federal appellate courts demonstrate, this contracts-and specifically the mandatory arbitration agreements they contain-have undermined the powerful rights that USERRA confers.

For example, in a case decided by the U.S. Ninth Circuit Court of Appeals, a Navy reservist who was mobilized to Afghanistan filed a lawsuit claiming that his civilian employer wrongfully terminated him in violation of USERRA on his last day of work before deployment. The employer argued that a contract the reservist signed included an arbitration clause that barred him from enforcing his USERRA rights in a federal or state court. The federal district court held that the arbitration agreement stripped him of his right to sue under USERRA, and the Ninth Circuit regrettably agreed, joining some, but not all, of the other Courts of Appeals that have addressed the issue.

In response to this and prior cases, bipartisan legislation was introduced in 2016 to clarify that USERRA prohibits employers from forcing servicemembers and veterans to waive their procedural rights, including their right to enforce their USERRA rights in court.

Until the U.S. Supreme Court resolves the split among the Circuits or Congress clarifies that USERRA bars forced arbitration of USERRA claims, servicemembers and veterans should be thoroughly aware of their employment rights, review workplace policies and employment contracts, and if necessary, consult an attorney experienced in successfully handling USERRA matters.