LABOR & EMPLOYMENT PRACTICE GROUP. October 2001 EMPLOYMENT RIGHTS OF NATIONAL GUARD AND RESERVE MEMBERS MOBILIZED TO COUNTERACT TERRORISM

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1 LABOR & EMPLOYMENT PRACTICE GROUP October 2001 EMPLOYMENT RIGHTS OF NATIONAL GUARD AND RESERVE MEMBERS MOBILIZED TO COUNTERACT TERRORISM On September 14, 2001, President Bush issued an Executive Order authorizing the call up of members of the National Guard and Reserves in the wake of the terrorist attacks in New York, Pennsylvania, and Washington, D.C. The Executive Order currently allows for the mobilization of up to 50,000 members for as long as 24 months. Given the potential impact this may have on employers, it is vital to understand the legal rights of workers who may be called to active duty. The Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C ( USERRA ), is the latest version of a series of federal statutes first enacted in the 1940s that are intended to give job protections to those individuals who serve in the uniformed services. Signed into law in October 1994 in an effort to correct some of the problems encountered during Operation Desert Storm, USERRA seeks to ensure that those who perform military service can retain their civilian employment and benefits. USERRA also broadly prohibits discrimination based on military service and provides enhanced protection for disabled veterans. The following information is meant to answer some of the common questions about USERRA. Individuals Protected by USERRA USERRA protects individuals who are serving or have served in the uniformed services, which are defined as: The Army, Navy, Marine Corps, Air Force, or Coast Guard; The Army Reserve, Naval Reserve, Marine Corps Reserve, Air Force Reserve, or Coast Guard Reserve; The Army National Guard or Air National Guard; The Commissioned Corps of the Public Health Service; and Any other category of persons designated by the President in time of war or national emergency. A few notes about these categories are in order. First, members of the National Guard who are serving under state authority are not covered by USERRA. Many states, however, have their own USERRA-type statutes which offer similar protection for these members. These state statutes also routinely protect military service under federal authority and sometimes provide better protections to the employee than USERRA. Therefore, employers are advised to 191 PEACHTREE STREET ATLANTA, GA / PENNSYLVANIA AVENUE, N.W. WASHINGTON, DC / AVENUE OF THE AMERICAS NEW YORK, NY / LOUISIANA, SUITE 3300 HOUSTON, TX /

2 familiarize themselves with the relevant state laws governing military service. Second, President Bush has already declared the recent terrorist attacks a national emergency, opening the possibility that a number of non-military persons may qualify for USERRA protections under the last category of protected individuals. Finally, USERRA does not distinguish between voluntary service and involuntary service. In other words, workers who volunteer for active duty in the wake of the terrorist attacks enjoy the same protections as those who are involuntarily called up. Employers and Job Positions Covered by USERRA USERRA applies to all private employers, state governments and their subdivisions, and all branches of the federal government. Unlike some discrimination statutes, there is no small business exception. All job positions are covered by USERRA, unless the employer can prove that the job in question was truly a temporary position (i.e., the position was held for a brief, nonrecurring period). Employees Responsibilities in Order to Enjoy the USERRA Protections To enjoy his or her employment rights, USERRA imposes the following responsibilities on the employee: Advance Notification. The employee or a responsible officer from the employee s military unit must give advance notice to the employer before the employee leaves for active duty. The notice may be either oral or written and is not required if military necessity or time constraints prevent giving notification. Employees are also required to provide to their employer, upon request, documentation of their entitlement to the benefits of USERRA after their return from a military service of 31 days or more. The employer, however, cannot refuse prompt reemployment if the documentation is not readily available. Character of Service. Employees must be discharged from military service under honorable conditions. In other words, employees who receive dishonorable discharges, bad conduct discharges, discharges under other than honorable conditions, and those who are dismissed or dropped from the rolls for disciplinary reasons are not entitled to the USERRA protections. Duration of Service. Generally, employees can be away from their civilian job for up to five years and still enjoy the USERRA protections. However, some categories of military service do not count toward this five year limit, including service in time of war or national emergency such as that accompanying the current Executive Order. Thus, the individuals serving on military duty under the current Executive Order could arguably be entitled to protection indefinitely, and when their current service ends, the five year limitation period will start anew for any future service. Reporting Back to Work. Employees must report back to work (or, in some cases, apply for reemployment) in timely fashion, depending on the length of the preceding military service, as follows: 2

3 Service of 1 to 30 days -- The employee must report back to work at the beginning of the next regularly scheduled work period on the first day following completion of service and expiration of an 8-hour rest period following safe transportation home. Service of 31 to 180 days -- Application for reinstatement must be submitted no later than 14 days after completion of military service. Service of 181 or more days -- Application for reinstatement must be submitted no later than 90 days after completion of military service. Any service which results in injury -- Returning employees who are hospitalized for or convalescing from injuries sustained or aggravated by military service automatically receive an extension of the preceding deadlines for reporting back to work. However, the recovery period may not exceed two years. Specific Rights Employees Have Under USERRA REEMPLOYMENT USERRA provides that upon completion of military service, the returning employee shall be promptly reemployed. Under an escalator principle, the returning employee is entitled to the position that he or she would have achieved had the employee been continuously employed. In other words, the employee is entitled to the same job plus the advancement that would have accrued during the period of active service. For example, if the employer has a formal seniority system, the employee returns to the seniority escalator as if he or she continuously worked for the employer. USERRA also requires that the employer make reasonable efforts to train or retrain returning employees so that they will qualify for any position that they are entitled to fill. USERRA specifically clarifies the escalator principle based on the length of the employee s military leave: Service of 1 to 90 days: Reemployment in the job the person would have held had he or she remained continuously employed, so long as the person is qualified for the job or can become qualified after reasonable efforts by the employer; or, if the person cannot become qualified, in the position the person was employed on the date of the commencement of the military service. Service of 91 or more days: The same as for service for 1 to 90 days, or a position of like seniority, status and pay, so long as he or she is qualified; or, if the person cannot become qualified, in the position the person was employed on the commencement of the military service or a position which nearly approximates that position. Employers, however, are not obligated to provide reemployment at all for a returning military member if the employer s circumstances have so changed as to make such reemployment 3

4 impossible or unreasonable, or if reemployment would impose an undue hardship on the employer. These exceptions are difficult to prove, however. Finally, reemployment of returning military members may mean that an interim worker will have to be moved or displaced. Thus, employers should advise temporary replacement workers up front that their jobs are subject to displacement if the returning reservist requests reemployment. CONTINUATION AND REINSTATEMENT OF BENEFITS 1 Health Care Plans An employee mobilized for military service is entitled to continued coverage under a company health plan. If requested, employers must continue to carry the employee and his or her qualified dependents on the company health plan for up to 30 days of service, at the normal cost to the employee. USERRA also provides that members who are on military duty for more than 30 days may elect to continue employer-sponsored health care for themselves and their qualified dependents for up to 18 months, but the employee may be required to pay up to 102 percent of the full premium in these cases (similar to COBRA). If company health care coverage is discontinued by the employee while on military service, he or she is entitled to immediate reinstatement of coverage upon reemployment with no waiting period or exclusion for preexisting conditions. However, this reinstatement protection does not apply to any illness or injury determined by the federal government to be service-connected. Pension Plans USERRA provides certain protections to employees regarding their interests in 401(k), profit sharing, pension, and similar kinds of benefit plans maintained by their employer. USERRA requires that the employer provide service credit to a reemployed person for purposes of participation, vesting, and benefit accrual. The employer is liable for funding any accrued benefits arising from granting such service credit. Where a participant s accrued benefit is based in part on his or her compensation, the returning employee s compensation during the period of military service shall be the rate of pay the employee would have received from the employer during that period, or if that amount is not reasonably certain, the employee s average compensation from the employer for the period immediately preceding the military service. If accrued benefits are based on employee contributions, the reemployed person is entitled to accrued benefits only to the extent that he or she makes such contributions to the plan. 1 USERRA does not require a private employer to pay an employee while on military service. However, many companies have policies which allow for a brief period of paid military leave, or which allow for payment of the difference between military pay and normal company pay while the member is on military service. Employers should review these policies to ensure that they do not violate the discrimination provisions of USERRA by providing greater benefits to employees on other types of furlough or leaves of absence, as discussed below. Employers may also want to revisit any overly generous paid leave policies. 4

5 However, reemployed persons will have up to three times the period of service to make up for missed contributions, not to exceed five years. If accrued benefits are not based on employee contributions, the employer is required to make additional contributions to cover the benefits that would have accrued during the period of military service. Finally, USERRA also provides that in a multi-employer pension plan, the sponsor maintaining the plan may establish rules to allocate among the participating employers the liability of the plan for pension benefits accrued by persons who are absent for military service, or it can allocate all of the cost of a reemployed person to the last employer employing the person before the period of military service (if that employer is no longer functional, then the cost will be allocated to the plan). Within 30 days after a person is reemployed, an employer who participates in a multi-employer plan must provide written notice to the plan administrator of the person s reemployment. Vacation Benefits Employees are ent itled, on request, to use their paid vacation for military absences. Employers, however, cannot force employees to use their vacation or leave time for military duty. Under USERRA, an employee does not accrue additional vacation or medical/sick days from the employer while on military duty, unless the employer chooses to bestow this benefit or provides vacation and sick day accruals for other types of leaves. ACCOMMODATIONS FOR DISABILITIES OR INJURIES INCURRED IN MILITARY SERVICE USERRA also requires employers to make reasonable efforts to accommodate the disability or short-term injury of a returning employee if incurred during the military service. If the particular job cannot be performed by the injured employee, the employer must provide the nearest approximation to the previous job in view of the limits of the disability. However, an employer is not obligated under USERRA to reemploy a disabled veteran if such accommodation would impose an undue hardship on the employer. As noted above, recovery from an injury or disability will also extend for up to two years the time that the employee has to give notice after completion of service in order to obtain reemployment. PROTECTION AGAINST DISCHARGE WITHOUT CAUSE USERRA limits an employer s ability to terminate those employees who have been reemployed after a military service of more than 30 days. A person reemployed under USERRA may not be discharged except for cause within one year after the date of reemployment, if the active duty service was for more than 180 days. If the deployment was for more than 30 days but less than 180 days, the prohibition period on at-will termination is 180 days. BROAD PROTECTION AGAINST DISCRIMINATION AND RETALIATION In addition to providing the mobilized employee with specific reemployment benefits, USERRA broadly prohibits all forms of discrimination against employees on the basis of 5

6 military service. For example, an employer cannot terminate or discriminate against an employee who is frequently absent from work due to military training, even if the employee is not mobilized or shipped overseas. In addition, absent service members are entitled to receive the same benefits that would be given to persons who are on other types of furlough or leaves of absence. Similarly, an employer cannot retaliate against the military member--or any other employee--who takes any action to enforce or assist in enforcing rights under USERRA. An employer is deemed to have discriminated against a service member employee if the employee s service-related activity is a motivating factor in the employer s action, unless the employer can prove that it would have made the same decision in the absence of the employee s service connection. USERRA Enforcement USERRA is largely enforced by the U.S. Department of Labor s Veterans Employment and Training Service (VETS). An employee may file a grievance directly with VETS, which has the authority to investigate and resolve the complaint as it sees fit, including court action if necessary. Further information about the role of VETS in the USERRA process may be found at the following website: The law also allows an employee to enforce his or her rights by filing a court action directly, or request the assistance of a United States Attorney in prosecuting the claim, without filing a complaint with VETS. Employees may also eligible for free legal assistance through the military services, which can include representation by a civilian or military attorney of the Judge Advocate General s Corps. The judicial remedies available under USERRA include: Reinstatement; Back pay; Lost benefits; Correction of personnel files; Awards of lost promotional opportunities; Retroactive seniority; Pension adjustments; and Restoration of vacation time. In addition, if the employee hired a private attorney, the court can award attorneys fees and costs. If the court finds that the violation of the law was willful, the court may also double the amount of back pay or lost benefits awarded. On the other hand, employers should note that USERRA does not allow for the recovery of attorneys fees or costs from an employee claiming rights under the statute. The Department of Defense, through its National Committee for Employer Support of the Guard and Reserve (NCESGR), employs ombudsmen who are willing to mediate disputes between military employees and their civilian employers. To utilize this service, employers may visit the NCESGR website at or call NCESGR toll-free at

7 If you have any questions about the Continuation and Reinstatement of Benefits section of this Client Alert, please contact Mr. Jim Merna at (404) All other inquiries about USERRA may be directed to Mr. Mickey Ross at (404) , or to Mr. Kent Davis at (404)