I think I’m in movie mode; last week I was blogging Back to the Future, this week I’m channeling my inner Top Gun. In any event, on to the less exciting legal mumbo jumbo. With remote work and expanding businesses, many more employers have employees throughout the U.S., some of which may be military members as well. If you are one of those Minnesota businesses, you should be aware of a few court of appeals cases that have addressed an “issue of first impression” (meaning, the court has not opined on it before) this year regarding an employee’s rights, and an employer’s obligations, under the Uniformed Services Employment and Reemployment Act (USERRA). Specifically, the courts held that an employer’s paid time off policy (for example, 3 days for bereavement or 5 days for sick leave) created a right to comparable paid leave for short-term military duty. You read that right – because a policy provided time off for x, y, or z, that same time off must be provided for military leave. Similarly, if an employee on paid time off/vacation is allowed to continue to accrue profit sharing, an employee on military leave must also be allowed to accrue profit sharing.
On August 10, 2021, the 3rd Circuit Court of Appeals (covering PA, NJ, DE) joined the 7th Circuit Court of Appeals (covering WI, IL, IN), finding that an employer failed to properly compensate an employee while on short-term military leave. See White v. United Airlines, Inc., 987 F.3d 616 (7th Cir. 2021); Travers v. Federal Express Corp., __F.4th__ (3rd Cir. Aug. 10, 2021). Interesting to note, each of the lower district courts got it wrong – in other words, they found in favor of the employer and were overturned. There is also a case pending in the 9th Circuit Court of Appeals (AK, AZ, CA, HI, ID, MT, NV, OR, WA), Clarkson v. Alaska Airlines, Inc., regarding the same issue; it is anticipated that court will also find in the employee’s favor (overturning the district court) based on that court’s previous liberal leanings. Minnesota, as you may recall, is in the Eighth Circuit. However, with the 3rd, 7th, and likely 9th Circuits all agreeing (and the 3rd and 7th typically more conservative), I would expect the trend will be towards this interpretation of USERRA (in favor of requiring paid leave).
These cases center around USERRA’s requirement that employees on military leave be given the same “rights and benefits” as comparable, non-military leaves. Specifically, they address whether an employer is required to provide paid leave for a military absence if the employer provides other paid leaves (i.e., jury duty, bereavement leave, sick leave, vacation time, city-required sick and safe time, and paid time off), and similar benefits (i.e., earning credit under profit sharing plans). Collectively, they find that an employer’s paid leave policy(ies) (or other benefits) can be as generous as they want, however, they must be equal (comparable) for both military and non-military members. The DOL looks to three factors to consider whether leaves are comparable – (1) the duration; (2) the purpose; and (3) the ability to choose when to take it. The first factor being the most significant.
This means, if you have an unlimited PTO policy, presumably, a military member could take unlimited paid military leave. However, the employee must demonstrate the leaves are comparable in duration. For example, a 3-day jury duty paid leave is not comparable to a 20-day military leave; however, unlimited time off is unlimited time off. If you allow salary continuation for one group, you must allow salary continuation for the other (military) group. Basically, a military member cannot be at a disadvantage because of a military leave than an employee who took leave for another (non-military) reason. In short, you should be sure to treat one group the same as the other, and thus, provide the same paid time off for a USERRA qualifying event as you would for other leaves of absence.
I get that USERRA is triggered very infrequently for some employers, and more so for those that actively seek to hire reserve or guard members. However, if you’d like to read up on it, you can find USERRA guidance from the DOL here. Just something to keep in mind when you’re work on your paid leave plans in your handbook. Remember…no points for second place. You don’t want to find yourself on the wrong side of a wage and hour issue.
Last, but certainly not least, thank you to all who have served, continue to serve, and are family of service members. I recognize the timing of this blog is not ideal, but the 3rd circuit opinion just came outlast week, so I felt it was important for employers to understand the rights and obligations related to USERRA as this law is quickly evolving. I feel the need…the need for speed!