Attention All Employers! Illinois Revises its Military Leave Laws

This summer, Illinois passed the Illinois Service Member Employment and Reemployment Rights Act (ISERRA). This law is effective January 1, 2019. The new ISERRA explicitly incorporates the federal Uniform Services Employment and Reemployment Rights Act (USERRA) for its basic protections, case law, and regulations. This post hopefully will serve as a USERRA refresher as well as a summary of the new ISERRA obligations. More ›

Additional Reason for Failure to Promote is not Indicative of Pretext for Discrimination

A member of the Air Force was denied four promotions to Battalion Chief and Assistant Chief of Administration during a four-year period and sued his employer fire department alleging that these decisions violated the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). While there was sufficient evidence that the employee’s military service was a motivating factor in the promotion decisions, the employee’s claims were denied. As a rule, liability will not occur under USERRA if the employer would not have promoted a service member absent the individual’s membership in the military.To this point, the fire department’s decision-maker testified that the employee was trustworthy, made good decisions, exercised good judgment, and could work with others. The employee argued that this additional reason, first offered at litigation, was unbelievable. It was different than the reason offered at the time of the decisions, his skill level was lower than that of the employees selected for promotion. More ›

Layoff Found to be Valid Position of Reemployment Under USERRA

The Eighth Circuit Court of Appeals recently held that a layoff as a part of a workforce reduction is a valid "position of reemployment" for purposes of the Uniformed Services Employment and Reemployment Rights Act (USERRA).  More ›

U.S. Supreme Court Reinstates Army Reservist’s “Cat’s Paw” Bias Claim Under USERRA

A group of employees who participated in their employer’s 401(k) plan invested a portion of their account in their employer’s stock. They sued their employer under the Employee Retirement Income and Security Act (ERISA) when the price of their employer’s stock dropped. The employees alleged that their employer had failed to disclose sufficient information about a bad business transaction that the employer had entered into and to monitor the conduct of the plan fiduciaries. Initially, the U.S. Court of Appeals for the Seventh Circuit dismissed a claim of an employee bringing suit who had previously signed a severance agreement with the employer waiving all claims against the employer, including those under ERISA. The employee argued that he could still pursue his claim against under the plan because ERISA prohibited plan fiduciaries from being released from their fiduciary responsibilities. The court held that nothing in ERISA prohibits a fiduciary from obtaining a release for potential claims that had already accrued. It went on to find that the fiduciaries did not violate ERISA in initially selecting their own stock as an investment option under the plan because: (1) the fund was one of many among which the participants could choose; (2) the plan repeatedly warned against the risk of not diversifying their investment choices; and (3) the employer’s stock had never performed badly enough to make it an imprudent investment choice. Additionally, the court held the employer and plan fiduciaries were protected under the “safe harbor” provision of Section 404(c) of ERISA against the employee’s claims that the employer had failed to disclose information about certain business decisions and to monitor plan fiduciaries. The Section 404(c) safe harbor provision provides protection for plan fiduciaries in certain instances where participants direct the investment of their accounts in a 401(k) plan. The purpose of the Section 404(c) safe harbor provision is to relieve the fiduciary of responsibility for choices made by someone beyond its control. The court held that the plan fiduciaries had no duty to provide plan participants with real time updates on business decisions or to review all business decisions of the company. Based on the court’s findings in these cases, employers should ensure they are in compliance with Section 404(c) of ERISA, as it provides protection to 401(k) plan sponsors if their fiduciary decisions are questioned. However, they should be aware that Section 404(c) does not provide protection for the initial fund selection. Additionally, employers should ensure that all severance agreements are well-drafted.

Howell v. Motorola, Inc., Case No. 07-3837 (7th Cir. Jan. 21, 2011)
Lingis v. Dorazil, Case No. 09-2796 (7th Cir. Jan. 21, 2011)

No Constructive Discharge Under USERRA Where Working Conditions not Objectively Intolerable and Plaintiff Failed to Show Veteran Status Was a Motivating Factor

An employee who was a paramedic joined the Marines and served three tours of duty in Iraq before being discharged from active duty. The employer allowed the employee to return to work at the same position and rate of pay as before he joined the Marines. Subsequently, the employee and his supervisor got into a verbal confrontation not relating to military service and the employee believed the supervisor treated him “dismissively.” The employee claimed to fear that the supervisor would attack him or find some pretext to fire him, but never reported this fear to anyone. The employee later requested time off pursuant to the Family and Medical Leave Act (FMLA) for treatment of his self-reported post-traumatic stress disorder (PTSD), and his employer granted the request. During his time off, the employee also filed a claim for long-term disability benefits for PTSD, which was denied on the basis that the plan did not cover disabilities caused by acts of war. The employee never returned to work, formally resigning more than a year after requesting time off under the FMLA. The employee later sued his employer and supervisor, alleging workplace discrimination and constructive discharge on the basis of veteran status, in violation of the Uniformed Services Employment and Reemployment Act of 1994 (USERRA). The U.S. Court of Appeals for the Eighth Circuit affirmed the dismissal of the employee’s constructive discharge claims because the employee failed to present a prima facie case of constructive discharge. Under USERRA, constructive discharge occurs when an employer deliberately renders an employee’s working conditions intolerable with the intent of forcing the employee to leave the employment. The employee failed to show that the conditions were objectively intolerable or that his status as a veteran was a motivating factor in any constructive discharge. Further, he never gave the employer any opportunity to correct the claimed intolerable condition before he quit; thus, the claim failed as a matter of law. Employers should be mindful that USERRA prohibits discrimination against veterans with respect to any benefit of employment on the basis of their application for membership or their service in the uniformed services, and they should take immediate action to affirmatively address acts of discrimination in the workplace to prevent potential liability under USERRA.