USERRA Sometimes Requires Paid Leave for Reservists, 7th Cir. Rules

The Uniformed Services Employment and Reemployment Rights Act (USERRA) requires employers to provide short-term paid leave to military reservists to the same extent they provide paid leave for other absences such as jury duty, according to the 7th U.S. Circuit Court of Appeals (White v. United Airlines, Inc. and United Continental Holdings, Inc., No. 19-2546 (7th Cir., Feb. 3, 2021)).

The appellate ruling stems from a United Airlines pilot who took short-term military leave for training sessions without pay. Under United’s collective bargaining agreement, pilots receive pay when they take short-term leave for other reasons such as jury duty or sick leave, according to court documents. United also maintains a profit-sharing plan, under which pilots are credited with a share of the company’s profit based on the wages they earn over the relevant period. These credits are based on wages, so pilots who take paid leave for illness or jury duty earn credit toward their profit-sharing plan, while pilots who take short-term military leave do not. The pilot who took military leave sued, arguing that “United’s failure to provide paid leave and profit-sharing-plan credit to reservists on military leave denies them ‘rights and benefits’ that are given for comparable, nonmilitary leaves.”

The district court dismissed the pilot’s complaint, but the 7th Circuit reversed and remanded the decision. The pilot argued that paid leave is included in USERRA’s definition of “rights and benefits.” “We agree with him,” the appeals court said. The court also noted that the profit-sharing claim accompanied the pilot’s paid leave claim, allowing that claim to move forward also.

USERRA forbids civilian employers from discriminating against employees because of their past or present military service, according to the U.S. Department of Labor.

Leading up to the 7th Circuit’s decision in White, several district courts had reached opposite conclusions on the issue of whether paid leave is a “right” or “benefit” under USERRA, attorneys at Akin Gump wrote.

In June 2019, a judge in the U.S. District Court for the Eastern District of Pennsylvania denied an employer’s motion to dismiss, the attorneys noted, “finding that an employer’s failure to pay reservists the difference between their civilian pay and their military pay stated a viable claims under USERRA if the airline provided paid leave to employees on comparable forms of non-military leave.” One year later, however, a different judge in the same district granted an employer’s motion to dismiss, rejecting the court’s reasoning in the earlier case when it ruled that Congress “unambiguously excludes paid military leave from the ‘rights and benefits’ employers must provide equally to reservists and non-reservists,” the attorneys wrote.

White may have a significant impact on employers with large reservist workforces, according to the Akin Gump attorneys: “The denial of paid leave is a prime candidate for class action treatment.”