Federal law protecting the job rights of employees going into military service can require employers, in addition to offering reinstatement, to accord employees on military leave the same benefits as employees on comparable long-term leaves, and these benefits may extend to facilitating the reemployment of the service member by a purchaser of the employer’s business in the same manner as other employees, the U.S. Court of Appeals in St. Louis has held. The Eighth Circuit also held that under the Uniformed Services and Reemployment Rights Act (USERRA), the employer has the burden in litigation to establish it has fulfilled this obligation. Dorris v. TXD Services, LP, No. 12-3096 (8th Cir. Feb. 27, 2014). 

Although former employee Jonathan Dorris alleged he was subjected to unlawful discrimination because of his military service, the appellate court decision focused on the failure of his former employer, TXD Services, to list him as an active employee when it sold substantially all of its assets to another company. The Court held the record failed to establish Dorris was treated the same as other employees on comparable military leaves. Accordingly, it reversed the grant of summary judgment and remanded the case to the District Court.

The Facts

Dorris was working on oil rigs when he received notice that his National Guard unit was being deployed to Iraq. He notified his supervisors and the human resources department of his upcoming deployment and that his final day would be September 11, 2007. He then reported to duty on October 1, 2007, and served in Iraq through the end of 2008. 

While Dorris was in Iraq, TXD sold substantially all of its assets to an unrelated company, Foxxe Energy. Foxxe took over the relevant operations after the sale. In the purchase agreement, Foxxe had agreed to make “reasonable efforts to offer employment” to a list of “active employees” provided by TXD. In fact, all of the employees on the list supplied by TXD were hired by Foxxe. Dorris, however, was not on the list and he was not hired by Foxxe when he returned in December 2008. In April 2009, Foxxe agreed to hire Dorris.

Dorris commenced a lawsuit against TXD alleging a violation of USERRA. TXD moved quickly for summary judgment. The company asserted it was not obligated to rehire Dorris. It argued that since it was no longer a going concern, it was not required to take Dorris back, citing USERRA’s exception to its general reinstatement requirement for “changed circumstances” (38 U.S.C. § 4312(d)(1)(A)). 

Dorris responded that he was asserting a claim for discrimination based on his military service (38 U.S.C. § 4311) and that “he was entitled to be on [the list of all personnel currently employed by TXD] so that when he returned, he would immediately receive reasonable consideration from Foxxe as a potential employee.” Notably, however, neither side offered evidence as to whether employees on other (non-military) forms of leave were included on the list of active employees given to Foxxe Energy.

The District Court granted summary judgment to TXD on Dorris’s claim that TXD violated its obligations to reemploy him under § 4311. (This ruling Dorris did not appeal.) It also held Dorris had not offered any evidence that he was treated differently than any other similarly situated service member or that others on leaves of absence were included on the list of active employees. It entered summary judgment in TXD’s favor.

Eighth Circuit Opinion  

The Eighth Circuit reversed. Citing the USERRA provision providing that an employee on military leave is “entitled to such other rights and benefits not determined by seniority as are generally provided by the employer of the person to employees having similar seniority, status, and pay who are on furlough or leave of absence under a contract, agreement, policy, practice, or plan in effect at the commencement of such service or established while such person performs such service” (§ 4316), the appeals court took a broader view of comparability than had the trial court.

Recognizing that neither party had presented evidence as to whether TXD also had excluded any employees on “long-term leave for reasons other than military service” from the list it provided to Foxxe and that the relevant evidence is far more accessible to the employer, the Eighth Circuit held that “placing on TXD the burden of establishing compliance with [USERRA] if Jonathan Dorris was denied a benefit not determined by seniority when he was left off the employee list provided to Foxxe” is warranted. In the absence of such evidence, it was inappropriate to grant summary judgment to employer. Consequently, the Eighth Circuit reversed the decision and remanded the case to the District Court.

Implications for Employers

USERRA’s protection of service members’ benefits is sometimes overlooked by employers, including employers that provide benefits beyond those required by statute. Employers should review the benefits available to employees on comparable leaves of absence to ensure those on military leave are receiving comparable benefits. Determining when a leave of absence is comparable can be problematic. For example, in Dorris, the Eighth Circuit suggested the proper comparison for the purpose of the plaintiff’s situation was employees on “long-term leave.” In other cases, however, comparison to other forms of leave might be required. For example, if an employer permits an employee to make up lost overtime because of a three-day bereavement leave, an employee who went on weekend military activity might be entitled to the same treatment. USERRA is a highly technical statute that imposes requirements that can trip the uninitiated. Employers should consider consulting with counsel experienced with USERRA questions.