The California Court of Appeal recently struck a release that purported to waive any causes of action under the Uniformed Services Employment and Reemployment Rights of 1994 (“USERRA”). See Perez v. Uline, Inc., ___ Cal.App.4th ___ (Dec. 6, 2007) (Case No. G036939).

In Perez, the employer, Uline, Inc., terminated an employee—who was also a captain in the United States Marine Corps Reserves—on the day he returned from a military duty assignment, stating that his services were no longer needed. Uline offered the employee, Brian Perez, six weeks’ salary in exchange for his release of all state and federal claims, including those arising under USERRA.

Perez signed the release and received the promised severance package. Nevertheless, he thereafter sued Uline for, among other claims, wrongful termination in violation of USERRA. Perez specifically claimed that Uline removed him “from a position which he had obviously earned solely because he was apt to be called to active duty and was, in fact, absent for one week due to a military obligation.” Perez also asserted claims for breach of oral employment contract, defamation and failure to pay overtime. To avoid the release, Perez argued at trial that his waiver claims under USERRA violated the Act because the Act “supersedes any State law…contract, agreement, …or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter….” The trial court rejected that argument, but the Court of Appeal reversed, holding that Perez could not release his USERRA-related claims. Reasoning that the statute “plainly states that a contract may not limit the protections of USERRA, which prohibits termination of employment based on membership in the military or performance of military services,” the appellate court concluded that Uline’s “assertion that the agreement waived the protections of USERRA cannot be sustained.”

The Perez decision may well reflect an emerging sensitivity to military personnel engaged in extended conflicts. For example, California recently enacted Assembly Bill 392, which amended the Military & Veterans Code to create a new leave of absence right for employees whose spouses are in the military. See Mil. & Vet. Code § 395.10. Under that new law, employees who meet certain conditions may receive up to 10 days of unpaid leave during their military spouses’ leave from deployment. And earlier this year, a federal jury in Oregon awarded judgment in favor of a former mid-level supervisor at a national retail chain, who claimed that he was demoted and then fired in violation of USERRA. The jury awarded the plaintiff, an Oregon National Guardsman, nearly $85,000 in compensatory damages and $900,000 in punitive damages. See Patton v. Target Corp., Case No. 03-CV-1722-BR (D. Ore.) (June 15, 2007 jury verdict).

Given these political and legal developments, employers—particularly those in California—should be aware of the following principles:

  • Do not discriminate against employees because of their military personnel status. USERRA prohibits discrimination, based on military service, in hiring, promotion, reemployment, and/or other benefits of employment.
  • Do not retaliate against employees for taking military leaves of absence. USERRA makes it unlawful for an employer to retaliate against military personnel for taking military leave, enforcing their rights, or participating in an investigation or other proceeding regarding alleged violations of USERRA.
  • Carefully evaluate duties to rehire or reemploy military servicepersons. Subject to certain requirements and exceptions, USERRA requires that employers reemploy military personnel returning from military leaves of duty. A person returning from a military leave is generally entitled to the position he or she would have attained but for the period of service.
  • Assess whether military servicepersons can only be terminated for “cause.” Under USERRA, the at-will employment status of reemployed veterans is temporarily altered. Depending on the length of the military leave of absence, a serviceperson may be discharged only for “cause” for a period of time following reinstatement.
  • Carefully word the language of releases. As detailed above, waivers of claims under USERRA are invalid under Perez, at least in California.

Given the foregoing, employers should obtain the guidance of outside counsel before taking action implicating or purporting to waive an employee’s USERRA rights.