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As the United States' various engagements in the Middle East wind down, military servicemembers are returning home in growing numbers. According to the Equal Employment Opportunity Commission, three million veterans have returned from military service over the past ten years, and another million are expected to return to civilian life over the next five years. Many of these returning servicemembers will be joining, or rejoining, the civilian workforce.

Uniformed Services Employment and Reemployment Rights Act (USERRA)

Most employers are now familiar with the Uniformed Services Employment and Reemployment Rights Act (USERRA), which prohibits employers from discriminating against job applicants or employees on the basis of their military status or military obligations and provides job restoration rights to servicemembers. Many employers, however, do not realize that USERRA also mandates that returning servicemembers be placed in positions they would have achieved had it not been for their absence due to military service.

Under USERRA's "escalator principle," employers are required to re-employ a returning service member to the following: (1) the status that he or she would have acquired by virtue of continued employment if it had not been for his or her absence during military service; and (2) the position that he or she would have attained with "reasonable certainty" if not for the absence. However, the "escalator principle" does not apply only to promotions. It "may cause an employee to be re-employed in a higher or lower position, laid off, or even terminated."

Federal courts have traditionally interpreted USERRA's "escalator principle" to mandate that returning servicemembers be placed in positions they would have achieved due to non-discretionary promotions. However, a recent court of appeals decision fundamentally alters this interpretation, holding that the "escalator principle" requires employers to also consider discretionary promotions when placing returning servicemembers into positions.

Facts of the Case

In Rivera-Melendez v. Pfizer Pharmaceuticals, LLC, Luis Rivera-Melendez, a U.S. Naval Reserve member who had been called to active duty in Iraq between December 2008 and October 2009 sued his employer, Pfizer, because he had not been considered for promotion to a team leadership position that had been created and filled while he was away on active duty. The promotion to a team leadership position was discretionary and there were only seven available positions, for which sixteen to seventeen people applied.

In addition, while Rivera-Melendez was on active duty, Pfizer eliminated his previous position. As a result, upon Rivera-Melendez's return Pfizer appointed him to a position that had fewer job responsibilities than his previous position. In turn, Rivera-Melendez sued Pfizer, alleging USERRA violations.

The district court granted summary judgment to Pfizer, holding that USERRA entitles servicemembers to positions they would have received due to automatic promotions. However, on appeal, the First Circuit Court of Appeals reversed, concluding that USERRA's "escalator principle" is not limited to automatic promotions.

Employer Takeaway

USERRA's protections provide broad entitlements and remedies to servicemembers returning to the workforce. Now, employers may need to take into account discretionary, non-mandatory promotions when determining in which position to re-employ the returning servicemember. In addition, Rivera-Melendez teaches employers three other important lessons: First, USERRA will be construed broadly in favor of military servicemembers. Second, the U.S. government will not hesitate to weigh in on behalf of a servicemember employee in an appropriate case (in Rivera-Melendez the government filed an amicus brief in support of the plaintiff). Third, avoiding a trial on disputed re-employment claims will likely be difficult in the years to come.

If you have any questions about this decision or USERRA's implications for your organization's hiring practices, please contact Aaron R. Gelb at +1 (312) 609 7844, Andrew Oppenheimer at +1 (312) 609 7664 or any other Vedder Price attorney with whom you have worked.

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