Uniformed Services Employment and Reemployment Rights Act of
1994, As Amended
[12/19/2005]
Volume 70, Number 242, Page 75245-75313
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Part II
Department of Labor
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Veterans' Employment and Training Service
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20 CFR Part 1002
Uniformed Services Employment and Reemployment Rights Act of 1994;
Final Rules
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DEPARTMENT OF LABOR
Veterans' Employment and Training Service
20 CFR Part 1002
[Docket No. VETS-U-04]
RIN 1293-AA09
Uniformed Services Employment and Reemployment Rights Act of
1994, As Amended
AGENCY: Veterans' Employment and Training Service, Department of Labor.
ACTION: Final rules.
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SUMMARY: The Veterans' Employment and Training Service (``VETS'' or
``the Agency'') issued proposed rules implementing the Uniformed
Services Employment and Reemployment Rights Act of 1994, as amended
(USERRA). This document sets forth the Agency's review of and response
to comments on the proposal and any changes made in response to those
comments.
Congress enacted USERRA to protect the rights of persons who
voluntarily or involuntarily leave employment positions to undertake
military service. USERRA authorizes the Secretary of Labor (in
consultation with the Secretary of Defense) to prescribe rules
implementing the law as it applies to States, local governments, and
private employers. VETS proposed rules under that authority in order to
provide guidance to employers and employees concerning their rights and
obligations under USERRA. The Agency invited written comments on these
proposed rules, and any specific issues related to the proposal, from
members of the public.
DATES: Effective Date: This rule will be effective on January 18, 2006.
FOR FURTHER INFORMATION CONTACT: Robert Wilson, Chief, Investigations
and Compliance Division, Veterans' Employment and Training Service,
U.S. Department of Labor, 200 Constitution Avenue, NW., Room S-1312,
Washington, DC 20210, Wilson.Robert@dol.gov, (202) 693-4719 (this is
not a toll-free number).
For press inquiries, contact Michael Biddle, Office of Public
Affairs, U.S. Department of Labor, 200 Constitution Avenue, NW., Room
S-1032, Washington, DC 20210, Biddle.Michael@dol.gov, (202) 693-5051
(this is not a toll-free number).
SUPPLEMENTARY INFORMATION:
I. Background
On September 20, 2004, the Department of Labor (``the Department'')
issued proposed regulations to implement the Uniformed Services
Employment and Reemployment Rights Act of 1994, as amended (USERRA), 38
U.S.C. 4301-4334. The Department invited written comments on the
proposed regulations from interested parties. The Department also
invited public comment on specific issues. The written comment period
closed on November 19, 2004, and the Department has considered all
timely comments received in response to the proposed regulations.
The Department received 80 timely comments from a wide variety of
sources. Commenters included: a member of Congress; service members and
veterans; organizations representing human resource professionals and
employee benefits providers; law firms; individual employers and
employer associations; individual employees and employee
representatives; and members of the interested public. The comments
were composed of well over 300 individual queries or concerns addressed
to approximately 200 specific topics set out in the Department's notice
of proposed rulemaking. While a few of the comments were generalized
plaudits or individualized complaints, the great majority of comments
specifically addressed issues contained in the Department's proposed
rule. The Department recognizes and appreciates the value of comments,
ideas, and suggestions from members of the uniformed services,
employers, industry associations, labor organizations and other parties
who have an interest in uniformed service members' and veterans'
employment and reemployment rights and benefits.
Following the publication of the NPRM, the Department issued an
interim final rule, Notice of Rights and Duties Under the Uniformed
Services Employment and Reemployment Act, 70 FR 12106 (March 10, 2005),
to comply with an amendment made to USERRA by the Veterans Benefits
Improvement Act of 2004 (VBIA), Public Law 108-454 (Dec. 10, 2004). In
part, the VBIA imposed a new requirement that ``Each employer shall
provide to persons entitled to rights and benefits under [USERRA] a
notice of the rights, benefits, and obligations of such persons and
such employers under [USERRA].'' 38 U.S.C. 4334(a). The VBIA required
the Secretary of Labor to make available to employers the text of the
required notice, 38 U.S.C. 4334(b), and the Department's publication of
the interim final rule set forth such text as an appendix to these
USERRA regulations.
II. Statutory Authority
Section 4331 of USERRA authorizes the Secretary of Labor (in
consultation with the Secretary of Defense) to prescribe regulations
implementing the law as it applies to States, local governments, and
private employers. 38 U.S.C. 4331(a). The Department has consulted with
the Department of Defense, and issues these regulations under that
authority in order to provide guidance to employers and employees
concerning the rights and obligations of both under USERRA.
III. Prior Laws and Interpretation
USERRA was enacted in part to clarify prior laws relating to the
reemployment rights of service members, rights that were first
contained in the Selective Training and Service Act of 1940, 54 Stat.
885, 50 U.S.C. 301, et seq. USERRA's immediate predecessor was the
Vietnam Era Veterans' Readjustment Assistance Act of 1974, 38 U.S.C.
2021-2027 (later recodified at 38 U.S.C. 4301-4307 and commonly
referred to as the Veterans' Reemployment Rights Act ``VRRA''), which
was amended and recodified as USERRA.
In construing USERRA and these prior laws, courts have followed the
Supreme Court's admonition that:
This legislation is to be liberally construed for the benefit of
those who left private life to serve their country in its hour of
great need. * * * And no practice of employers or agreements between
employers and unions can cut down the service adjustment benefits
which Congress has secured the veteran under the Act.
See Fishgold v. Sullivan Drydock and Repair Corp., 328 U.S. 275, 285
(1946), cited in Alabama Power Co. v. Davis, 431 U.S. 581, 584-85
(1977); King v. St. Vincent's Hosp., 502 U.S. 215, 221 n.9 (1991). The
Department intends that this interpretive maxim apply with full force
and effect in construing USERRA and these regulations.
This preamble also selectively refers to many other cases decided
under USERRA and its predecessor statutes, to explain and illustrate
the rights and benefits established under the Act. The failure to cite
or refer to a particular court decision in this preamble is not
intended to indicate the Department's approval or disapproval of the
reasoning or holding of that case.
IV. Plain Language
The Department wrote the proposed rule in the more personal style
advocated by the Presidential Memorandum on Plain Language. ``Plain
language'' encourages the use of:
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Personal pronouns (we and you);
Sentences in the active voice; and,
A greater use of headings, lists, and questions.
The Department received three comments regarding its use of
``you,'' ``I,'' and ``my'' to refer to employees, whom the Department
viewed as the primary beneficiaries of USERRA rights and benefits.
These commenters appreciated the use of plain language and the use of
question and answer format, but expressed a preference for the use of
third person pronouns so that both employers and employees are included
as the audience of the rule. In response, the Department has revised
the pronoun usage in the final rule, and has employed third person
pronouns to refer to the rights and obligations of both employers and
employees.
In addition, one of these commenters recommended the Department use
a more formal style when addressing complex topics such as health and
pension plan rights and obligations. In response, the Department has
adopted the use of more technical guidance on these matters without
unduly sacrificing clarity.
V. Section-by-Section Summary of the Final Rule and Discussion of
Comments
This preamble sets out the Department's interpretation of USERRA,
section by section. The preamble generally follows the outline of the
rule, which in turn follows the outline of USERRA. Within each section
of the preamble, the Department has noted and responded to those
comments that are addressed to that particular section of the rule.
Before setting out the section-by-section analysis, however, the
Department will first acknowledge and respond to comments that did not
easily fit into this organizational scheme.
A. General Comments
The Department received a number of general comments from members
of the public expressing gratitude to the Department for the long-
awaited USERRA regulations. In particular, Rep. John Boehner, Chairman
of the U.S. House of Representatives Committee on Education and the
Workforce, commended the Department for ``undertaking this most
important endeavor.''
Conversely, the Department received a few comments from individuals
complaining about their specific USERRA claims. The Department also
received several comments offering assistance with grammar and
punctuation. In all cases--the plaudits, the complaints, and the offers
of assistance-- the Department acknowledges and appreciates the
thorough and thoughtful comments.
The Department also received several comments requesting that
particular text cross-reference other text or make reference to related
text elsewhere in the rule. As a general matter of style, the
Department views such cross-references as cumbersome and ultimately
detrimental to the clarity of the text and, with few exceptions, has
declined to make such revisions.
Finally, the Department received several comments asking about the
application of these regulations to the Federal Government when it is
acting as an employer. The Federal Office of Personnel Management has
issued a separate body of regulations that govern the USERRA rights of
Federal employees. See 5 CFR part 353.
B. Compliance With USERRA and Compliance With the Internal Revenue Code
The Department received a number of comments from individuals and
employers seeking guidance on compliance with USERRA in those cases in
which the commenters perceived a conflict between USERRA's mandates and
the mandates of the Internal Revenue Code (IRC). These comments arose
primarily with regard to the health and pension plan provisions of the
rule, and suggested that in some cases compliance with USERRA may cause
the plan to be out of compliance with the IRC. See Subparts D and E.
The Department can provide guidance only with regard to the
requirements of USERRA. However, the Internal Revenue Service (IRS) and
the Department of the Treasury have indicated that a health or pension
plan will be deemed not to be in conflict with the applicable IRC
requirements merely because of compliance with USERRA or its
regulations.
C. Comments Addressing the National Disaster Medical System
The Department received several comments from an attorney employed
by the Federal Emergency Management Agency (FEMA) regarding the rule's
treatment of the National Disaster Medical System (NDMS). The NDMS is a
section within the U.S. Department of Homeland Security, and supports
Federal agencies in the management and coordination of the Federal
medical response to major emergencies and Federally declared disasters.
The NDMS is composed primarily of teams of professional and para-
professional volunteers, who may be activated for training or in
response to public health emergencies. NDMS volunteers who are
activated are considered to be serving in the uniformed services for
the purposes of USERRA. 42 U.S.C. 300hh-11(e)(3).
The FEMA commenter suggests several instances in which the
Department should clarify the coverage of members of the NDMS under
USERRA. The Department agrees with a number of these suggestions, and
rejects others, as follows:
1. The commenter recommends that section 1002.2, which provides
background and historical information on USERRA, include the statutory
reference, 42 U.S.C. 300hh-11(e)(3), that provides USERRA coverage to
members of the NDMS. The Department declines this suggestion, because
this section of the rule is intended as a general discussion, and
contains no mention of any statutory provisions that have directly or
indirectly amended USERRA. However, the Department will take the
opportunity to highlight the NDMS coverage issues elsewhere in this
final rule.
2. The commenter recommends that the Department include a
description of the NDMS in section 1002.5, which contains a number of
definitions that are considered helpful in understanding USERRA. The
Department has adopted this proposal. See 1002.5(f).
3. The commenter recommends a style change in NPRM section
1002.5(k), which has been incorporated. See 1002.5(l).
4. The commenter suggests that the Department include in NPRM
section 1002.5 that NDMS appointees are considered members of the
uniformed services when Federally activated or attending authorized
training. The Department has revised section 1002.5(o) to reflect that,
pursuant to the statute creating the NDMS, service in the NDMS is
considered to be service in the uniformed services for the purposes of
USERRA, although the appointee is not considered to be a member of the
uniformed services. See 42 U.S.C. 300hh-11(e)(3).
5. The commenter suggests that the Department clarify in section
1002.6 that service in the NDMS is a type of service covered by USERRA.
The Department agrees. See 1002.6.
6. The commenter requests that the Department modify 1002.41 to
include a reference to the intermittent nature of the service of the
NDMS. The Department rejects this suggestion because the section in
question refers to the brief or intermittent nature of civilian
employment, not the service in the uniformed services.
7. The commenter suggests that the Department clarify that, with
regard to section 1002.56, not all NDMS service is
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protected by USERRA, and that the Department remove the phrase ``even
if you are not a member of the uniformed services'' from this section.
While the Department did not adopt these suggestions, the Department
reexamined the question set out in section 1002.56 and concluded it
needed revision to accurately reflect the scope of the coverage of NDMS
service.
8. The commenter properly suggests that the Department modify
section 1002.86 to indicate that the Secretary of Homeland Security
may, in consultation with the Secretary of Defense, make a
determination that giving of notice by intermittent disaster-response
appointees of the National Disaster Medical System is precluded by
``military necessity.'' The revision has been made. See 1002.86.
9. The commenter requests that the Department correct a reference
in section 1002.103(a)(5) and (a)(7), which addresses the types of
service that do not count toward the general five-year limit on service
after which a person is not entitled to reemployment rights. The
correction has been made to follow precisely the corresponding sections
of the statute. See 38 U.S.C. 4312(c)(4)(B) and 4312(c)(4)(D).
10. The commenter requests that the Department include within
section 1002.123 an additional type of document that establishes an
employee's eligibility for reemployment following covered NDMS service.
The Department agrees. See section 1002.123(a)(7).
11. The commenter suggests that the Department modify section
1002.35, which specifies the types of discharge following service that
will cause a person to lose reemployment rights under USERRA. The
commenter sought inclusion on this list the termination of an
intermittent NDMS appointee for misconduct or cause. Because no
statutory or regulatory guidance was provided as a basis for this
suggestion, and the Department is aware of none, the suggestion is not
adopted.
Subpart A--Introduction to the Regulations Under the Uniformed Services
Employment and Reemployment Rights Act of 1994
General Provisions
Sections 1002.1 through 1002.7 describe the regulation's purpose,
scope, and background, as well as the sense of the Congress in enacting
USERRA. Section 1002.1 sets out the purpose of these regulations. See
38 U.S.C. 4301. Sections 1002.2 through 1002.4 provide additional
background on USERRA, its effective date, and its purposes. Section
1002.5 defines the important terms used in the regulation. See 38
U.S.C. 4303. Sections 1002.6 and 1002.7 describe the general coverage
of the rule, its applicability and its relationship to other laws,
contracts, agreements, and workplace policies and practices. See 38
U.S.C. 4302.
The Department received one comment from the Equal Employment
Advisory Council regarding the breadth of USERRA's definition of
``employer.'' The proposed rule adopted, in Section 1002.5(d), USERRA's
definition of ``employer,'' which includes ``any person, institution,
organization or other entity that pays salary of wages for work
performed or that has control over employment opportunities, including
* * * a person, institution, organization, or entity to whom the
employer has delegated the performance of employment-related
responsibilities.'' 38 U.S.C. 4303(4). The EEAC proposed that the
regulatory definition of employer explicitly exclude from liability for
statutory violations individuals, such as managers or supervisors, who
are not directly responsible for paying wages to employees. In support
of this proposal, the EEAC cited case law under various civil rights
statutes holding that individuals cannot be held personally liable for
statutory violations if the individual does not independently meet the
statute's definition of a covered ``employer.'' See, e.g., EEOC v. AIC
Security Investigations, LTD, 55 F.3d 1276, 1281 (7th Cir. 1995), and
cases cited therein. Under the statutory definitions of ``employer'' in
the Americans with Disabilities Act (ADA), 42 U.S.C 12111(5), the Age
Discrimination in Employment Act (ADEA), 29 U.S.C. 630(b), and Title
VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e(b), which are
essentially the same, the weight of authority is that Congress intended
the doctrine of respondeat superior to apply, and to impose liability
upon employers for acts of their agents. Id.
The Department has considered this comment and disagrees with the
conclusion reached by the commenter. In comparison to the ADA, the
ADEA, and Title VII of the Civil Rights Act, USERRA's definition of
``employer'' is quite different and much broader. USERRA imposes
liability for violations upon ``any person * * * [who] * * * has
control over employment opportunities'' including ``a person * * * to
whom the employer has delegated the performance of employment-related
responsibilities.'' 38 U.S.C. 4303(4)(A)(i). At least two courts have
held that, based on this definition, individual supervisors may be
liable under the Act. See Brandasse v. City of Suffolk, 72 F.Supp.2d
608, 617-18 (E.D.Va. 1999) (both a city, as a police officer's direct
employer, and its director of personnel, who had authority over hiring
and firing for the city, were subject to liability as ``employers''
under USERRA); Jones v. Wolf Camera, Inc., 1997 WL 22678 (N.D.Tex.
1997) (at Fed.R.Civ.P. 12(b)(6) stage, individual supervisors may be
liable under USERRA as ``persons'' with control over hiring and firing
and to whom the employer has delegated the performance of employment-
related responsibilities). But see Satterfield v. Borough of Schuykill
Haven, 12 F.Supp.2d 423 (E.D.Pa. 1998) (plaintiff could not bring an
action under USERRA against individual members of a borough council,
alleging that the council terminated him because of his military
status, because such members did not have any individual power over the
plaintiff and the plaintiff was not required to report to them
individually); Brooks v. Fiore, 2001 WL 1218448 (D. Del. 2001)
(supervisor was not covered by USERRA because he did not have the power
to hire and fire the plaintiff).
Thus, courts have construed USERRA's definition of ``employer'' as
including supervisors and managers in appropriate cases. Those courts
that have found no individual liability have done so not because the
language of the statute precludes it, but rather because the facts and
circumstances of the case do not warrant the imposition of individual
liability. Based on these considerations, the Department declines to
adopt the position that individual supervisors and managers should be
excluded from the regulatory definition of ``employer'' under USERRA.
The Department received two additional comments, one from an
association of third-party employee benefit administrators and one from
a trade association of firms providing health insurance products to
employers, regarding the statute's broad definition of ``employer'' and
its implications in the employee benefits area. Each commenter was
concerned that USERRA's definition of ``employer'' was so broad as to
impute liability to third parties to whom employers had delegated only
ministerial responsibilities for employee benefits plans.
Congress intended that the definition of employer be broad enough
to ``apply to insurance companies that administer employers' life,
long-term disability, or health plans, so that such entities cannot
refuse to modify their policies in order for employers to comply with
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requirements under [USERRA].'' S. Rep. No. 158, 103d Cong., 2d Sess. 42
(1993). However, the Department agrees with the commenters that
entities to whom employers or plan sponsors have delegated purely
ministerial functions regarding the administration of employee benefits
plans are not intended to be covered by USERRA's definition of
``employer.'' For instance, firms whose activities are strictly limited
to the preparation and maintenance of plan benefit forms, without
engaging in substantive decisions regarding plan benefits, would not be
considered employers for the purposes of USERRA.
The Department received comments on the rule's definitions
regarding an employer's obligation to make reasonable efforts, without
imposing an undue hardship on the employer, to qualify an employee
returning from military service for reemployment. One commenter
suggested that the definition of ``reasonable efforts'' in section
1002.5(i) should explicitly include an employer's obligation to provide
evaluative testing, assistance with obtaining licensing, and other
similar employer efforts. The Department views the definition of
``reasonable efforts,'' which requires actions by employers ``including
training * * * that do not place undue hardship on the employer,'' as
sufficiently broad so as to include other actions not specified in the
definition. The same commenter requested that the Department delete
from the definition of ``undue hardship'' in section 1002.5(n) any
consideration based on ``the nature and cost of the action needed.''
The ``nature and the cost of the action'' is one of the factors
expressly included in USERRA's definition of ``undue hardship,'' and
the Department views consideration of all factors essential to
evaluation of what constitutes ``undue hardship.'' 38 U.S.C.
4303(15)(A)-(D).
Additionally, another commenter requested that the Department
exclude ``former employees'' from the definition of ``employee'' in
section 1002.5(c). Congress intended ``that the term `employee' would
include former employees of an employer.'' H.R. Rep. No. 65, 103d
Cong., 2d Sess. 21 (1993); S. Rep. No. 103-158, at 41 (1993).
Therefore, the Department will retain ``former employees'' within this
definition.
One comment suggests a revision to section 1002.6, which describes
the various types of service that are covered under USERRA. USERRA's
predecessor, the VRRA, provided reemployment protections that varied
(in many instances) based on the type of service performed. One of the
ways in which USERRA modified the old law was to base many of the
reemployment rights on the length of the service performed rather than
its type. The commenter requests the deletion of the sentence from
section 1002.6 that erroneously indicates that the statute's
reemployment provisions vary only according to the length of service.
The Department agrees, and has made the deletion. See 1002.6.
Finally, the Department received one comment regarding USERRA's
relationship to the Internal Revenue Code. The commenter has requested
the Department clarify how ``differential pay'' should be reported for
tax purposes. The term ``differential pay'' refers to payments by
employers to their employees absent to perform military service, and
this pay is neither required by nor addressed in USERRA. In some cases,
employers provide employees their full civilian pay, but more often
they provide payments that represent the difference between the
employee's military pay and civilian pay. Differential pay is a
generous show of support by employers for their employees who are in
service to the nation.
The commenter correctly points out that USERRA requires that a
person absent from a position of employment on account of service in
the uniformed services is to be considered on a furlough or leave of
absence, a provision that has been incorporated in the reemployment
rights statute since its first enactment in 1940. 38 U.S.C.
4316(b)(1)(A). On the other hand, the commenter notes that the Internal
Revenue Service (IRS) has issued guidance that such person is
considered to be ``terminated'' for certain tax purposes.
The Department reiterates that for the purposes of determining the
rights and obligations set out in USERRA, an employee absent to perform
service in the uniformed services is to be considered as on furlough or
leave of absence. 38 U.S.C. 4316(b). Therefore, for the purposes of
compliance with USERRA, an employee should be treated as on furlough or
leave of absence, and for the purposes of compliance with the Internal
Revenue Code (IRC), the IRS guidance should be followed. See IRS
Revenue Ruling 69-136 (1969).
Subpart B--Anti-Discrimination and Anti-Retaliation
Protection From Employer Discrimination and Retaliation
USERRA prohibits an employer from engaging in acts of
discrimination against past and present members of the uniformed
services, as well as applicants to the uniformed services. 38 U.S.C.
4311(a). The anti-discrimination prohibition applies to both employers
and potential employers. No employer may deny a person initial
employment, reemployment, retention in employment, promotion, or any
benefit of employment based on the person's membership, application for
membership, performance of service, application to perform service, or
obligation for service in the uniformed services. USERRA also protects
any person who participates in an action to protect past, present or
future members of the uniformed services in the exercise of their
rights under the Act. The Act prohibits any employer from
discriminating or taking reprisals against any person who acts to
enforce rights under the Act; testifies in any proceeding or assists a
statutory investigation; or exercises any right under the statute
pertaining to any person. 38 U.S.C. 4311(b). A person is protected
against discrimination and reprisal regardless whether he or she has
served in the military.
Proposed sections 1002.18, 1002.19 and 1002.20 implement the
protections of section 4311(a) and (b). Proposed section 1002.21 makes
clear that the prohibition on discrimination applies to any employment
position, regardless of its duration, including a position of
employment that is for a brief, non-recurrent period, and for which
there is no reasonable expectation that the employment position will
continue indefinitely or for a significant period.
The Department received two comments on proposed section 1002.21.
The first commenter suggests that the application of USERRA's anti-
discrimination and anti-retaliation provisions to brief, non-recurrent
positions is ``unduly burdensome for employers and contains unnecessary
verbiage.'' Because the statute explicitly requires the application of
the anti-discrimination and anti-retaliation provisions to such
employment positions, see 38 U.S.C. 4311(d), the Department will retain
the provision unchanged. A second commenter requests that 1002.21
include a cross-reference to section 1002.41 to reflect that persons
employed in brief, non-recurrent employment positions enjoy the
protections of USERRA's anti-
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discrimination and anti-retaliation provisions, while persons employed
in temporary and seasonal employment positions are not protected by
USERRA's reemployment provisions. The commenter mistakenly equates the
terms ``brief, non-recurrent'' with ``temporary'' and ``seasonal'' when
referring to employment positions. Some employment positions, such as a
life guard at a swimming pool or a football coach, are temporary,
seasonal positions, and such positions enjoy both the anti-
discrimination/anti-retaliation and the reemployment protections
afforded under USERRA. See 38 U.S.C. 4311(d) and 4312(d)(1)(C); S. Rep.
No. 103-158, at 46 (1993). By contrast, some, but not all, temporary,
seasonal employment positions are brief and non-recurrent, and provide
the employee no reasonable expectation of continued employment, such as
an employment contract that covers a one-time-only, three-month-long
position. Such brief, non-recurrent positions enjoy the protections
afforded by USERRA's anti-discrimination/anti-retaliation provisions,
but are not protected by the statute's reemployment provisions. See 38
U.S.C. 4312(d)(1)(C); S. Rep. No. 103-158, at 46 (1993).
Proposed section 1002.22 explains who has the burden of proving
that a certain action violates the statute. Proposed section 1002.23
sets out the evidentiary elements of a claimant's and an employer's
case under USERRA. The Department received several comments regarding
these two provisions. Two commenters, including the National Employment
Lawyers Association (NELA), criticized the provisions for failing to
state explicitly in the text of the rule that once an employee has met
his or her burden to prove that the employee's USERRA-protected status
or activity was a reason for an employer's adverse action against the
employee, that the employer's rebuttal case is an affirmative defense,
which places the burden of proof on the employer to show by a
preponderance of evidence that it would have taken the adverse action
in the absence of the protected status or activity. In addition, two
commenters, including NELA, criticized the provisions for erroneously
stating that the burden of proof shifts back to the employee if the
employer successfully prevails on its affirmative defense.
The Department agrees that the structures of proof set forth in
proposed sections 1002.22 and 1002.23 are susceptible to confusion and
should be clarified. Congress intended that the evidentiary scheme set
forth by the United States Supreme Court in NLRB v. Transportation
Management Corp., 462 U.S. 393, 401 (1983), apply to the analysis of
violations under USERRA. See S. Rep. No. 103-158, at 45 (1993), and
H.R. Rep. No. 103-65, Pt. I, at 18, 24 (1993). See also Gummo v.
Village of Depew, NY, 75 F.3d 98, 106 (2d Cir. 1996) (citing USERRA's
legislative history); Sheehan v. Dept. of the Navy, 240 F.3d 1009,
1013-1014 (Fed. Cir. 2001) (same).
Under this structure, in order to establish a case of employer
discrimination, the person's membership, application for membership,
performance of service, application for service, or obligation for
service in the uniformed services must be a ``motivating factor'' in
the employer's actions or conduct. 38 U.S.C. 4311(c)(1). The initial
burden of proving discrimination or retaliation rests with the person
alleging discrimination (the claimant). A person alleging
discrimination under USERRA must first establish that his or her
protected activities or status as a past, present or future service
member was a motivating factor in the adverse employment action. See
Robinson v. Morris Moore Chevrolet-Buick, Inc., 974 F.Supp. 571 (E.D.
Tex. 1997). The claimant alleging discrimination must prove the
elements of a violation--i.e., membership in a protected class (such as
past, present or future affiliation with the uniformed services); an
adverse employment action by the employer or prospective employer; and
a causal relationship between the claimant's protected status and the
adverse employment action (the ``motivating factor''). To meet this
burden, a claimant need not show that his or her protected activities
or status was the sole cause of the employment action; the person's
activities or status need be only one of the factors that ``a truthful
employer would list if asked for the reasons for its decision.'' Kelley
v. Maine Eye Care Associates, P.A, 37 F. Supp.2d 47, 54 (D. Me. 1999);
see Robinson, 974 F. Supp. at 575 (citing Price Waterhouse v. Hopkins,
490 U.S. 228, 250 (1989) (addressing Title VII gender discrimination
claim and related defense)). ``Military status is a motivating factor
if the defendant relied on, took into account, considered, or
conditioned its decision on that consideration.'' Fink v. City of New
York, 129 F.Supp.2d 511, 520 (E.D.N.Y. 2001), citing Robinson, 974
F.Supp. at 576. The employee is not required to provide direct proof of
employer animus at this stage of the proceeding; intent to discriminate
or retaliate may be established through circumstantial evidence. See
Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003); United States Postal
Service Bd. of Governors v. Aikens, 460 U.S. 711, 714 (1983); Sheehan,
240 F.3d at 1014.
After the employee establishes the elements of an alleged
violation, the employer may avoid liability by proving by a
preponderance of the evidence that the claimant's military activities
or status was not a motivating factor in the adverse employment action.
See Gummo, 75 F.3d at 106. At this stage, the employer carries the
burden to prove as an affirmative defense that it would have taken the
action anyway, without regard to the employee's protected status or
activity. Sheehan, 240 F.3d at 1014. Because the employer's defenses
are affirmative under USERRA, if the employer fails to counter the
employee's evidence, the claimant's proof establishes that the adverse
employment action was more likely than not motivated by unlawful
reasons. This framework is set forth in sections 1002.22 and 1002.23,
which have been revised in response to the comments noted above and to
accurately reflect the nature of the evidentiary structure intended by
Congress.
Section 4311(c)(2) provides the same evidentiary framework for
adjudicating allegations of reprisal against any person (including
individuals unaffiliated with the military) for engaging in activities
to enforce a protected right; providing testimony or statements in a
USERRA proceeding; assisting or participating in a USERRA
investigation; or exercising a right provided by the statute. 38 U.S.C.
4311(c)(2). Section 1002.19 addresses the elements of a case of
retaliation. One commenter highlighted an ambiguity in the question
posed in section 1002.19, and the Department has narrowed the question
to clarify that the section applies only to employer retaliation.
The Department received responses to its request for comment on the
application of the anti-discrimination provisions of the Act to
potential employers. Because this issue is also addressed in section
1002.40, which explains in some detail the obligations of potential
employers, the Department will respond to those comments in its summary
of Subpart C, below.
The Department received one comment requesting clarification in the
text of the final rule that USERRA protects not just a service member's
activities, but also protects a service member's status in the
uniformed services. For example, an employer may not discriminate
against a person because of his or her status as a military veteran or
member of a uniformed
[[Page 75251]]
service, regardless of whether that status results in the performance
of military activities. The Department agrees with the comment, and has
revised sections 1002.18, 1002.22 and 1002.23 to reflect that USERRA
protects both military status and activities.
The Department received numerous additional comments regarding this
part of the rule. One comment criticized the rule for failing to state
that the evidentiary scheme set forth in sections 1002.22 and 1002.23
applies only to court proceedings and does not apply to the earlier
administrative stage during which VETS investigates an employee's
USERRA claim. While the evidentiary structure in the rule certainly
pertains to the litigation of USERRA claims in court, the Department
regards the analysis as one that should be taken into account during
the investigative stage, so that adequate assessments can be made
regarding the claims of any party to a USERRA dispute. An additional
comment criticized the proposed rule for failing to explicitly state
that an employee need only show that his or her protected status or
activity was one of the factors motivating the adverse employment
action. Section 1002.22 states that the employee's burden is to prove
that the protected activity or status was ``one of the factors for the
employer's adverse action,'' and therefore no revision is necessary.
Another commenter faulted the proposed rule for failing to state that
the employee's initial burden of proof includes showing by a
preponderance of evidence that the protected activity or status was a
``substantial and motivating'' factor. The Department has concluded
that under Transportation Management, an employee must show that the
protected status or activity was a ``substantial or motivating''
factor. 462 U.S. at 401. One commenter suggested the addition of the
phrase ``or more'' to the first sentence of Section 1002.23(b) so that
it states, ``If you prove that the employer's action against you was
based on one or more of the prohibited motives listed in paragraph (a)
of this Section * * *.'' The Department regards this suggestion as
unnecessary to clarify the meaning of the provision. Finally, the
Department received one comment suggesting that in a reinstatement case
in which the employer has failed to reemploy a service member in a
position of like pay, status and seniority, the burden of proof should
be on the employer to show that its failure was not a result of
protected activity or service, and that the burden should be on the
employee only after reinstatement. Because the comment is ambiguous and
does not offer clarification of any provision of the regulation, no
revision has been made to respond to the comment.
Subpart C--Eligibility for Reemployment
General Eligibility Requirements for Reemployment
USERRA requires that the service member meet five general criteria
in order to establish eligibility for reemployment:
(1) That the service member be absent from a position of civilian
employment by reason of service in the uniformed services;
(2) That the service member's employer be given advance notice of
the service;
(3) That the service member have five years or less of cumulative
service in the uniformed services with respect to a position of
employment with a particular employer;
(4) That the service member return to work or apply for
reemployment in a timely manner after conclusion of service; and
(5) That the service member not have been separated from service
with a disqualifying discharge or under other than honorable
conditions.
Section 1002.32 sets out these general eligibility requirements.
Sections 1002.34-.74 explain the ``absent from a position of civilian
service'' requirement, sections 1002.85-.88 explain the ``advance
notice'' requirement, sections 1002.99-.104 explain the ``five years or
less of cumulative service'' requirement, sections 1002.115-.123
explain the ``return to work or apply for reemployment'' requirement,
and sections 1002.134-.138 explain the ``no disqualifying discharge''
requirement.
A person who meets these eligibility criteria, which are contained
in 38 U.S.C. 4312(a)-(c) and 4304, is entitled to be reemployed in the
position described in 38 U.S.C. 4313, unless the employer can establish
one of the three affirmative defenses contained in 38 U.S.C. 4312(d).
The Department received two comments on the general eligibility
criteria set out in proposed section 1002.32. The first commenter
recommended that the phrase ``in the uniformed services'' be inserted
after the word ``service'' in section 1002.32(a)(2) so that the
sentence more accurately states, ``You have five years or less of
cumulative service in the uniformed services with respect to your
position of employment.'' The Department agrees that this amendment
improves the clarity of the text, and has made the revision. See
1002.32(a)(2). The second commenter also requested a clarification to
the same sentence. In order to reflect that the five-year service limit
applies to an employee's entire employment relationship with a
particular employer, including any changes in employment position with
that particular employer, the Department has revised this sentence
accordingly. See 1002.32(a)(2).
There has been some disagreement in the courts over the appropriate
burden of proof in cases brought under 38 U.S.C. 4312, the provision in
USERRA establishing the reemployment rights of persons who serve in the
uniformed services. One court has interpreted that provision to be ``a
subsection of section 4311 [the anti-discrimination and anti-
retaliation provision].'' Curby v. Archon, 216 F.3d 549, 556 (6th Cir.
2000). Other courts have interpreted section 4312 to establish a
statutory protection distinct from section 4311, creating an
entitlement to re-employment for qualifying service members rather than
a protection against discrimination. Wrigglesworth v. Brumbaugh, 121 F.
Supp.2d 1126, 1134 (W.D. Mich. 2000) (stating that requirements of
section 4311 do not apply to section 4312). Brumbaugh relies in part on
legislative history and the Department's interpretation of USERRA. Id.
at 1137. Another district court supports the Brumbaugh decision and
characterizes the contrary view in Curby as dicta. Jordan v. Air
Products and Chem., 225 F. Supp.2d 1206, 1209 (C.D. Ca. 2002).
In the proposed rule, the Department agreed with the district court
decisions in Brumbaugh and Jordan that sections 4311 and 4312 of USERRA
are separate and distinct. Accordingly, proposed section 1002.33
provided that a person seeking relief under section 4312 need not meet
the additional burden of proof requirements for discrimination cases
brought under section 4311. The Department disagreed with the decision
in Curby v. Archon discussed above, insofar as it interprets USERRA to
the contrary, and the Department invited comment regarding the proper
interpretation of the statute regarding the burden of proof for relief
under section 4312.
The Department received four comments regarding this issue, and all
four agreed with the Department's interpretation that a person alleging
a violation of section 4312 of USERRA need not prove the elements of an
alleged violation of section 4311. In the absence of any negative
comment to consider, the Department will incorporate this provision of
the
[[Page 75252]]
proposed rule in the final rule. In addition, one of the four
commenters on this topic requested that section 1002.33 contain much
more detail about VETS' administrative procedures that follow the
filing of a complaint stating a claim under section 4312. The
Department declines this request, as it suggests the insertion of
material that is covered below in Subpart F of this rule, Compliance
Assistance, Enforcement and Remedies.
Coverage of Employers and Positions
Sections 1002.34 through 1002.44 of the final rule list the
employers and employment positions that are covered by USERRA. Section
1002.34 provides that the Act's coverage extends to virtually all
employers in the United States; the statute contains no threshold or
minimum size to limit its reach. The Department received two comments
regarding this coverage provision. First, the Department was asked
whether USERRA applies to Native American tribes when they act as
employers. Section 1002.34(a) reiterates USERRA's broad applicability
to all employers, explicitly including the Federal government and the
States. 38 U.S.C. 4303(4). While the face of the statute does not
explicitly cover Native American tribal employers, USERRA's legislative
history reflects the Act was intended to apply to ``Native American
tribes and their business enterprises.'' S. Rep. No. 103-158, at 42
(1993). Thus, although the Department concludes that USERRA likely
applies to Native American tribal employers, the Department recognizes
that there is a difference between the right to demand compliance with
the law and the means to enforce it. Kiowa Tribe of Oklahoma v.
Manufacturing Techs., Inc., 523 U.S. 751, 754 (1998). Native American
tribes, like the States, possess sovereign immunity from suit except
where ``Congress has authorized the suit or the tribe has waived its
immunity.'' Kiowa Tribe of Oklahoma, 523 U.S. at 754. As a result,
judicial enforcement of the Act against an Indian tribe depends on
whether the tribe has waived its immunity, and such a waiver ``cannot
be implied but must be unequivocally expressed.'' Santa Clara Pueblo v.
Martinez, 436 U.S. 49, 58 (1978). Accordingly, the Department
recognizes that the application of USERRA's provisions to Native
American tribal employers is a complicated and heavily fact-dependent
issue that, if raised in a USERRA proceeding, will ultimately be
resolved by the courts on a case-by-case basis. See, e.g., C & L
Enterprises, Inc. v. Citizen Band Potawatomi Tribe of Oklahoma, 532
U.S. 411 (2001) (arbitration provisions in contract amounted to clear
waiver of tribal immunity).
An additional commenter suggests the elimination of section
1002.34(c), which states that USERRA applies to American firms
operating in a foreign country, because it ``attempts to create an
extraterritorial application that is not established under the
statute.'' To the contrary, the text set out in section 1002.34(c) is
based on an unambiguous statutory provision establishing such
applicability. See 38 U.S.C. 4319. Accordingly, the Department has
retained this provision in the final rule. See 1002.34.
Other provisions in this section address various aspects of the
employment relationship subject to the Act. Section 1002.35 defines the
term ``successor in interest,'' and section 1002.36 further addresses
the issue. Section 1002.37 addresses the situation in which more than
one employer may be responsible for one employee. The Department
received two comments on this provision regarding multiple employers.
The first commenter suggested that, as with regulations promulgated
under the Family and Medical Leave Act, see, e.g. 29 CFR 825.106, the
provision should allocate statutory responsibilities and liability
between ``primary'' and ``secondary'' employers. Similarly, an
additional commenter submitted that the statute's reemployment
provisions should apply only to the ``primary'' employer and not the
``secondary'' employer.
In response to these two comments, the Department again notes
USERRA's broad definition of ``employer'' as an entity ``that has
control over employment opportunities.'' 38 U.S.C. 4303(4). In
addition, USERRA's legislative history instructs that the term
``employer'' is intended to be broadly construed to cover situations
where more than one entity exercises control over different aspects of
the employment relationship. S. Rep. No. 103-158, at 41 (1993); H.R.
Rep. 103-65, Pt. I, at 21(1993), citing, e.g., Magnuson v. Peak
Technical Services, Inc., 808 F.Supp. 500, 507-511 (E.D. Va. 1992) (the
legal issue is whether one or more of the entities exercise requisite
control over significant aspects of employment relationship so as to be
deemed an ``employer'' under the statute). Thus, in cases in which more
than one entity employs an individual, the entity's status,
responsibility and liability as an employer under USERRA is assessed by
determining whether the entity controls the employee's employment
opportunities, not by reference to shorthand labels such as ``primary
employer'' and ``secondary employer.'' Indeed, under this analytical
framework, employers may share or co-determine certain aspects of the
employment relationship, and in those cases there will not be a
``primary'' and ``secondary'' employer. Accordingly, the Department
will retain the provision unmodified. See 1002.37.
The Department received a comment from the Building and
Construction Trades Department of the AFL-CIO (``BCTD'') regarding the
Department of Labor's treatment of hiring halls in proposed section
1002.38, which provides that a hiring hall is an ``employer'' if ``the
hiring and job assignment functions have been delegated by an employer
to the hiring hall.'' The BCTD recommends that this provision be
eliminated, arguing that hiring halls in the unionized construction
industry represent an ``arrangement'' between the union and local
employers to facilitate referral of available union members for work.
According to the BCTD, hiring halls do not perform any hiring or
assignment functions beyond referring the number and types of workers
requested by the employer. The BCTD suggests that the multi-employer
group using the hiring hall to obtain workers should be the
``employer'' rather than the hiring hall. In order to effectuate this
suggestion, the BCTD proposes, in addition to eliminating section
1002.38, that the Department modify the regulatory definition of
``employer'' (section 1002.5(d)) to state, ``In industries in which
exclusive hiring halls are utilized, all employers who are required to
obtain applicants through a given hiring hall arrangement, may
constitute a single employer under the Act.''
The Department's response to the BCTD's proposal lies again in the
breadth of the statutory definition of ``employer,'' and in Congress's
unambiguous intent that this definition be read broadly to include
entities, such as hiring halls, to whom job referral responsibilities
have been delegated. See S. Rep. No. 103-158, at 42 (1993); H.R. Rep.
103-65, Pt. I, at 21(1993). In addition, the BCTD's proposed amendment
to the definition of employer in section 1002.5, which seeks the
permanent application of a ``single employer'' framework to multiple
hiring hall employers, is misplaced. The term ``single employer''
applies to firms that operate as an integrated enterprise and ``exert [
] significant control over'' the employees in question. G. Heileman
Brewing Co. v. NLRB, 879 F.2d 1526, 1530 (7th Cir. 1989). To determine
whether firms are sufficiently integrated to constitute a single
employer, courts
[[Page 75253]]
look to (1) common management; (2) centralized control of labor
relations; (3) interrelation of operations; and (4) common ownership or
financial control. See Radio and Television Broadcast Technicians Local
Union 1264 v. Broadcast Service of Mobile, Inc., 380 U.S. 255, 256, 85
S. Ct. 876, 13 L. Ed. 2d 789 (1965); see also Naperville Ready Mix,
Inc. v. NLRB, 242 F.3d 744, 752 (7th Cir. 2001), cert. denied, 534 U.S.
1040 (2001). While one or more employers utilizing the same hiring hall
may or may not operate as an integrated enterprise so that they meet
the criteria of the ``single employer'' test, such criteria are not
essential to determine whether the entity is an employer for the
purposes of USERRA. Accordingly, the Department rejects the BCTD's
suggestions, and will retain the provision regarding hiring halls in
unchanged form. See 1002.38.
Proposed section 1002.39 covers States and other political
subdivisions of the United States as employers, and the Department
received one comment regarding this provision. The commenter noted
USERRA's specific treatment for reemployment of employees of the
Federal legislative and judicial branches and, seeing no similar
provision for employees of State legislative and judicial branches,
asked whether USERRA's protections applied to the latter group. In
response, the Department again notes USERRA's broad applicability to
all employers, explicitly including the States, 38 U.S.C. 4303(4),
without regard to whether the State employer is the State's judicial or
legislative branch.
The Department received three favorable comments in response to
proposed section 1002.40, which confirms that USERRA makes it unlawful
for any employer to deny employment to a prospective employee on the
basis of his or her membership, application for membership, performance
of service, application to perform service, or obligation for service
in the uniformed services, or on the basis of his or her exercise of
any right guaranteed under the Act. In addition to these favorable
comments, the Department received two comments regarding the
application of this principle in specific circumstances. The first
commenter submits a hypothetical in which a person is on extended
active duty and cannot interview for a job or be present for the job's
start date because of service in the uniformed services. In the
scenario presented, the job advertisement states clearly that the
``most qualified'' applicants must be interviewed and the selectee is
desired to start work immediately upon selection. The person on active
duty can do neither, but does apply for the job by mail and is among
the most qualified based on the application. The employer eliminates
all applicants who cannot for whatever reason appear for an interview
or start work immediately upon selection. The commenter requests that
the Department determine that such conduct on the part of an employer
would not constitute a violation of USERRA. The second commenter
suggests a scenario in which a prospective employer withdraws an offer
of employment because of a person's military service or obligations,
and urges the Department to state in the final rule that while such a
withdrawal may constitute discrimination under USERRA, the prospective
employee is not entitled to reemployment rights under section 4312 of
the statute.
The Department declines to include either of these hypothetical
scenarios or their suggested outcomes in the final rule. Each
individual case involving an issue under USERRA must be decided based
on the specific facts of that case, with all the attendant and
potentially influential details, together with the appropriate and
applicable legal standards.
In addition, the Department received three comments regarding
whether employer inquiries about military service or obligations during
the hiring process are permissible under USERRA. The Department
concludes that it is not unlawful in itself for a prospective employer
to ask an applicant about military service or obligations. Indeed, in
many instances a prospective employee's military experience may enhance
his or her potential value to the employer. However, if information
elicited in response to such questions forms the basis of the
employer's decision not to hire the applicant, or to take other adverse
action against the person once hired, the inquiries may constitute
evidence of unlawful discrimination.
As stated earlier, temporary, part-time, probationary, and seasonal
employment positions are also covered by USERRA. The Department
received one comment on proposed section 1002.41, which establishes
that an employer does not have reemployment obligations under USERRA if
the temporary or seasonal position is for a brief, non-recurrent period
and the employee has no reasonable expectation of continued employment
indefinitely or for a significant period. The commenter submits that
the Department should state in the final rule that in such cases, an
employer need not provide employment benefits during the absence from
employment due to military service.
Section 4312(d)(1)(C) of USERRA clearly provides that an employer
does not possess any reemployment obligations if an employee departing
for military service is in a brief, non-recurrent position and has no
reasonable expectation that such employment will continue indefinitely
or for a significant period. However, an employee in a brief, non-
recurrent position may be entitled to non-seniority benefits under
certain situations. Because section 4316(b)(1)(B) requiring employers
to provide non-seniority benefits to employees is not limited by an
exception regarding employees occupying brief, nonrecurrent employment
positions, the Department interprets the mandate of section
4316(b)(1)(B) to apply to all employees, including those in brief,
nonrecurrent positions of employment. However, as discussed below in
Subpart D and in section 1002.150 of this rule, the employer is
obligated to provide non-seniority benefits to employees on military
leave only to the extent that the employer provides such benefits to
similarly situated employees on comparable non-military furlough or
leave of absence. As a result, if an employer provides non-seniority
benefits to similarly situated employees in brief, nonrecurrent
employment positions on comparable, non-military leave, those benefits
must also be provided to employees in brief, nonrecurrent employment
positions on military leave.
Section 1002.42 explains that USERRA covers employees on strike,
layoff, or leave of absence, and section 1002.43 makes clear that
persons occupying professional, executive and managerial positions also
are entitled to USERRA rights and benefits. The Department received two
comments on proposed section 1002.44, which addresses the distinction
between an independent contractor and an employee under USERRA. This
section provides that USERRA does not apply to individuals who act as
independent contractors rather than as employees of an employer, and
outlines six factors that must be considered in deciding whether a
person is an independent contractor. One commenter suggested the
Department eliminate as too limiting the word ``managerial'' from one
of the six factors that addresses a ``person's opportunity for profit
or loss that depends on his or her managerial skill.''
The second commenter disputed the six-factor test entirely, and
stated the appropriate legal standard for determining whether a person
is an
[[Page 75254]]
employee or an independent contractor is found in Nationwide Mutual
Insurance Co. v. Darden, 503 U.S. 318 (1992), a case decided under the
Employee Retirement Income Security Act (ERISA). In Darden, the Supreme
Court set forth a common-law-based ``degree of control'' test that
focuses primarily on ``the hiring party's right to control the manner
and means by which the product is accomplished.'' Id. The commenter
sought the elimination of three of the six factors set out in 1002.44
as inconsistent with the common law test and because ``they do not help
to inform the decision.''
The independent contractor provision in this rule is based on
Congress's intent that USERRA's definition of ``employee'' be
interpreted in the same expansive manner as the term is defined under
the Fair Labor Standards Act (FLSA). H.R. Rep. No. 103-65, Pt. I, at 29
(1993) (citing Brock v. Mr. W. Fireworks, Inc., 814 F.2d 1042 (5th
Cir.), cert. denied, 484 U.S. 924 (1987)); S. Rep. No. 103-58, at 40
(1993). In determining whether a person is a statutory employee or an
independent contractor under the FLSA, the ``economic reality'' test is
employed. See, e.g., Mr. W. Fireworks, 814 F.2d at 1043; see also Debra
T. Landis, Determination of ``Independent Contractor'' and ``Employee''
Status for Purposes of the FLSA, 51 A.L.R. Fed. 702 (2005). The focal
point of the test is whether the individual is economically dependent
on the business to which he or she renders service or is, as a matter
of economic fact, in business for him- or herself. Bartels v.
Birmingham, 332 U.S. 126, 130 (1947). In applying the test, courts
generally examine five or six factors. Landis, supra, section 2. No one
of the factors is determinative. Rutherford Food Corp. v. McComb, 331
U.S. 722 (1947). Moreover, the factors are ``simply analytical tools,''
thus, ``their weight, number and composition are variable.'' Dole v.
Snell, 875 F.2d 802, 805 n. 2 (10th Cir. 1989). In Mr. W. Fireworks,
the court examined five factors to use in determining independent
contractor status: ``(1) The degree of control exercised by the alleged
employer; (2) the extent of the relative investments of the putative
employee and employer; (3) the degree to which the `employee's'
opportunity for profit and loss is determined by the employer; (4) the
skill and initiative required in performing the job; and (5) the
permanency of the relationship.'' Id. (citing United States v. Silk,
331 U.S. 704 (1947)). Many courts also examine a sixth factor: Whether
the service rendered is an integral part of the employer's business.
See, e.g., Henderson v. Interchem Coal Co., 41 F.3d 567, 570 (10th Cir.
1994); Real v. Driscoll Strawberry Associates, Inc., 603 F.2d 748 (9th
Cir. 1979).
Consistent with USERRA's legislative history, the proposed section
essentially restates the test used under the FLSA to determine
independent contractor status. In addition, in FLSA cases, ``the courts
have generally indicated that the common law degree of control test is
not controlling.'' See Landis, supra, section 2. Indeed, even in
Darden, the Supreme Court indicated that the common law test is
inappropriate in FLSA cases. 503 U.S. at 326 (``While the FLSA, like
ERISA, defines an `employee' to include `any individual employed by an
employer,' it defines the verb `employ' expansively to mean `suffer or
permit to work.' This latter definition [* * *] stretches the meaning
of `employee' to cover some parties who might not qualify as such under
a strict application of traditional agency law principles.'' (internal
citations omitted)). USERRA's legislative history shows that Congress
made a clear choice between the test employed under the FLSA and the
degree-of-control test, and explicitly chose the former. In addition,
with respect to the proposal to delete the word managerial from the
second factor of the test set out in section 1002.44(b), the Department
notes that most courts use that term when applying the test. See, e.g.,
Imars v. Contractors Manufacturing Services, Inc., 165 F.3d 27 (6th
Cir. 1998). As a result, the Department will retain the test for
independent contractor as set forth in section 1002.44.
Coverage of Service in the Uniformed Service
Sections 1002.54 through 1002.62 explain the term ``service in the
uniformed services,'' list the various types of uniformed services, and
clarify that both voluntary and involuntary duty are covered under
USERRA. Section 1002.54 provides that ``service in the uniformed
services'' includes a period for which a person is absent from a
position of employment for the purpose of an examination to determine
his or her fitness to perform duty in the uniformed services. Sections
1002.55 and 1002.56 provide that service under certain authorities for
funeral honors duty or as a disaster-response appointee also constitute
service in the uniformed services. Section 1002.57 clarifies when
service in the National Guard is covered by USERRA, and section 1002.58
addresses service in the commissioned corps of the Public Health
Service, a division of the Department of Health and Human Services.
Section 1002.59 recognizes coverage for persons designated by the
President in time of war or national emergency.
Sections 1002.60, 1002.61, and 1002.62 address the coverage of a
cadet or midshipman attending a service academy, and members of the
Reserve Officers Training Corps, Commissioned Corps of the National
Oceanic and Atmospheric Administration, Civil Air Patrol, and Coast
Guard Auxiliary. The Department received one comment regarding the
provision in section 1002.61, which states that training performed by
members of ROTC is not considered ``service in the uniformed services''
under USERRA's definition of that term, except in very limited
circumstances. In particular, section 1002.61 explains that, on
occasion, Reserve and National Guard units will enroll enlisted unit
members in a local college's ROTC program in order to train them to
become officers. In such cases, the ROTC member may perform ROTC
training while in a duty status with the National Guard or Reserve
unit, either active duty training or inactive duty training. Under
these circumstances, the ROTC duty would be considered ``service in the
uniformed services'' for USERRA purposes, and the ROTC member would be
entitled to reemployment rights following such service. 38 U.S.C.
4303(13).
The commenter has requested that the Department modify section
1002.61 to establish broader USERRA protection for ROTC members.
Specifically, the commenter points out that where an ROTC member has a
contractual obligation to complete the ROTC course of training, he or
she should have USERRA protection against discrimination. An ROTC
member generally signs an agreement that specifies he or she will
complete the ROTC program and accept a commission upon graduation, or
serve as an enlisted member of the service if he or she fails to
successfully complete ROTC training. The Department agrees with the
commenter and, following consultation with the Department of Defense,
has made the necessary revision by adding subsection (b) to 1002.61.
The Department's consultation with the Department of Defense also
resulted in technical modifications to section 1002.61(a). See section
1002.61.
Absence From a Position of Employment Necessitated by Reason of Service
in the Uniformed Services
The Department received four comments regarding proposed section
1002.73, which addresses the issue of
[[Page 75255]]
the employee's reason for leaving employment as it bears on his or her
reemployment rights. Section 4312(a) of the Act states that ``any
person whose absence from a position of employment is necessitated by
reason of service in the uniformed services'' is entitled to the
reemployment rights and benefits of USERRA, assuming the Act's
eligibility requirements are met. Military service need not be the only
reason the employee leaves, provided such service is at least one of
the reasons. See H.R. Rep. No. 103-65, Pt. I, at 25 (1993).
All four commenters expressed unease about the apparent latitude
given employees in this section. The first commenter, concerned about
an employee's opportunity to seek other employment during absence for
military leave, suggested that the Department permit employers to
evaluate whether it was reasonable that an employee's absence included
a particular purpose other than the actual time engaged in service
itself. Similarly, a second commenter suggested that the Department
indicate in this provision that a neutral observer must be able to
conclude that the absence is related to performing military service.
Although the commenters did not say so explicitly, the presumed result
of imposing such requirements on an employee's non-military activities
would be to permit employers to deny reemployment if the employer
concludes that the employee's absence included a purpose that was
unreasonable or inappropriate. The effect of these suggestions would be
to impose an additional requirement for reemployment eligibility based
on an employee's conduct during absence from employment for military
service beyond the requirements contained in the statute. Consequently,
the Department will not include the proposed addition.
The third commenter requests that the Department state in section
1002.73 that an employee cannot extend the USERRA-protected period of
absence for non-military purposes. Because section 1002.73 clearly
provides that the period of absence from employment must be
necessitated by military service, there is no need for modification on
this point. The final commenter on this provision requests that the
Department require an employee to return to work within a prescribed
period of time if the employee's mobilization orders are cancelled. The
Department will not prescribe a set period of time within which an
employee must report back to work following the cancellation of
mobilization orders, because the facts and circumstances of each case
will differ. However, in the event that a mobilization is cancelled, an
employee on military leave of absence should report back to his or her
employer as soon as practicable.
USERRA does not impose a limit on the amount of time that may
elapse between the date the employee leaves his or her position and the
date he or she actually enters the service. Proposed section 1002.74
recognized that no such limit is warranted. A person entering military
service generally needs a period of time to organize his or her
personal affairs, travel safely to the site where the service is to be
performed, and arrive fit to perform service. The amount of time needed
for these preparations will vary from case to case. Moreover, the
actual commencement of the period of service may be delayed for reasons
beyond the employee's control. If an unusual delay occurs between the
time the person leaves civilian employment and the commencement of the
uniformed service, the circumstances causing the delay may be relevant
to establish that the person's absence from civilian employment was
``necessitated by reason of service in the uniformed services.'' See
Lapine v. Town of Wellesley, 304 F.3d 90, 100 (1st Cir. 2002).
The Department received two comments suggesting this provision
could be subject to abuse. One commenter suggested that the Department
should restrict the time off to prepare for military service solely to
travel or to a prescribed time period. The second commenter requested
that the Department state that USERRA permits time off from employment
to put one's affairs in order only immediately and seamlessly before
the military service itself and not on an intermittent or periodic
basis during the weeks prior to military service. The final commenter
was more concerned that employees facing an extended period of military
service are ensured an adequate period of time to prepare for service,
so requested that the rule provide that an employee is entitled to a
minimum of one week off from employment prior to service.
The Department is averse to placing in this provision the
limitations or specific time frames suggested by these commenters. The
amount of time that an employee may need to prepare for military
service will vary, and will depend on the facts of each case. In
addition, employees may need intermittent time off from work prior to
military service for brief but repeated periods to put their affairs in
order, and such periods may be necessary to, for example, interview
child care providers, go to meetings with bank officers regarding
financial matters, or seek assistance for elderly parents. Although the
Department is disinclined to include the commenter's limitations in
section 1002.74, the Department has revised the text of the provision
to reflect that the duration of the military service, the amount of
notice supplied to an employee called to military service, and the
location of the service are all factors that influence the amount of
time an employee may need in order to rest and/or put his or her
affairs in order.
Requirement of Advance Notice
Section 1002.85 explains one of the basic obligations imposed on
the service member by USERRA as a prerequisite to reemployment rights:
the requirement to notify the employer in advance about impending
military service. 38 U.S.C. 4312(a)(1). Section 4312(a)(1) of USERRA
contains three general components of adequate notice: (i) The sender of
the notice; (ii) the type of notice; and (iii) the timing of notice.
First, the employee must notify his or her employer that the employee
will be absent from the employment position due to service in the
uniformed services. An ``appropriate officer'' from the employee's
service branch, rather than the employee, may also provide the notice
to the employer on behalf of the employee. Second, the notice may be
either verbal or in writing. See 38 U.S.C. 4303(8) (defining ``notice''
to include both written and verbal notification) and 38 U.S.C.
4312(a)(1). Although written notice by the employee provides evidence
that can help establish the fact that notice was given, the sufficiency
of verbal notice recognizes the ``informality and current practice of
many employment relationships[.]'' S. Rep. No. 103-158, at 47 (1993).
The act of notification is therefore more important than its particular
form. Third, the notice should be given in advance of the employee's
departure. USERRA does not establish any bright-line rule for the
timeliness of advance notice, i.e., a minimum amount of time before
departure by which the employee must inform the employer of his or her
forthcoming service. Instead, timeliness of notice must be determined
by the facts in any particular case, although the employee should make
every effort to give notice of impending military service as far in
advance as is reasonable under the circumstances. See H.R. Rep. No.
103-65, Pt. 1, at 26 (1993).
The Department received several comments concerning the general
requirement of notice. One commenter suggested the regulations address
situations in which an employee is
[[Page 75256]]
employed by more than one employer, for instance, in cases in which an
employee is referred by a hiring hall to various employers in a common
industry, or cases in which an employment agency assigns an employee to
a particular job site. The commenter suggests that the rule provide
that where an employee is employed by one or more employers, the
employee must provide the required notice to each employer. The
Department agrees with the submission, and has modified section 1002.85
accordingly. See section 1002.85(a).
Four commenters requested the regulations adopt a general
requirement that notice be given 30 days in advance of impending
service. Another commenter requested the Department employ stronger
language with respect to an employee's obligation to give timely
notice, suggesting the final rule state the employee should ``make
every effort'' to give advance notice ``as promptly as possible.'' The
Department does not intend that these regulations impose any new
requirements, either explicit or implied, upon the exercise of the
rights granted to protected persons by the statute. Therefore, the
Department did not adopt these suggestions concerning the timeliness of
notice. However, the Department has revised Section 1002.85 to note
that the Department of Defense, in their USERRA regulations, ``strongly
recommends that advance notice to civilian employers be provided at
least 30 days prior to departure for uniformed service when it is
feasible to do so.'' See 32 CFR 104.6(a)(2)(i)(B). While this provision
does not establish an inflexible 30-day requirement for the provision
of advance notice, it does serve to demonstrate that the Department of
Defense expects that service members exercise care when providing
notice to their employers of impending service in the uniformed
services.
The Department received seven comments related to the provision in
section 1002.85 that advance notice may be either written or verbal.
One commenter requested the final rule contain a ``recommendation''
that notice be in writing. Another commenter requested the regulation
provide that an employee use the employer's established procedure for
requesting other types of leave (i.e., written), except in cases where
written notice is precluded pursuant to USERRA. Five commenters
requested the final rule require the employee to provide, either before
or shortly after the commencement of the uniformed service, some form
of documentation, either a written notice or a copy of military orders
or similar documentation of the service. As noted above, both the
statutory language and the legislative history make clear Congress's
intent that advance notice may be either verbal or written. However,
the Department again notes that the Department of Defense regulations
under USERRA provide guidance to service members that ``strongly
recommends'' that advance notice be given in writing, while
acknowledging that verbal notice is sufficient. See 32 CFR
104.6(a)(2)(i)(B). The Department of Defense regulations also make
clear that the military services must consider and, where military
requirements permit, accommodate legitimate concerns of civilian
employers concerning the military service or obligations of their
employees. See 32 CFR 104.4(c) and (d); 104.5(b)(6); and 104.6(n), (o).
Section 1002.86 implements the statutory exceptions to the
requirement of advance notice of entry into the uniformed services. The
statute recognizes that in rare cases it may be very difficult or
impossible for an employee to give advance notice to his or her
employer. To accommodate these cases, the advance notice requirement
may be excused by reason of ``military necessity'' or circumstances
that make notice to the employer ``otherwise impossible or
unreasonable.'' 38 U.S.C. 4312(b). Section 4312(b) also provides that
the uniformed services make the determination whether military
necessity excuses an individual from notifying his or her employer
about forthcoming military service. Any such determination is to be
made according to regulations issued by the Secretary of Defense. See
32 CFR part 104. Finally, section 4312(b) states that the ``military
necessity'' determination is not subject to judicial review. The same
finality and exemption from review, however, do not apply if the
employee fails to provide notice to his or her employer because the
particular circumstances allegedly make notification ``impossible or
unreasonable.'' Whether the circumstances of the case support the
employee's failure to provide advance notice of service are questions
to be decided by the appropriate fact-finder. See S. Rep. No. 103-158,
at 47 (1993).
One commenter requested the Department note in section 1002.86 that
situations in which the provision of advance notice is precluded
because it is ``impossible or unreasonable'' will be rare, especially
in light of the access to telephones, e-mail and other readily
available sources by which contact with an employer may be made. The
commenter also requested the section provide that in such rare cases,
the employee must give the employer notice at the employee's earliest
opportunity. The Department views the current language in subsection
1002.86(b) as sufficient to address the notice requirement in
``impossible or unreasonable'' circumstances, and therefore has not
adopted the commenter's suggested revision.
Proposed section 1002.87 makes explicit that the employee is not
required to obtain the employer's permission before departing for
uniformed service in order to protect his or her reemployment rights.
Imposing a prior consent requirement would improperly grant the
employer veto authority over the employee's ability to perform service
in the uniformed services by forcing the employee to choose between
service and potential loss of his or her employment position, if
consent were withheld.
Section 1002.88 implements the long-standing legal principle that
an employee departing for service is not required to decide at that
time whether he or she intends to return to the pre-service employer
upon completion of the tour of duty. Rather, the employee may defer the
decision until after he or she concludes the period of service, and the
employer may not press the employee for any assurances about his or her
plans. See H.R. Rep. No. 103-65, Pt. I, at 26 (1993) (``One of the
basic purposes of the reemployment statute is to maintain the service
member's civilian job as an `unburned' bridge.'') and S. Rep. No. 103-
158, at 47 (1993), both of which cite Fishgold v. Sullivan Drydock and
Repair Corp., 328 U.S. 275, 284 (1946).
Section 1002.88 also provides that an employee cannot waive the
right to reemployment by informing the employer that he or she does not
intend to seek reemployment following the service. This general
principle that an employee cannot waive USERRA's right to reemployment
until it has matured, i.e., until the period of service is completed,
is reiterated in the discussion of USERRA's ``Furlough and Leave of
Absence'' provisions. See section 1002.152.
The Department received three comments regarding section 1002.88,
all of which contested the Department's conclusion that a person cannot
waive the right to reemployment by notifying the employer prior to or
during the period of military service that he or she does not intend to
seek reemployment upon completion of the service. Commenters included
the Equal Employment Advisory Council, the U.S.
[[Page 75257]]
Chamber of Commerce, and a law firm. The Department's conclusion is
based on both the USERRA's broad prohibition against waivers of
statutory rights, and the statute's legislative history on this point.
Section 4302(b) of USERRA states that the statute supersedes ``any * *
* contract, agreement, policy, plan, practice, or other matter that
reduces, limits, or eliminates in any manner any right or benefit
provided by [the Act].'' 38 U.S.C. 4302(b). This provision against
waivers has been interpreted expansively; for instance, it includes a
prohibition against the waiver in an arbitration agreement of an
employee's right to bring a USERRA suit in Federal court. See, e.g.,
Garrett v. Circuit City Stores, Inc., 338 F.Supp.2d 717, 721-22
(N.D.Tex. 2004). USERRA's legislative history underscores that this
provision is intended to prohibit ``employer practices and agreements,
which provide fewer rights or otherwise limit rights provided under
amended chapter 43 or put additional conditions on those rights * *
*.'' H. Rep. No. 103-65, Pt. I, at 20 (1993). This provision, coupled
with the mandate to courts to liberally construe USERRA to the benefit
of the service member, supports the Department's determination
regarding waivers of reemployment rights made before or during service.
However, in light of the comments received on this point, the
Department has revised section 1002.88 to clarify that a person cannot
waive his or her reemployment rights prior to or during a period of
service in the uniformed services. See section 1002.88.
Period of Service
USERRA provides that an individual may serve up to five years in
the uniformed services, in a single period of service or in cumulative
periods totaling five years, and retain the right to reemployment by
his or her pre-service employer. 38 U.S.C. 4312(c). Sections 1002.99
through 1002.104 implement this statutory provision. The Department
received one comment on Section 1002.99, which implements the basic
five-year period established by the statute, requesting that the five-
year period be reduced to two years. Because the time period is
established by statute, the Department has rejected the suggestion. See
section 1002.99.
Section 1002.100 provides that the five-year period includes only
actual uniformed service time. Periods of time preceding or following
actual service are not included even if those periods may involve
absences from the employment position for reasons that are service-
related, for example, travel time to and from the duty station, time to
prepare personal affairs before entering the service, delays in
activation, etc. The Department received one comment regarding this
provision, indicating that employers may have difficulty in
ascertaining which part of the absence from employment is attributable
to actual time in the uniformed service, and which part of the absence
was service-related. As a result, the commenter suggests that employers
either be allowed to assess an employee's entire absence from
employment for the purposes of the five-year limit or, alternatively,
be permitted to request documentation from an employee that will
demonstrate the precise length of the actual military service. Because
the text of the provision comports with the statute and its legislative
history, the Department declines the suggestion to amend the text of
the rule. However, in response to the stated concerns, the Department
advises employers that the Secretaries of the Military Departments and
the Commandant of the Coast Guard are expected to provide assistance to
civilian employers of employees covered by USERRA, 32 CFR 104.5(b)(6).
Such assistance may include support to employers to ascertain which
part of the absence from employment constituted service in the
uniformed services.
Section 1002.101 clarifies that the five-year period pertains only
to the cumulative period of uniformed service by the employee with
respect to one particular employer, and does not include periods of
service during which the individual was employed by a different
employer. Therefore, the employee is entitled to be absent from
employment with a particular employer because of service in the
uniformed services for up to five years and still retain reemployment
rights with respect to that employer; this period starts anew with each
new employer. The regulation derives from section 4312(c)'s language
tying the five-year period ``to the employer relationship for which a
person seeks reemployment[.]'' 38 U.S.C. 4312(c).
One commenter requested guidance on applying the five-year limit to
cases in which an employee is employed by more than one employer. The
Department has revised section 1002.101 to reflect that if an employee
is employed by more than one employer, a separate five-year period runs
as to each employer independently, even if those employers share or co-
determine the employee's terms and conditions of employment. See
section 1002.101.
Section 1002.102 addresses periods of service undertaken prior to
the enactment of USERRA, when the Veterans' Reemployment Rights Act
(VRRA) was in effect. If an individual's service time counted towards
the VRRA's four or five-year periods for reemployment rights, then that
service also counts towards USERRA's five-year period. The regulation
implements section (a)(3) of the rules governing the transition from
the VRRA to USERRA, which appear in a note following 38 U.S.C. 4301.
The Department invited comments as to whether its interpretation in
proposed section 1002.102 best effectuates the purpose of the Act, and
received one comment in response. The commenter indicated that in reply
to the question posed in section 1002.102 regarding whether the five-
year service limit includes periods of service that the employee
performed before USERRA was enacted, the Department should not provide
an unqualified ``yes,'' but instead should indicate that ``it depends''
on whether the individual's service time counted towards the VRRA's
four or five-year periods for reemployment rights. The Department
agrees, and has made the change to the text of this provision. See
1002.102.
Section 4312(c) enumerates eight specific exceptions to the five-
year limit on uniformed service that allow an individual to serve
longer than five years while working for a single employer and retain
reemployment rights under USERRA. 38 U.S.C. 4312(c)(1)-(4)(A)-(E). The
exceptions involve unusual service requirements, circumstances beyond
the individual's control, or service (voluntary or involuntary) under
orders issued pursuant to specific statutory authority or the authority
of the President, Congress or a Service Secretary. Section 1002.103
implements this provision by describing each exception set out in the
statute.
The regulation also recognizes a ninth exception based on equitable
considerations. A service member is expected to mitigate economic
damages suffered as a consequence of an employer's violation of the
Act. See Graham v. Hall-McMillen Co., Inc., 925 F. Supp. 437, 446 (N.D.
Miss. 1996). If an individual remains in (or returns to) the service in
order to mitigate economic losses caused by an employer's unlawful
refusal to reemploy that person, the additional service is not counted
against the five-year limit. The Department sought comment on whether
an exception to the five-year limit based on the service member's
mitigation of economic loss furthers the
[[Page 75258]]
purposes of the statute, and received four comments in support of the
provision.
Section 1002.104 implements section 4312(h), which prohibits the
denial of reemployment rights based on the ``timing, frequency, and
duration'' of the individual's training or service, as well as the
nature of that service or training. 38 U.S.C. 4312(h). A service
member's reemployment rights must be recognized as long as the
individual has complied with the eligibility requirements specified in
the Act. Id. The legislative history of section 4312(h) makes clear the
Congress' intent to codify the holding of the United States Supreme
Court in King v. St. Vincent's Hospital, 502 U.S. 215 (1991). See H.R.
Rep. No. 103-65, Pt. I, at 30 (1993); S. Rep. No. 103-158, at 52
(1993). In King, the court held that no service limit based on a
standard of reasonableness could be implied from the predecessor
version of USERRA. Section 4312(h). Section 1002.104 therefore
prohibits applying a ``reasonableness'' standard in determining whether
the timing, frequency, or duration of the employee's service should
prejudice his or her reemployment rights.
Consistent with views expressed in the House report, Section
1002.104 counsels an employer to contact the appropriate military
authority to discuss its concerns over the timing, frequency, and
duration of an employee's military service. The Department received two
comments regarding this provision. One commenter suggests that section
1002.104 state that employer contacts with a military authority to
discuss concerns regarding timing, frequency, and duration of an
employee's military service should not be considered as evidence of
discrimination in violation of section 4311 of USERRA. The Department
declines the opportunity to make such a categorical statement in the
final rule that would apply in all circumstances. However, the
Department notes that good faith contacts with the military to express
legitimate concerns about timing, frequency, and duration of an
employee's military service do not evidence a discriminatory motive.
The second comment regarding section 1002.104 involves the provision
stating that ``military authorities are required to consider requests
from employers of National Guard and Reserve members to adjust
scheduled absences from civilian employment to perform service.'' The
commenter asks whether this statement subjects the military authority
to suit under the Administrative Procedures Act (APA) in cases in which
it may be alleged that the military authority's response to such
requests is arbitrary and capricious. The Department views this inquiry
as raising an issue beyond the scope of these regulations. However, the
Department notes that this requirement is established by Department of
Defense regulations. See 32 CFR 104.6(o).
Application for Reemployment
In order to protect reemployment rights under USERRA, the returning
service member must make a timely return to, or application for
reinstatement in, his or her employment position after completing the
tour of duty. 38 U.S.C. 4312(a)(3). Sections 4312(e) and (f) establish
the required steps of the reinstatement process. 38 U.S.C. 4312(e),
(f). Section 4312(e) of USERRA establishes varying time periods for
requesting reinstatement, and section 1002.115 explains that the three
statutory time periods for making a request for reinstatement are
dependent on the length of the period of military service, except in
the case of an employee's absence for an examination to determine
fitness to perform service.
The Department received three general comments with regard to the
time periods set out in section 1002.115. Two commenters suggest that
the Department indicate that employees and employers may lawfully agree
to extend the time periods for making a request for reinstatement.
Section 4302(a) of USERRA states that ``[n]othing in this chapter shall
supersede, nullify or diminish any * * * contract, agreement, policy,
plan, practice, or other matter that establishes a right or benefit
that is more beneficial to, or is in addition to, a right or benefit
provided'' under USERRA. The Department concludes that this statutory
provision permits the types of agreements to which the commenters
refer, and finds it unnecessary to add such a provision to the final
rule. A final general comment suggests that the Department indicate
that an employee's separate but proximate periods of service be
accumulated into one period for the purposes of determining the time
period within which to apply for reemployment. The Department disagrees
with the approach offered by the commenter. Under USERRA, an employee
may not add together service days from separate but proximate periods
of military service to create a longer period within which to apply for
reemployment with the employer. Similarly, if an additional period of
military service intervenes in the statutory period within which to
apply for reemployment with the employer, an employee may not bank any
remaining days from that period and add them on to the subsequent
period within which to report back to or apply for reemployment with
the employer.
Section 1002.115 also specifies the actions that must be taken by
the employee. Section 4312(e)(1)(A)(i) of USERRA provides that the
employee reporting back to the employer following a period of service
of less than 31 days must report:
(i) Not later than the beginning of the first full regularly
scheduled work period on the first full calendar day following the
completion of the period of service and the expiration of eight
hours after a period allowing for the safe transportation of the
person from the place of that service to the person's residence * *
*
38 U.S.C. 4312(e)(1)(A)(i).
The Department interprets this provision as requiring the employee
to report at the beginning of the first full shift on the first full
day following the completion of service, provided the employee has a
period of eight hours to rest following safe transportation to the
person's residence. See H.R. Rep. No. 103-65, Pt. I, at 29 (1993). If
it is impossible or unreasonable for the employee to report within this
time period, he or she must report to the employer as soon as possible
after the expiration of the eight-hour period.
The Department invited comment as to whether the interpretations in
section 1002.115(a) best effectuate the statute, and received four
comments in response. Two commenters asserted that the statute requires
that an employee report back to the employer ``by the beginning of the
first full shift on the first calendar day that falls after the eight
hour rest period ends.'' One commenter requested that this provision be
re-drafted to improve its clarity, and one commenter requested that the
Department extend the 8-hour period of rest because it is too brief.
After reviewing these comments, and the arguments in support of a
modification to this provision, the Department views section
1002.115(a), which requires an employee to report back to the employer
no later than the beginning of the first full regularly-scheduled work
period on the first full calendar day following the completion of the
period of service, provided the employee has an 8-hour rest period, as
a proper and accurate interpretation of section 4312(e)(1)(A)(i).
Neither the statute nor the legislative history suggests that an
employee must report back on the first full shift on the day following
the day that includes the period of rest. Nor can the Department
[[Page 75259]]
extend that period of rest beyond eight hours, as is called for in the
statute.
An additional commenter sought guidance on the application of
section 1002.115(a) to a case in which an employee is subject to
rotating shifts. This rule is not intended as an opportunity to resolve
issues arising under individual facts and circumstances. However, the
Department views the text of section 1002.115(a), which requires an
employee to report back ``at the beginning of the first full regularly-
scheduled work period on the first full calendar day following the
completion of the period of service,'' as capable of resolving the
inquiry. Under this provision, an employee need not report back until
the beginning of the first full regularly scheduled work period,
whether the shift is conventional or rotating.
Two final commenters on this provision asked the Department to
clarify the application of USERRA's rules covering reporting back to
work following periods of service for less than 31 days in light of a
recent case from a Federal appeals court, Gordon v. WAWA, Inc., 388
F.3d 78 (3rd Cir. 2004). In Gordon, an employee returning from weekend
duty with the Army Reserve stopped by his workplace to collect his
paycheck and was allegedly ordered by the employer to return to work
before he had an opportunity to return home and rest. The employer
allegedly threatened Gordon with termination if he did not work the
upcoming shift. The employee apparently did not insist on his rest
period, and worked the upcoming (midnight) shift. He was not denied
reemployment. After working his shift, the employee suffered a fatal
automobile accident while driving home.
The court reviewed USERRA's legislative history, which demonstrates
Congressional intent that service members reporting back to their
civilian employment ``be allowed sufficient time to return to their
residence and be rested before they are to perform their work.'' 388
F.3d at 83, citing S. Rep. No. 103-158, at 50 (1993). However, the
court held that the time periods provided by USERRA in which a
returning service member must notify the pre-service employer of his or
her intent to return to work are obligations the service member must
meet to reclaim the pre-service job, not rights that can be enforced
under USERRA in cases where, as here, the person was in fact
reemployed. As a result, the court held that the statute's reporting-
back requirement, 38 U.S.C. 4312(e)(1), ``does not confer a right to
rest'' to a returning service member.
Although Gordon did not interpret USERRA to provide relief to an
employee allegedly injured by the employer's denial of the eight-hour
rest period, the Department's view is that the case does not interfere
with the eight-hour, 14-day, and 90-day rest/notification periods
allowed under USERRA. The facts in Gordon were unusual; the employer
reportedly threatened the employee with termination if he did not work
the upcoming shift, but the employee apparently did not insist on his
rest period, and was not denied reemployment. Consequently, the
employee was not denied his USERRA right to be reemployed.
Gordon also does not change the procedure that a service member
must follow to be entitled to reemployment rights. An employee must
report to the employer or apply for reemployment within the specified
time periods to be eligible for reemployment. If the employee is
required by the employer to report to work, or apply for reemployment,
earlier than is provided by USERRA, the employee should seek assistance
from VETS or seek relief in the courts to prevent the employer from
enforcing such a policy. A service member may not be required by an
employer to forego any portion of the applicable eight-hour, 14-day, or
90-day rest/notification period as a condition of reemployment.
Section 1002.115(b) and (c) set out the other time periods in which
an employee must report back to an employer. If the individual served
between 31 and 180 days, he or she must make an oral or written request
for reemployment no more than 14 days after completing service. If it
is impossible or unreasonable for the employee to apply within 14 days
through no fault of the employee, he or she must submit the application
not later than the ``next full calendar day after it becomes possible
to do so.'' The Department indicated in the proposed rule that it
understands the term ``next'' in the clause ``next first full calendar
day'' in section 4312(e)(1)(C) to be superfluous, and received one
comment agreeing with the position. Finally, if the individual served
more than 180 days, he or she must make an oral or written request for
reemployment no more than 90 days after completing service.
Section 1002.116 addresses the situation in which a service member
is unable to meet the foregoing timeframes due to the individual's
hospitalization for or convalescence from a service-related illness or
injury. Such a person must comply with the notification procedures
determined by the length of service, after the time period required for
the person's recovery. The recovery period may not exceed two years
unless circumstances beyond the individual's control make notification
within the required two-year period impossible or unreasonable.
The Department received two requests for guidance on section
1002.116 from one commenter. The commenter would like to know whether
the two-year period begins on the date of military discharge, on the
date the recovery period ends, or on the date the employee returns to
work, and how to apply the rule in a situation in which the returning
service member has already reported to the employer and a service-
related medical condition arises requiring absence from work. As to the
first issue, section 4312(e)(2)(A) of the statute states that a
``person who is hospitalized for, or convalescing from, an illness or
injury incurred in, or aggravated during, the performance of service in
the uniformed services shall, at the end of the period that is
necessary for the person to recover from such illness or injury, report
to the person's employer * * * or submit an application for
reemployment with such employer * * * [and] such period of recovery may
not exceed two years.'' The Department concludes, based on this
provision of USERRA, that the two-year recuperation period begins on
the date of completion of the service.
This represents a change from USERRA's predecessor law, under which
an employee with a service-related injury or illness could seek
reemployment within 90 days of the conclusion of a period of
hospitalization of not more than one year (a maximum of one year plus
90 days). USERRA's enactment extended the period for recuperation and
recovery from one year to two years, but did not allow any additional
time for application or reporting back after the end of the
recuperation period. USERRA's legislative history supports this reading
by indicating that if time were needed for recuperation and recovery,
the time for application or reporting back would be extended ``by up to
two years.'' See, e.g., S. Rep. No. 103-158, at 51 (1993) (USERRA
``provides for extending reemployment reporting or application dates
for up to two years.''); H.R. Rep. No. 103-65, Pt. I, at 29 (1993)
(USERRA extends the reporting deadlines ``by up to two years.'').
As a result, unless extended to accommodate circumstances beyond
the control of the employee that make
[[Page 75260]]
reporting within such period impossible or unreasonable, the entire
period between the date of completion of service and the date of
reporting to work or applying for reemployment can be no greater than
two years, and there is no longer an additional extension of 14 or 90
days for applying for reemployment at the end of the recuperation
period. However, because the recuperation period is coextensive with
the 14- or 90-day application period under USERRA, the service member
is entitled to whichever period is longer, but not both.
The second request for guidance on section 1002.116 asks whether
the provision of section 1002.116 applies in a situation in which the
returning service member has already reported to the employer and a
service-related medical condition arises, necessitating absence from
work. The Department concludes that the extension of time for
recuperation and recovery applies only to the period in which the
employee has to report back or apply for reemployment, and does not
apply after the person is reemployed. Although this conclusion does not
provide for cases in which service-related injuries or illnesses, such
as post-traumatic stress disorder or exposure to battlefield toxins,
become apparent only following reemployment, it is nevertheless
consistent with the unambiguous statutory language on this issue. The
Department has revised section 1002.116 to reflect this position.
Section 1002.117 covers the situation where the employee fails to
report or to submit a timely application for reemployment. Such failure
does not automatically divest the individual of his or her statutory
reemployment rights. See 38 U.S.C. 4312(e)(3). However, the employer
may subject the employee to the workplace rules, policies and practices
that ordinarily apply to an employee's unexcused absence from work.
Sections 1002.118 through 1002.123 establish procedures for
notifying the employer that the service member intends to return to
work. These sections also address the requirement that the returning
service member provide documentation to the employer in certain
instances. The documentation provides evidence that the service member
meets three of the basic requirements for reemployment: Timely
application for reinstatement, permissible duration of service, and
appropriate type of service discharge. USERRA expressly provides that
the Secretary may prescribe, by regulation, the documentation necessary
to demonstrate that a service member applying for employment or
reemployment meets these requirements.
The Department received two comments on section 1002.119 of the
proposed rule, which indicates to whom an employee must submit an
application for reemployment. The first commenter suggests that the
Department incorporate in this provision a statement that an employee
is ``encouraged, but not required, to notify [the employee's] human
resources officer and * * * supervisors as soon as practicable.'' The
second commenter suggests that the provision include a statement that
if a pre-service employer ``has an established channel for receiving
employment or reemployment applications, [an employee] should follow
that channel.'' The Department views both suggestions as ones that can
be construed as imposing on service members obligations not set forth
in the statute and, as a result, declines the proposals.
The Department received two comments on proposed section 1002.120,
which, as originally drafted, provided unconditionally that the service
member does not forfeit reemployment rights with one employer by
working for another employer after completing his or her military
service, as long as the service member complies with USERRA's
reinstatement procedures. The commenters suggested either deletion of
the provision entirely, or the placement of some limitations on the
right to seek alternative employment during the application period. One
commenter suggests that such limitations are required in cases in which
such alternative employment may violate the pre-service employer's
workplace policies, such as employment with a competitor of the pre-
service employer that violates an employer's policy against non-
competition, or employment that presents a conflict of interest for the
employee. The Department agrees with the comments, and has modified
this provision accordingly. Section 1002.120 now reflects that a
service member's alternative employment during the application period
must not violate the pre-service employer's employment policy to such a
degree that it constitutes just cause for discipline or termination by
the pre-service employer. The Department views this new language as
striking an appropriate balance between protecting the proprietary
interests of pre-service employers and providing flexibility for
employees to explore other post-service employment opportunities. In
addition, the modification comports with USERRA's provision protecting
reemployed service members from discharge for a certain period
following reemployment, except for ``cause.'' 38 U.S.C. 4316(c).
Section 4312(f) of USERRA describes the documentary evidence that
the service member must submit to the employer in order to establish
that the service member meets the statutory requirements for
reinstatement, and the rule implements these documentation requirements
at 1002.121 to .123. Section 1002.121 establishes that an individual
applying for reemployment who served more than 30 days in military
service must provide certain documentation upon the employer's request.
The documentation must establish that the individual's application is
timely; he or she has not exceeded the five-year service limitation;
and the type of separation from service does not disqualify the
individual from reemployment. Section 1002.122 provides that an
employer is required to reemploy a service member even if documentation
establishing the service member's reemployment eligibility does not
exist or is not readily available.
The Department received five comments on sections 1002.121 and
1002.122, each of which addresses a different aspect of the provisions.
One comment urged the Department to include language in section
1002.122 imposing an affirmative obligation on the employee to make a
``reasonable effort'' to secure the documentation, and assist the
employer in obtaining such documentation. Section 4312(f)(1) of USERRA
states that an employee applying for reinstatement ``shall provide to
the person's employer'' the requested documentation (emphasis
supplied). Section 1002.121 follows the directive of the statute and
similarly states that the employee ``must'' provide the documentation.
The Department concludes that adding the ``reasonable effort'' language
to the rule is redundant, and arguably diminishes the mandatory
directive of the statute. Furthermore, Department of Defense
regulations under USERRA obligate the military services to provide
documentation upon request by the service member ``that may be used to
satisfy the Service member's entitlement to statutory reemployment
rights and benefits.'' 32 CFR 104.6(l). The service branch is therefore
ultimately obligated to provide the documentation that the employee
requires in order to satisfy his or her own obligation to the employer.
The Department concludes that a service member seeking reemployment
will realistically make every effort to
[[Page 75261]]
obtain the documentation or assist the employer in doing so. However,
in difficult cases, the military services can assist employers.
Two comments regarding these provisions were very similar in their
suggested solutions to the situation in which documentation is
unavailable in a timely fashion. One comment suggested specific time
frames for the employee to provide the documentation, and both
suggested sanctions for failing to do so in a timely manner. The
suggestions included a three-step proposal that should apply to an
employee who is unable to produce documentation at the time he or she
applies for reemployment: First, the employer may require the employee
to execute an affidavit confirming the dates of service, and the
employer may terminate the employee if the information is later proven
incorrect; second, if the employee does not provide requested
documentation within a specific period (28 business days is suggested),
the employer may place him or her on unpaid leave; and third, if the
employee does not provide the documentation after a specific period of
unpaid leave (28 days is again suggested), the employer may terminate
him or her.
The Department concludes that the proposed change is inconsistent
with the statute and USERRA's general policy of eliminating obstacles
to prompt reemployment. Both section 1002.122 and the legislative
history of USERRA's section 4312(f) clearly establish that the employer
may not deny or delay reemployment if the requested documentation is
nonexistent or not ``readily available.'' H.R. Rep. No. 103-65, Pt. I,
at 29-30 (1993); S. Rep. No. 103-158, at 51 (1993). Requiring an
affidavit in lieu of documentation at the time of reemployment places
an additional condition on reemployment beyond the general obligation
to obtain the documentation. Furthermore, both sections 4312(f)(3)(A)
and 1002.122 permit an employer to terminate an employee only if the
documentation ultimately proves the employee was not eligible for
reemployment. Terminating the employee for failure to provide the
documentation after a prescribed period is inconsistent with the
statute.
The fourth comment suggests that 1002.122 be modified to state that
an employer may terminate an employee following reemployment if
documentation received after reemployment indicates that the employee
was not entitled to reemployment, ``unless the employer's policy, plan,
or practice provides otherwise under the circumstances.'' The
Department views the provision permitting an employer to terminate an
employee if documentation fails to support the employee's entitlement
to reemployment as permissive and not a mandatory directive. The
proposed addition neither enhances nor circumscribes the employer's
discretion on this subject, and is therefore unnecessary.
The final comment with respect to these provisions urged the
Department to require the employee to provide the documentation within
a reasonable time. The Department concludes that adoption of this
option imposes an additional obligation on the employee not
contemplated by the statute, particularly in those cases in which
delays in obtaining documentation following return from service may be
caused by the military unit and not by the employee. After considering
all the comments on these provisions, the Department has concluded that
it will retain them in unchanged form. See sections 1002.121 and
1002.122.
Character of Service
USERRA makes entitlement to reemployment benefits dependent on the
characterization of an individual's separation from the uniformed
service, or ``character of service.'' 38 U.S.C. 4304. The general
requirement is that the individual's service separation be under other
than dishonorable conditions. Section 1002.135 lists four grounds for
terminating the individual's reemployment rights based on character of
service: (i) Dishonorable or bad conduct discharge; (ii) ``other than
honorable'' discharge as characterized by the regulations of the
appropriate service Secretary; (iii) dismissal of a commissioned
officer by general court-martial or Presidential order during a war (10
U.S.C. 1161(a)); and, (iv) removal of a commissioned officer from the
rolls because of unauthorized absence from duty or imprisonment by a
civil authority (10 U.S.C. 1161(b)). 38 U.S.C. 4304(1)-(4). The
uniformed services determine the individual's character of service,
which is referenced on Defense Department Form 214. See section
1002.136. For USERRA purposes, Reservists who do not receive character
of service certificates are considered honorably separated; many short-
term tours of duty do not result in an official separation or the
issuance of a Form 214.
Sections 1002.137 and 1002.138 address the consequences of a
subsequent upgrading of an individual's disqualifying discharge.
Upgrades may be either retroactive or prospective in effect. An upgrade
with retroactive effect may reinstate the individual's reemployment
rights provided he or she otherwise meets the Act's eligibility
criteria, including having made timely application for reinstatement.
However, a retroactive upgrade does not restore entitlement to the back
pay and benefits attributable to the time period between the
individual's discharge and the upgrade.
The Department received two comments regarding the character-of-
service provisions. The meaning of the first comment was difficult to
discern, but appeared to be related to an obligation an employer might
have to pay back-wages to an employee who receives a retroactive
upgrade in the characterization of his or her service. Section 1002.137
expressly provides that in such a case an employer is not required to
pay back-wages for the period from the date of completion of service to
the date of the retroactive upgrade. The final commenter requests that
in the event a service member otherwise eligible for reemployment
receives an upgrade to the characterization of his or her service
months or even years later, the employer should enjoy some flexibility
in its obligation to reemploy. Because a person who receives a
retroactive upgrade and meets all other eligibility requirements is
eligible for reemployment, there is no basis for providing flexibility
regarding an employer's obligation to reemploy. However, such employers
may rely on the undue hardship or changed circumstances defenses, if
applicable. After considering all the comments on the character-of-
service provisions, the Department will retain them as originally
proposed. See sections 1002.137 and 1002.138.
Employer Statutory Defenses
USERRA provides three statutory defenses that an employer may
assert against a claim for USERRA benefits. The employer bears the
burden of proving any of these defenses. 38 U.S.C. 4312(d)(2)(A)-(C).
An employer is not required to reemploy a returning service member
if the employer's circumstances have so changed as to make such
reemployment impossible or unreasonable. 38 U.S.C. 4312(d)(1)(A). In
view of USERRA's remedial purposes, this exception must be narrowly
construed. The employer bears the burden of proving that changed
circumstances make it impossible or unreasonable to reemploy the
returning veteran. 38 U.S.C. 4312(d)(2)(A); proposed section 1002.139.
The change must be in the pre-service employer's circumstances,
[[Page 75262]]
as distinguished from the circumstances of its employees. For example,
the defense of changed circumstances is available where reemployment
would require the creation of a ``useless job or mandate reinstatement
where there has been a reduction in the workforce that reasonably would
have included the veteran.'' H.R. Rep. No. 103-65, Pt. I, at 25 (1993),
citing Watkins Motor Lines v. De Galliford, 167 F.2d 274, 275 (5th Cir.
1948); Davis v. Halifax County School System, 508 F. Supp. 966, 969
(E.D. N.C. 1981). However, an employer cannot establish that it is
unreasonable or impossible to reinstate the returning service member
solely by showing that no opening exists at the time of the
reemployment application or that another person was hired to fill the
position vacated by the veteran, even if reemploying the service member
would require terminating the employment of the replacement employee.
See Davis at 968; see also Cole v. Swint, 961 F.2d 58, 60 (5th Cir.
1992); Fitz v. Bd. of Education of Port Huron Area Schools, 662 F.
Supp. 1011, 1015 (E.D. Mich. 1985), aff'd, 802 F.2d 457 (6th Cir.
1986); Anthony v. Basic American Foods, Inc., 600 F. Supp. 352, 357
(N.D. Cal. 1984); Goggin v. Lincoln St. Louis, 702 F.2d 698, 704 (8th
Cir. 1983). Id.
An employer is also not required to reemploy a returning service
member if such reemployment would impose an undue hardship on the
employer. 38 U.S.C. 4312(d)(1)(B). As explained in USERRA's legislative
history, this defense only applies where a person is not qualified for
a position due to disability or other bona fide reason, after
reasonable efforts have been made by the employer to help the person
become qualified. H.R. Rep. No. 103-65, Pt. I, at 25 (1993). USERRA
defines ``undue hardship'' as actions taken by the employer requiring
significant difficulty or expense when considered in light of the
factors set out in 38 U.S.C. 4303(15). USERRA defines ``reasonable
efforts'' as ``actions, including training provided b |
