A Second U.S. Appeals Court Holds Paid Leave May Be Necessary for Military Service

 In a recent case, the U.S. Appeals Court for the Third Circuit has held that paid leave is a “right and benefit” as provided under the Uniformed Services Employment and Reemployment Rights Act (USERRA). This means that if employers provide this benefit to employees while they take other similar forms of leave such as jury duty, this must also be provided to employees during military service leave.

This ruling follows the lead set by the Seventh Circuit Court closely and sets an even firmer precedent that employers should take notice of.

In this case, the plaintiff worked as an employee for a major shipping service while serving in the United States Navy Reserve. During times of military leave, the worker received no compensation from the civilian employer. However, the employer allegedly paid employees for similar forms of leave, such as for jury duty or sickness. As a result, the plaintiff filed a lawsuit against the employer.

Initially, the District Court rejected the claims holding that USERRA does not protect paid leave as a “right and benefit.” The plaintiff then appealed this decision. 

The Third Circuit Court reversed the lower court’s decision rejecting the employer’s argument that paid military leave is a distinct benefit at issue rather than simply paid leave as a whole. The court found this reading of the issue, i.e., adding the extra text “military,” disagrees with USERRA, which does not create a “class of rights and benefits” but instead guarantees those who miss work for service reasons the same benefits as those who miss work for similar reasons.

The court then interpreted USERRA’s guarantee to mean all of the terms, conditions, and privileges associated with employment, therefore, affecting a wide range of benefits, among these is payment received during leave. As a result, the Third Circuit Court remanded the case to the District Court to consider whether the other paid leave offered by the employer was comparable to the plaintiff’s military leave.

Employer Takeaway

This broad interpretation of USERRA, in this case, mirrors the Seventh Circuit’s decision and is only one of many putative class action suits which have been filed across the country as a result. This decision is likely to cause a great deal of further litigation against employers focused on unpaid military leave.

Further, it is important to understand that this will not only focus on whether pay is offered but also the quantity due to the different pay rates offered by many employers. The risk for employers is further raised by the fact that USERRA typically holds no statute of limitations. Overall, employers have considerable reason to review their leave policies in order to reduce their risk as quickly as possible.