USERRA Violations: A Prescription for Disaster

USERRA Violations: A Prescription for Disaster

by | May 5, 2021

USERRA Compliance Alert:

Violating the Uniformed Services Employment and Reemployment Rights Act can cause serious side effects.

Once again, the Department of Justice (DOJ) has shown its willingness to pursue Uniformed Services Employment and Reemployment Rights Act (USERRA) violation claims against civilian employers who try to shirk their responsibilities to our reserve component servicemembers. This time it commenced, and quickly settled, a lawsuit against Maimonidas Medical Center (MMC) of Brooklyn, “an affiliate of Northwell Health, New York’s largest healthcare provider and private employer, with a network of 23 hospitals and 665 outpatient facilities.” The lawsuit alleged three distinct violations of USERRA arising from Lt. Col. Rego’s termination as a management-level pharmacist. Read the press release from the U.S. Attorney of the Eastern District of New York and the DOJ’s complaint.

Under USERRA, the DOJ may commence federal lawsuits in the name of the aggrieved servicemember against private or public employers who are alleged to have violated USERRA. Typically, the DOJ will receive referrals from the Department of Labor VETS and will negotiate resolutions or, if unsuccessful, commence a civil suit on behalf of the servicemember for the USERRA violation. Between 2004 and the end of FY 2019, the DOJ has filed 107 USERRA lawsuits and favorably resolved 195 USERRA complaints – either through consent decrees obtained in those suits or through facilitated private settlements. In recent years, the DOJ will actually file two to nine cases per year alleging USERRA violations under federal law.

In the case against MMC, Army Reserve Lt. Col. Rego, MMC’s Pharmacy Operations manager, was employed from April 19, 2016 until his termination on November 21, 2017. His termination was ostensibly due to a reduction in force (RIF) by MMC. However, the details as alleged by the DOJ tell a story of three specific USERRA violations that led to his termination in 2017:

  1. Lt. Col. Rego was discriminated against based upon uniformed service.
  2. MMC retaliated against Rego based upon his submitting a complaint for USERRA violation.
  3. MMC failed to retain him following reemployment after a period of uniformed service (in this case, up to 180 days) except for cause.

What led to Lt. Col. Rego’s termination?

During his employment with MMC, Rego was first given a glowing performance review. But immediately after that review – and just five months into his employment – he was called to uniformed service from September 12, 2016 until April 24, 2017. Immediately after returning from that service, Rego was subjected to a pattern of harsh criticism and a concerted effort to oust him from his position, including a series of “write-ups” criticizing his work “just two days after [Rego’s] return to work.”

In addition, his superiors made comments “resent[ing] the competing demands posed by his job at MMC and his military service and deemed his responsibilities to the Army Reserves incompatible with his pharmacy job.” Although MMC informed Rego that he was being terminated shortly after this review, once Rego submitted a USERRA violations complaint to the DoL-VETS on June 12, 2017, MMC immediately assured him that they were not terminating him.

Was the termination simply reframed?

BUT the story continues to its tragic end. Rego had another uniformed service from July 17 until October 2, 2017. Just seven weeks after returning to work, on November 21, 2017, MMC informed him that “he was being terminated, as part of a hospital-wide reduction in force (“RIF”) designed to save money at the hospital.”

Thanks to the diligent investigatory efforts of DoL-VETS, there was more to the story than what the employer disclosed. For instance, although it characterized Rego’s termination as a typical RIF, the company in fact advertised his position as open for applicants, before and after his termination. It also reassigned duties to existing and new employees, which, in fact, increased the budget of the unit after his termination. Indeed, another employee was hired at a level of pay comparable to Lt. Col. Rego’s pay while employed with MMC. And Rego was the only employee of the more than 100 employees in the Pharmacy Department terminated as a result of the RIF.

Secondly, the fact that MMC retracted its previous “termination” of the servicemember only after he submitted the matter to DOL-VETS, only to create a subsequent reason for his termination in the form of the RIF, created a compelling case for retaliation under Section 4311(b).

Finally, the last basis for the DOJ’s enforcement lawsuit was upon 38 U.S.C. § 4316(c)(2), where a returning servicemember cannot be terminated “except for cause … within 180 days after the date of such reemployment, if the person’s period of service before the reemployment was more than 30 days but less than 181 days.” (i.e., “Failure to Properly Retain”). In this case, MMC was attempting to avoid this restriction by relying upon the exception in that section whereby an employer could terminate a returning a servicemember “for cause” if it was “a legitimate nondiscriminatory reason” such as a “reduction in force.” 20 C.F.R. § 1002.248(b).

However, as in many such situations, enforcement authorities are unwilling to simply to take the employer’s stated purpose for the so-called RIF at face value. In this case, the DOJ refused to accept the employer’s pretext for the termination as a RIF. Instead, it looked at:

  1. Who, in addition to the servicemember, was terminated as part of the RIF,
  2. whether the responsibilities for the eliminated position were actually eliminated or simply divided up to other employees or future employees,
  3. what was the overall financial/budgetary impact on the organization, and
  4. whether there were any past negative comments regarding the employee’s uniformed service.

The DOJ’s message is clear.

The DOJ will not allow employers to circumvent USERRA’s protections simply by characterizing a discriminatory termination as a “reduction in force.” You cannot:

  • discriminate based upon an employee’s uniformed service,
  • retaliate against employees who seek to report or support a report of a USERRA violation, or
  • terminate an employee under the pretext of a “reduction in force” policy when it is clearly designed to terminate an employee protected by USERRA based on his or her uniformed service.

Employers: Be cautioned.

There is no statute of limitations on violations of USERRA or its predecessor, the Veterans’ Reemployment Rights Act (VRRA). And being the target of a federal lawsuit brought by the DOJ for your USERRA violations can be a tough pill to swallow.

Mathew M. Meyer, Esq., Cornell Law ’95, is a business law, regulation, and commercial litigation attorney in the Twin Cities area. A Marine Veteran, Mr. Meyer is a long-time volunteer and mediator with the Department of Defense ESGR program.  He is the Minnesota ESGR Ombudsman Director and Military Liaison to local Marine and Navy Reserve units, and frequently advises servicemembers and employers regarding USERRA legal issues. All opinions, comments, and analysis are his alone, and do not reflect those of the Department of Defense ESGR program, or any other organization.

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