Uncle Sam Asks Bosses For Help

Betty Bailey, the assistant manager at Joe Smith's strugglinghardware store, has been serving in the Marine Corps in Iraq formore than a year.

When Frank Jones, an insurance agent, checks on Smith's benefitsneeds, Smith asks about finding a permanent replacement.

In most cases, labor law experts say, Jones should say, “TakeBailey back, or talk to a lawyer before you get yourself in hugetrouble.”

Some U.S. business owners and their benefits advisors arestarting to think more than they had ever expected about thehardship clause of the Uniformed Services Employment andReemployment Rights Act.

The act, which replaced the Veterans Reemployment Rights Law in1994, requires employers to take back reservists, Guard members andother employees who have been away on active military service forperiods of 5 years or less.

The act also requires an employer to give employees who are outon military leave a chance to continue civilian health benefits.The employer and its insurers can charge only 102% of its healthbenefits costs for the continuation coverage.

When the employees return from military leave, the employer mustgive them a chance to make up missed retirement plan contributionsand must ensure that they receive all the other benefits that theywould have received if they had never left.

Both the law and the government are firmly on the side of thereturning service member.

USERRA excuses employers from their legal obligations toreturning service members only “when doing so would be of suchdifficulty or expense as to cause undue hardship,” according to thetext of the law.

Litigation focusing on USERRA hardship exemptions has been rarebecause “if the employer is on any shaky ground at all, theyprobably back down,” says David Powell, a lawyer with the Groom LawGroup, Chartered, Washington.

Unless employers have liquidated their operations or can proveother clear-cut cases of hardship, in most cases, “their lawyersare going to tell them theyve got the short end of the stick,”Powell warns. “[USERRA] is very pro returning employee.”

But some reservists and Guard members now have been on activemilitary duty for a year or more, and the military appears to beextending the tours of some members of the Guard and Reserves inways that could keep them away from their civilian jobs for manymore months than they originally had expected.

In some cases, employers might have suffered massive layoffs orshut down entirely since their citizen soldiers went to war.

Sen. Olympia Snowe, R-Wash., announced in October 2003 that heragency had asked the Congressional Budget Office to conduct asurvey to see how service members' extended absences are affectingsmall employers, and whether there might be any ways to lightenemployers' burden without weakening the U.S. military.

If an employer believes it has a valid reason to draw on theUSERRA hardship clause, it should seek advice from an experiencedlabor lawyer as early as possible for help with interpreting USERRAand documenting the need for the exemption, Powell says.

Guidance on what constitutes a clear-cut need for an exemptionand how to document that need is scarce.

Because USERRA litigation is so rare, “USERRA is a law thatstill has a lot of gray areas in it,” Powell adds.

The Department of Labor's Veterans' Employment and TrainingService has tried to help by putting out a “non-technical resourceguide” for employers facing questions about USERRA.

The guide is “not legally binding,” according to a VETSdisclaimer that accompanies the guide.

The Labor Department says it is developing more authoritativeguidance.

But Powell says a cautious employer should assume that thecourts will construe USERRA in favor of the returning servicemember.

Even if a company has shut down the division that employed thereturning service members or liquidated entirely by selling out toa competitor, service members still might have a right to get theirjobs back, Powell says.

Before a company that has shut down a division can firereturning service members and deny them benefits, it should be ableto show that the returning service members are not qualified tohold any of the remaining jobs in surviving company divisions,Powell says.

Powell adds that an acquirer that has bought the servicemembers' former employer may inherit a legal obligation to reemploythe service members.

Reproduced from National Underwriter Edition, April 19, 2004.Copyright 2004 by The National Underwriter Company in the serialpublication. All rights reserved. Copyright in this article as anindependent work may be held by the author.