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Military discrimination and arbitration

If My Employer Violated USERRA, Can I Be Forced to Use Arbitration?

Under the Uniformed Services Employment Rights Act of 1994 (USERRA), veterans and service members have some protections from discrimination based on their military service and are given the right to return to their civilian jobs once their active service ends. But, as in many other areas of employment law, federal courts have dismissed USERRA legal claims where the plaintiff has signed an agreement requiring employment-related legal claims to go to arbitration. Arbitration is an alternate dispute resolution method that, depending on how it is used, can be very pro-employer and anti-employee.

Some members of Congress believe this is unfair, however. Congressman David N. Cicilline (D-RI) and Senator Richard Blumenthal (D-CT) have introduced the Justice for Servicemembers Act (JSA), which is currently pending before Congress. The proposed Act seeks to amend the USERRA to bar future military discrimination claims from being forced into arbitration.

Arbitration May Not Be a Good Deal for the Service Member

parachuteEmployers are increasingly requiring employees to agree not to go to court and to have any legal claims go to arbitration to obtain or keep their job. Two-thirds of American companies use some kind of mandatory arbitration agreement, according to Congressman Cicilline’s website.

Arbitration is a type of private trial that results in a decision concerning a matter in dispute between the employee and employer. Normally, the employer chooses an arbitrator or a panel of arbitrators who sit as judge and jury. This creates an incentive for arbitrators to decide in the employer’s favor so they can make more money handling future cases for the employer.

Depending on the wording of the agreement, the arbitration process can have some significant drawbacks for employees. In some cases, the employer pays for the arbitration, but in others, the parties could split the costs, or the party losing the case could pay for the arbitration and possibly the fees and costs incurred by the winning party. In some cases, the parties are required to keep their dispute private, so the proceedings cannot be disclosed. The ability of the parties to obtain evidence can be restricted. It can also be very difficult to have such an agreement ruled invalid by a judge or have an arbitration ruling overturned in the court system.

Service Members Can Choose Arbitration, But It Can’t Be Mandated Under the JSA

The JSA would void a mandatory arbitration agreement between an employer and a current or former member of the Armed Forces, but it does not ban arbitration of these types of complaints. It can be used to decide the matter if both parties knowingly and voluntarily consent to arbitration after a complaint has been filed in a court or with the Merit Systems Protection Board.

Currently, the USERRA provides the following:

  • Returning service members are to return to the jobs they would have had if not for their absence serving in the military (the “escalator” principle) with the same seniority, status, pay, and other applicable rights and benefits based on seniority.
  • Employers must make reasonable efforts (like training) to enable returning service members to qualify for re-employment.
  • If a service member does not qualify for an “escalator” position, he or she must be reemployed, if qualified, in any other job that is the most similar to the “escalator” position. If that is impossible, the employer must return the person to his or her pre-active duty position.
  • While performing military service, the person is to be considered on a furlough or leave of absence and is entitled to the same nonseniority rights as similarly situated employees using nonmilitary leaves of absence.

Courts’ Interpretation of USERRA Provision Opens the Door to Mandatory Arbitration

mil3The section of the law that governs arbitration under the USERRA is 38 U.S.C. § 4302. The purpose of this law is to explain that the USERRA supersedes other laws, but that is not how some judges have viewed it. The section states as follows:

(a) Nothing in this chapter shall supersede, nullify or diminish any federal or state law (including any local law or ordinance), 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 for such person in this chapter.

(b) This chapter supersedes any state law (including any local law or ordinance), contract, agreement, policy, plan, practice or other matter that reduces, limits or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or the receipt of any such benefit.

The JSA is meant to reverse court decisions enforcing mandatory arbitration in USERRA cases. The most important decision is from the U.S. Court of Appeals for the Fifth Circuit, Garrett v. Circuit City Stores. The decision is 10 years old but still applicable. The court ruled that despite the clear language that the USERRA supersedes every “contract, agreement, policy, plan, practice or other matter” that may limit USERRA rights, these plaintiffs cannot go to court.

In Garrett, Circuit City sought to dismiss a lawsuit filed by Michael Garrett, a member of the Marine reserves who claimed discrimination due to his military service. The lower court refused, and Circuit City successfully appealed. The appellate court reasoned that the agreement provided that claims concerning termination of employment would be settled by final and binding arbitration, enforceable by and subject to the Federal Arbitration Act (FAA). In a previous case, Gilmer v. Interstate/Johnson Lane Corp., the U.S. Supreme Court ruled that discrimination claims based on statutes can be decided according to an arbitration agreement, enforceable through the FAA. The Supreme Court ruled that there are substantive rights conferred by Congress (like the prohibition of discrimination) that must be preserved even in arbitration, while procedural rights (such as deciding which court to file a lawsuit) can be waived without going against congressional intent. The court found that the USERRA defines “rights and benefits” in a limited way, stating that it includes only substantive rights relating to compensation and working conditions, not a right to a particular forum for dispute resolution, so there’s no right to have a USERRA claim in court.

The JSA would change the USERRA to clarify that a plaintiff would have a right to go to court to resolve the issue.

Summing It Up

If you’re a service member or former service member and feel you’ve been discriminated against because of your service in violation of the USERRA, take the following steps:

  • Find out whether you have signed a mandatory arbitration agreement with your employer.
  • If so, depending on its language, it may or may not apply in your situation.
  • If it does, though it may be difficult, a court may decide that the agreement is invalid.
  • If so, you can go to court. If not, you may need to arbitrate the matter.
  • Whether and how much that process impedes your ability to have your case fairly heard depends on the rules of the arbitration, which can vary.

If you believe your employer has discriminated against you because of your military service or if you cannot get your job back, you may have a claim. At Spiggle Law, we can help. As one of the largest employment law firms in Virginia devoted to representing employees, we have a wealth of experience standing up for and protecting military workers’ rights.

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