Question of Employment Benefits under USERRA Precluded Summary Judgment: Eighth Circuit | Practical Law

Question of Employment Benefits under USERRA Precluded Summary Judgment: Eighth Circuit | Practical Law

In Dorris v. TXD Services, LP, the US Court of Appeals for the Eighth Circuit held that under Sections 4311(a) and 4316(b)(1) of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), whether an employee deployed on active duty was denied a benefit of employment when his employer did not include him on a list of current employees and whether the employer treated military leave differently from non-military leave were disputed issues of material fact precluding summary judgment.

Question of Employment Benefits under USERRA Precluded Summary Judgment: Eighth Circuit

by Practical Law Labor & Employment
Published on 03 Mar 2014 • USA (National/Federal)
In Dorris v. TXD Services, LP, the US Court of Appeals for the Eighth Circuit held that under Sections 4311(a) and 4316(b)(1) of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), whether an employee deployed on active duty was denied a benefit of employment when his employer did not include him on a list of current employees and whether the employer treated military leave differently from non-military leave were disputed issues of material fact precluding summary judgment.
On February 27, 2014, in Dorris v. TXD Services, LP, the US Court of Appeals for the Eighth Circuit held that under Sections 4311(a) and 4316(b)(1) of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), whether an employee deployed on active duty was denied a benefit of employment when his employer did not include him on a list of current employees during an asset sale and whether the employer treated military leave differently from non-military leave were disputed issues of material fact precluding summary judgment (12-3096, (8th Cir. Feb. 27, 2014)).

Background

Jonathan Dorris began working for TXD Services, LP (TXD) in early 2007. In April 2007 he received Warning Orders that he would be mobilized within six months to serve in Iraq. At this time, he informed his supervisors and the TXD human resources department. Dorris worked for TXD until September 2007, and then reported for military training on October 1. He served on active duty in Iraq for 12 months beginning January 2008.
In October 2007, TXD informed Dorris that he had been terminated for failing to show up to work. In February 2008, TXD sold substantially all of its assets to Foxxe Energy Holdings, LLC (Foxxe). Foxxe took over TXD's operations without disruption. The sale contract:
  • Included as an exhibit a listing of all equipment operators currently employed by TXD (asset sale list).
  • Provided that Foxxe "will use reasonable efforts to offer employment.... to those individuals listed."
TXD did not include Dorris on the asset sale list. When Dorris returned to the US on temporary leave in August 2008 he learned that Foxxe hired all of TXD's employees. The Army wrote a letter to Foxxe stating that "had there been no change of hands between organizations, SGT Dorris would have been entitled to reemployment due to wrongful termination." Dorris returned to the US in December 2008 and sought reemployment. In April 2009 he was hired by Foxxe to the same position he had held at TXD.
In November 2010, Dorris filed this lawsuit alleging that TXD violated his rights under USERRA by firing him while he was deployed on active duty. TXD moved for summary judgment, arguing that Dorris has no claim that TXD violated 38 U.S.C. § 4312 when he was denied reemployment in December 2008 because TXD had been out of business for ten months. Therefore, the employer's circumstances had changed so much that reemployment was impossible. Dorris filed a brief opposing summary judgment, stating that TXD had failed to understand that he was bringing a discrimination claim under 38 U.S.C § 4311, not a failure to reinstate claim. The district court granted summary judgment on any claim that TXD violated its reemployment duty under Section 4312 by firing Dorris and therefore not including his name on the asset sale list. The district court acknowledged that it was a disputed issue of fact whether Dorris quit or was fired in October 2007, but concluded that this issue did not control whether Dorris was included on the asset sale list and granted TXD's summary judgment motion.
Dorris appealed to the Eighth Circuit arguing that the grant of summary judgment must be reversed because there was sufficient evidence for a reasonable jury to find that his military service was a motivating factor in TXD's decision to terminate him.

Outcome

Noting that the pertinent issue in this case is whether TXD violated its USERRA obligations to Dorris while he was on leave by not including him on the asset sale list, the Eighth Circuit held that:
  • Whether Dorris was denied a benefit of employment when TXD did not include him on the asset sale list was a disputed issue of material fact precluding summary judgment.
  • Whether TXD treated military leave differently from non-military leave was a disputed issue of material fact precluding summary judgment.
The Eighth Circuit found that:
  • Considering the question of whether being placed on the asset sale list was a "benefit not determined by seniority" of Dorris' employment with TXD, it is a logical argument but not an assertion of undisputed fact that:
    • being on the asset sale list was not an employment benefit; and
    • Dorris was not eligible to be on the asset sale list because he was not a current or active employee at the time Foxxe took over TXD's operations.
  • Sections 4311(a) and 4316(b)(1) explicitly protect employment benefits that USERRA defines broadly. Applying this broad definition, a reasonable jury could easily find that the opportunity for a seamless transfer of employment to a successor employer was a "benefit" of TXD employment. Further, Dorris provided evidence that most TXD employees were hired by Foxxe following the asset sale, suggesting that being on the asset sale list provided employees a meaningful benefit of employment.
  • Sections 4311(a) and 4316(b)(1) of USERRA require employers, in connection with benefits not determined by seniority, to treat employees taking military leave equally, but not preferentially, in relation to equal employees taking comparable non-military leave generally provided under the employer's policy.

Practical Implications

To avoid similar litigation, employers are advised to draft and maintain a military service leave policy that clearly sets out and determines compensation and benefits during military service leave. For more information, see Military Service Leave: Best Practices Checklist. For a model policy, see Standard Document, Military Service Leave Policy.