Employer Not Obligated to Rehire Poor-Performing Worker Under USERRA: Court

An employer is not obligated under the Uniformed Services Employment and Reemployment Rights Act to rehire a returning veteran with a poor work performance who was terminated as part of a reduction in force, said an appellate court Dec. 5.

According to the ruling by the 8th U.S. Circuit Court of Appeals in St. Louis in Douglas Milhauser v. Minco Products Inc., Milhauser, a maintenance technician whose work performance was considered to be “inconsistent and sometimes poor,” was included among those terminated as part of a reduction in force at his Fridley, Minnesota-based firm. As a result, he was dismissed when he reported for work after his military service had concluded in June 2009.

Milhauser sued, charging the company with discrimination on the basis of military service and with failure to provide re-employment as required by USERRA. A jury ruled in Minco’s favor on both counts, and Milhauser appealed on the USERRA issue.

The appellate court said under USERRA, employees returning from military leave must be re-employed in the “position of employment in which they would have been employed” had their continuous employment not been interrupted by military service, which is known as the escalator principle.

“Milhauser asserts that termination cannot be a ‘position of employment’ under USERRA,” said the appellate court.

But a three-judge panel disagreed: “The jury’s finding that Milhauser’ s position of employment would have been termination had he not left for military service is entirely consistent with USERRA’s text and its implementing regulations,” said the court, in affirming the lower court’s judgment.”

“The Secretary of Labor’s regulations on USERRA confirm that the escalator principle may properly be applied to result in an employee’s termination … We accord considerable deference to the Secretary’s interpretation” because she is charged with implementing USERRA’s provisions, said the court, which also stated other courts’ rulings agree.

Experts have said complying with the broadly worded USERRA can be a challenge for employers.

Judy Greenwald writes for Business Insurance, a sister publication of Workforce Management. Comment below or email editors@workforce.com.

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