Seventh Circuit Holds USERRA Rights and Benefits May Include Paid Leave

On February 3, 2021, the U.S. Court of Appeals for the Seventh Circuit addressed the issue of whether the USERRA requires an employer to provide paid military leave to the same extent that it provides paid leave for other absences. In White v. United Airlines, Inc., No. 19-2546 (7th Cir. 2021), the court held that paid leave fell within the rights and benefits defined by USERRA, reversing the district court’s prior ruling.

Congress passed USERRA in 1994 with the goal of prohibiting civilian employers from discriminating against employees because of their military service. USERRA mandates that employees on military leave be accorded the same non-seniority rights and benefits as employees on comparable, nonmilitary leaves, such as jury duty and sick leave. Although USERRA defines “rights and benefits” broadly, it was unclear whether this language was intended to encompass paid leave. Lower court opinions on this matter have varied; White is the first case to be reviewed on the appellate level.

In White, an airline pilot employed by United Airlines also served in the U.S. Air Force on reserve duty. The reserve duty requires his attendance at periodic military training sessions, for which he took short-term leave that was unpaid by United. However, under United’s collective bargaining agreement, pilots were entitled to pay for other types of short-term leave, including sick leave and jury duty. Additionally, United sponsored a profit-sharing plan that provided credits based upon the pilots’ wages; accordingly, pilots did not receive credits for military leave periods.

In the class action suit, White alleged that United’s failure to provide the paid leave and profit-sharing plan credit to reservists on military leave was a denial of “rights and benefits” in violation of USERRA. The complaint was dismissed by the district court, which held that interpreting USERRA to require paid leave would create a burden on employers not envisioned by Congress. Additionally, in the district court’s view, jury duty and sick leave were not comparable to short-term military leave for purposes of determining any entitlement to rights and benefits under USERRA because the military leave was voluntary.

The Seventh Circuit reversed, holding that employees on military leave must be given the same rights and benefits as comparable employees taking nonmilitary leave, with paid leave falling within such rights and benefits encompassed by USERRA. In an opinion largely focused upon statutory language, the court observed that USERRA’s definition of “rights and benefits” captures all “terms, conditions, or privileges,” of employment, with no express limitations. Therefore, an employer’s policy of paying employees during a leave of absence is such a term, condition or privilege of employment. The court rejected United’s position that USERRA limited rights and benefits to work performed for the employer. The court also dismissed United’s arguments that requiring payment of wages and benefits for military leave would result in increased payroll costs, noting that USERRA does not specify how generous an employer’s paid leave policy must be; it only requires equitable treatment for military leave.

As a result, the class action suit for paid leave and related profit-sharing credits was remanded back to the lower court for determination of whether the military leave was comparable to other types of employer-provided paid leave. For purposes of this assessment, the district court was directed to focus upon the leave duration, giving consideration to the leave’s purpose and the employee’s ability to control the leave timing (as opposed to the voluntary nature of the leave).

Employers should be aware of this holding and understand that short-term paid military leave may be required under USERRA, if paid leave is provided for comparable non-military absences. Employers, particularly those with reservist workforces within the Seventh Circuit’s jurisdiction, may want to review their military leave policies with counsel to determine if changes are advisable following this decision.

White v. United Airlines, Inc. »