Q. Can we rely on a release of all employment claims when terminating a military service member or veteran?
A. The law is unclear on this point. By way of background, the Uniformed Services Employment and Reemployment Rights Act (USERRA) protects civilian job rights and benefits for veterans and both active and inactive members of Reserve components and other uniformed services.
When, however, you want to limit your legal exposure in terminating a service member, the law creates some troubling ambiguity. An employer will typically seek a separation agreement that provides special compensation to the terminated employee in exchange for the employee’s agreement to release the employer from potential claims.
Often, such separation agreements cover a gamut of state and federal employment laws.
Two potentially conflicting principles come into play in relation to such agreements. USERRA cannot override any agreement that gives an employee more rights than the law provides. At the same time, an employer cannot refuse to provide any right or benefit USERRA guarantees.
The few courts that have considered whether a service member can waive his rights under USERRA have reached differing conclusions based on those two principles.
For example, a California state court ruled in 2007 that an employer could not rely on a broad release when a Marine Corps reservist later sued forand breach of contract. But a federal appeals court in 2010 reached the opposite conclusion, holding that an employee’s agreement to release claims was valid where the employee thought that his severance payment was more valuable than what he could have obtained under USERRA.
While this issue is unlikely to be definitively resolved anytime soon, employers can best protect themselves by making sure their releases clearly cover claims based on USERRA or “veteran status,” provide valuable consideration, remind employees they can consult a lawyer and give them ample time for review.