These days, it’s pretty common for employers to lose employees temporarily because they have been called to military service. That can be disruptive—just as it can when the service member returns, looking to get back his old job.
Under the Uniformed Services Employment and Reemployment Rights Act (USERRA), employees called up to serve our country are entitled to prompt reinstatement. Your obligation is triggered when the returning service member tells you he is ready to return.
It’s not enough to place the returning worker in an entry-level position. USERRA contains a provision that says returning service members are entitled to reinstatement to the same position or one similar to the job they previously held, taking into account any promotions or other benefits they would have earned had their employment not been interrupted.
As the following case shows, that may include commission earnings, which must be based on the commission they received before military service.
Recent case: Michael Serricchio was a Wachovia financial advisor who was also a member of the Air Force Reserve. In the wake of the Sept. 11 terrorist attacks, he was called to active duty.
When his service ended, he contacted Wachovia right away, requesting reinstatement. The financial company waited four months before offering him a position, and then put him back into a beginning financial advisor position, where he was expected to build an entirely new book of business before he could earn commissions.
He sued, alleging that his compensation should have been based on his sales prior to leaving for active duty.
Because other advisors had served Serricchio’s clients while he was gone, and because those advisors left (taking clients with them) while Serricchio was still on active duty, Wachovia argued that it shouldn’t have to pay him based on those client accounts.
A jury disagreed, buying Serricchio’s argument that he should have been given a client list with a total investment value equivalent to the one he had before leaving. It awarded him more than $300,000 in unpaid commissions, and the judge doubled that amount as additional damages.
Wachovia appealed, but the 2nd Circuit Court of Appeals said the lower court was right. When it comes to compensation, retirement and other benefits, it said returning service members should be treated as if they had never left. (Serricchio v. Wachovia, No. 10-1590, 2nd Cir., 2011)
Final notes: Expect more claims for reinstatement as the drawdown of military forces in Iraq and Afghanistan continues.
Because the unemployment rate remains high, many returning service members may want their old jobs back, instead of looking for new ones. Some returning veterans may now suffer from disabilities such as post-traumatic stress disorder or other injuries. Together, those two factors could create potent potential for litigation.
What is unclear is what obligation employers have when a service member cannot do his or her former job even with a reasonable accommodation. This is an area where you should immediately seek expert legal advice. Remember that your USERRA reinstatement obligation is for “prompt” reinstatement. Even a few weeks or a month of delay may mean a hefty jury award.
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