February 6 Tip of the Week

“Details Matter…”

A recent Ninth Circuit court decision overruling a determination by a lower court is a cautionary tale to employers regarding their treatment of employees who are on military leave.  This class action lawsuit arose out of a claim of discrimination filed by pilots for Alaska and Hawaii airlines.  Pilots who took short-term military leaves of absences alleged that their employers discriminated against them under the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) when it failed to pay them for time that they had to take off of work for short term military leaves.  The basis for the pilots’ argument was that other employees who were on similar short-term leaves for other reasons, such as sickness, vacation, and other non-military reasons were paid while on such leave and they were not. 

Under USERRA, an employer is required to provide employees who are on military leave with the same benefits that are available to employees on other types of leave.  The regulations regarding the implementation of USERRA state that the “non-seniority rights and benefits to which an employee is entitled during a period of service are those that the employer provides to similarly situated employees by an employment contract, agreement, policy, practice, or plan in effect at the employee’s workplace,” 20 C.F.R. § 1002.150(a). The regulation further states that if the benefits vary according to the type of leave, the employee must be given “the most favorable treatment accorded to any comparable form of leave when he or she performs service in the uniformed services,” 20 C.F.R. § 1002.150(b).

The airlines filed a motion for summary judgment in the district court, which was granted.  In granting the employer’s summary judgment motion, the lower court applied the Department of Labor’s comparability test.  Under that test, three factors must be considered when determining whether military leave is comparable to other forms of leave and must be treated the same.  These comparability factors are:  (1) the duration of the leave; (2) the purpose of the leave; and (3) whether the employee has the ability to choose when to take the leave.  See, 20 C.F.R. § 1002.150(b). 

In support of their motion for summary judgment, the airlines took a sweeping approach to defining the types of military leave taken by their pilots.  Under this broad approach, the length of leaves, the voluntary nature of the leave and the purpose of the leave varied greatly and created an unfavorable comparison to other types of paid leave, such as vacation and sickness.  In overruling the lower court’s decision to grant summary judgment to the airlines, the Ninth Circuit stated that a ”categorical comparison of all military leaves” was inappropriate and so broad as to negate the protections contained in the law.  The Ninth Circuit found that the court’s application of the broad comparison of all military leaves to other paid short term leaves was in direct violation of the requirement that employee’s receive the “most favorable treatment” when determining equal treatment.  The Ninth Circuit overruled the decision granting summary judgment and stated that the analysis of the comparability factors had to be conducted on the basis of military leaves of a similar length as other forms of leave.  The Ninth Circuit also noted that the comparison analysis was a question of fact that had to be submitted to a jury and that the lower court erred by acting as a factfinder when granting the airlines motion for summary judgment.    

What does this mean for employers in a larger sense?  Initially, this decision is another example of the complexity of an employer’s compliance responsibilities.  There are a myriad of employment laws that employers must obey and each law has its own implementing rules and regulations that must be considered when determining what constitutes compliance.  This decision, which was more employee-friendly and was supported by the most favorable language in the regulations, is a cautionary tale for employers who want to take a hardline when complying with employment laws.  Employers who are looking for loopholes or, as in this case, are reading certain regulations expansively and in a way that denies employees the protections of the law, will have a harder time winning those cases.  We know this to be true in certain circuits or areas of the country, but it is also true where the regulations implementing certain employment laws requires an interpretation that is most favorable to the employee. 

The lessons of this case are another reminder of the importance of having fair, legally compliant, and comprehensive employer policies in place.  These policies should be contained in employee handbooks that are widely disseminated among employees and updated on annual basis.  The law changes on a regular basis and the interpretation of existing laws also changes.  It is important for employers to review their policies and practices to ensure that they are up to date and reflect the current legal landscape and are consistent with the regulations that accompany each employment law.  myHRcounsel assists employers in this endeavor by providing legally compliant employee handbooks and by working with employers to effectively address difficult employee issues that can lead to employee complaints and legal action.