SHOTS FIRED: DIGGING THE UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT OUT OF THE TRENCHES OF ARBITRATION.

AuthorLimb, Lisa
PositionNOTE

The Uniformed Services Employment and Reemployment Rights Act (USERRA) was enacted to protect servicemembers from discrimination by civilian employers and to provide servicemembers with reemployment rights. Recent circuit court decisions, however, have maimed these protections by ruling that mandatory arbitration is permissible under USERRA. This Note argues that such rulings conflict with USERRA's plain language, statutory structure, and purpose. Ultimately, in light of strong public policy considerations, this Note contends that mandatory arbitration should not be permissible under USERRA and proposes that Congress amend the Act to explicitly prohibit arbitration.

TABLE OF CONTENTS INTRODUCTION I. THE FAA UNDERMINES CONGRESS'S INTENT TO PROTECT SERVICEMEMBERS THROUGH USERRA A. USERRA's History and Statutory Construction B. Congress's Intent to Preclude Employment Contracts from the FAA and How the FAA Hurts Public Policy by Disadvantaging Employees II. CIRCUIT COURTS HAVE MISINTERPRETED USERRA A. Pre-Garrett Federal District Court Decisions B. Garrett and Its Progeny C. The Circuit Courts Are Reaching the Wrong Conclusion Due to an Erroneous Reading of USERRA and an Unjustified Disregard for USERRA's Legislative History III. A POSSIBLE REMEDY FOR BINDING ARBITRATION'S THREAT TO NATIONAL DEFENSE A. Military Recruitment and Retention Are Negatively Affected by Forced Arbitration of USERRA Claims B. Counterarguments, Giving Servicemembers the Choice to Arbitrate, and Using a Stop-Gap to Combat Compelled Arbitration CONCLUSION INTRODUCTION

Kevin Ziober recalls texting his family, "What a great sendoff!" after he was presented with cards, balloons, and a gift from his coworkers. (1) Kevin, a lieutenant in the U.S. Navy Reserve, worked as an operations director for BLB Resources (BLB), a real estate firm in California. (2) He was deploying to Afghanistan for a year, so his supervisor and colleagues at BLB threw him a farewell party. (3) But only a few hours after Kevin "dug into a cake decorated with an American flag and the words, 'Best Wishes Kevin' in red, white and blue," (4) he was informed that he was being fired from BLB. (5)

Kevin had served in the Reserves since 2008. (6) In October 2012, he was called to active duty for a deployment to Afghanistan. (7) To give as much advance notice as possible, Kevin notified both his supervisor and human resources director at BLB that he was scheduled to deploy before even receiving his official orders; (8) the Uniformed Services Employment and Reemployment Rights Act (USERRA) required advance notice for Kevin to be guaranteed reemployment by BLB after his deployment. (9) According to BLB, Kevin was fired because BLB did not know how long its federal government contract would continue. (10) And yet, he was the only employee fired for this reason. (11) Now, along with shouldering the responsibilities and stress that accompany a deployment, Kevin had to worry about his employment prospects.

USERRA was designed to shield servicemembers from situations like Kevin's and alleviate concerns about their reemployment. (12) But when Kevin sought to enforce USERRA against BLB, the United States District Court for the Central District of California granted BLB's motion to compel arbitration. (13) Kevin had to sign an arbitration agreement to keep his job. (14) The Ninth Circuit affirmed the district court's decision and held that he had to arbitrate his USERRA claims because Congress did not explicitly manifest its intent in USERRA to prohibit mandatory arbitration. (15) The outcome of Kevin's arbitrated case is unknown, since many arbitration decisions are not published due to their private nature and confidentiality provisions. (16) But because arbitration generally lacks procedural safeguards and because employers have a repeat-player advantage, (17) Kevin was probably not successful in his legitimate claim against BLB.

Unfortunately, this scenario is common for veterans returning home from deployments. (18) When servicemembers are forced to arbitrate, USERRA's antidiscrimination provisions do not provide them with meaningful protection. Deprived of their day in court, the servicemembers may be left without jobs and with little or no recourse against their employers--all because they decided to serve their country. The problem is compounded for military reservists who, unlike their active-duty counterparts, need to pursue full-time civilian careers to supplement their part-time military income. (19) And because reservists can be called to long-term active duty at any time, their military status poses a hurdle in finding civilian employment: employers have few incentives to hire or rehire an employee who may be forced to leave at a moment's notice. (20) If reservists are fortunate enough to find employment, there is still a risk that their employers will terminate them if the reservist is called to active duty. (21)

This Note argues that claims under USERRA should supersede mandatory arbitration clauses. Part I explains how USERRA's history and statutory construction show Congress's intent to provide broad protections to servicemembers. Part II argues that the circuit courts have misinterpreted the statute's text, undermining Congress's intent by subjecting USERRA claims to arbitration under the Federal Arbitration Act (FAA). Part III contends that the recent volley of circuit courts' decisions against servicemembers will have far-reaching public-policy implications that will negatively affect our servicemembers and, ultimately, our national defense capabilities.

  1. THE FAA UNDERMINES CONGRESS'S INTENT TO PROTECT SERVICEMEMBERS THROUGH USERRA

    Since 1940, Congress has continuously expanded and strengthened protections for servicemembers and veterans reentering the civilian workforce after serving our nation. (22) But recently, the Supreme Court has increasingly favored arbitration, (23) and circuit courts have followed this tendency to compel arbitration under USERRA. (24) Section I.A explains how USERRA's history and statutory construction reflect an intent to provide broad protections for servicemembers and impose stringent standards on employers. Section I.B provides a brief background of the FAA and argues that arbitration agreements overwhelmingly favor employers--stripping employees of important legal protections.

    1. USERRA's History and Statutory Construction

      Although USERRA was signed into law in 1994, its history goes back to the Selective Training and Service Act of 1940 (STSA), (25) the first federal statute to provide servicemembers with reemployment rights. (26) In the early 1970s, as conscription was coming to an end, the Department of Defense adopted the "Total Force Policy," which provided that reservists "will be the initial and primary source of personnel to augment the active forces." (27) As the military shifted to an all-volunteer force and "relied to an extraordinary degree" on its reservists, (28) Congress further extended the scope of employment protections by passing USERRA in 1994. (29)

      Congress designed USERRA to accomplish three critical goals: (1) to encourage noncareer military service by "eliminating or minimizing the disadvantages to civilian careers and employment," (2) to provide reemployment rights in order "to minimize the disruption to the lives of' servicemembers, and (3) to prohibit employment discrimination against servicemembers. (30) Congress gave USERRA teeth by including both a "savings" clause and a "nonwaiver" provision: [section] 4302(a) of the statute saves agreements and laws that are "more beneficial" to servicemembers, while [section] 4302(b) is a nonwaiver provision that prevents agreements and laws from reducing, limiting, or eliminating rights provided by the Act. (31)

      When interpreting these provisions, courts have resolved ambiguities in favor of the servicemember, as in Kane v. Town of Sandwich. (32) Timothy Kane served in the Air Force Reserve while employed by the Sandwich Police Department as a police officer. (33) He was repeatedly denied promotions due to his military status. (34) Kane sued Sandwich, asserting discrimination claims under both USERRA and Massachusetts's antidiscrimination statute. (35) Sandwich claimed that the Act preempted Kane's state law claims and that Kane was required to exhaust state administrative remedies before filing his federal USERRA claim. (36) The district court disagreed. It held that state law claims were preserved under USERRA's savings clause (37) but that state laws requiring a servicemember to meet additional prerequisites before filing a USERRA claim were superseded by the Act. (38)

      As discussed in Kane, Congress intended USERRA to "establish[] a floor, not a ceiling, for the employment and reemployment rights and benefits of those it protects" by including both the savings clause and a robust nonwaiver provision. (39) The Senate Veteran Affairs Committee noted that the nonwaiver provision was meant to have an expansive reach: [section] 4302(b) would preempt any state law or contract that would limit USERRA rights or impose any additional prerequisites on the exercise of the Act's rights and benefits. (40) The House Report also emphasized that the nonwaiver provision was meant to "reaffirm" the preemption of any employer agreements that provide fewer rights than USERRA. (41) The House explained that "resort to mechanisms such as ... arbitration ... is not required," and that "any arbitration decision shall not be binding as a matter of law." (42) Despite Congress's clear intent, expressed in both the plain language of the statute and its legislative history, some circuit courts have held that mandatory arbitration of USERRA claims is permissible under the FAA. (43)

    2. Congress's Intent to Preclude Employment Contracts from the FAA and How the FAA Hurts Public Policy by Disadvantaging Employees

      The FAA was passed in 1925 because courts were generally hostile to...

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