Hunton Employment & Labor Perspectives

On August 10, 2021, the Third Circuit in Travers v. Federal Express Corporation revived a class action lawsuit under the Uniformed Services Employment and Reemployment Act of 1994 (“USERRA”), holding that employers must provide servicemembers with pay during military leave when employers pay employees on “comparable types of leave.”

The Third Circuit’s opinion rested on its reading of two provisions of USERRA: Section 4316(b)(1) and Section 4303(2).

Section 4316(b)(1) entitles service members to “rights and benefits [that] are generally provided by the employer . . . to employees having similar seniority, status, and pay who are on furlough or leave of absence under a contract, agreement, policy, practice, or plan  . . .”

Section 4303(2) defines “rights and benefits” broadly to include “the terms, conditions, or privileges of employment, including any advantage, profit, privilege, gain, status, account, or interest (including wages or salary for work performed) that accrues by reason of an employment contract or agreement or an employer policy, plan, or practice and includes rights and benefits under a pension plan, a health plan, an employee stock ownership plan, insurance coverage and awards, bonuses, severance pay, supplemental unemployment benefits, vacations, and the opportunity to select work hours or location of employment.”

The district court had concluded that paid military leave was never required under USERRA because it was not a defined “benefit” or “right” under the statute.  The Third Circuit disagreed and held that “the best reading of USERRA directs employers to provide the benefit of compensation when they choose to pay other employees for comparable forms of leave.”

To that end, the Third Circuit held that “USERRA does not allow employers to treat servicemembers differently by paying employees for some kinds of leave while exempting military service.”  Rather, “USERRA entitles employees taking military leave to the ‘other rights and benefits’ their employers give to employees taking similar kinds of leave,” including pay during leave.

In reaching this conclusion, the Third Circuit rejected the argument that paid military leave was not available because it was not expressly listed in the statute.  The Third Circuit held, instead, that USERRA’s definition of “rights and benefits” was expansive and that the types of benefits listed in the statute were merely illustrative, not exhaustive.

Though the Third Circuit affirmatively held that pay during military leave could be a “benefit” or “right” under the statute when the employer offered paid leave to employees on “comparable types of leave,” the Court did not answer the more difficult question of what constitutes “comparable types of leave.”  The Third Circuit remanded the case to the district court to determine whether the paid sick leave, paid jury duty leave, and paid bereavement leave at issue in the case are “comparable” to military leave.

The Third Circuit’s decision is likely to increase the number of class action lawsuits challenging unpaid military leave policies. Employers should revisit their military leave policies to determine what obligation, if any, they may have to provide paid military leave as a result of their other paid leave policies.