You’re Damned if You Don’t Understand Your Obligations to Employees or Returning Employees who Are Military Veterans or in the National Guard or Reserve.

Posted: July 8, 2011 in Discrimination, Hiring and Firing, Lawsuits

Failure to meet your obligations could cost your company dearly. How dearly? Is $1 million dearly enough for you? That’s what I estimate it will cost one Massachusetts company, in the recent case described below.

The Federal Uniformed Services Employment and Reemployment Rights Act (“USERRA”), which augments the Veteran’s Reemployment Rights Act (“VRR”), provides for broad protections to military and reserve personnel with respect to civilian job rights and benefits. The entire scope of protections is beyond the scope of this article, which merely scratches the surface of the statutory considerations.

One basic protection is that an employee called to active duty cannot lose their job. In general, an employee may be eligible for reemployment rights even if absent from work for military duty for up to five years, with some exceptions. The statutes also require employers to make reasonable accommodations to disabled veterans, including up to two years time off for convalescence. USERRA provides that the returning employee must be provided the same status, pay and seniority he would have achieved had he not been absent for military service (the so-called “escalator” requirement). USERRA also prohibits discrimination against employees based on military service. Massachusetts anti-discrimination statute, Chapter 151B, also provides that it is unlawful for an employer to deny employment, reemployment, retention, promotion or any benefit of employment to any employee who is a member of or applies to the military or national guard. Violations of these statutes can result in significant damages, as will be seen from the attached case report.
Fryer v. A.S.A.P.

The attached case report, Fryer v. A.S.A.P. Fire and Safety Corp., provides a cautionary tale for employers. The employer had its rear end handed to it at trial and in post-trial motions. The best I can calculate, the total awarded to the plaintiff former employee, including interest and an award of attorneys’ fees, amounted to somewhere north of $800,000, with interest and attorneys fees continuing to accrue while the matter is on appeal (unless the employer wins the appeal, which I doubt will happen).

Fryer was employed at ASAP working on sprinkler systems and the sales and service of systems. He received a modest base pay plus commissions on sales, a company vehicle and other benefits. He loved his job and was very good at it.

In 2007, out of a sense of duty as well as for certain benefits, Fryer reenlisted in the Massachusetts National Guard. His expectation was that it would involve weekends, but would not interfere with his employment. However, he was unexpectedly deployed to Iraq.

Inexplicably, according to the Court’s findings, ASAP then slowed or withheld payments of commissions owed to Fryer. Fryer expected that ASAP would pay the overdue commissions to his wife, who remained home with the children, but ASAP failed to do so (this resulted in a small part of the award being tripled, as it was a violation of the Massachusetts Wage Act). Fryer expected to return to ASAP, and left his tools there.

Fryer kept in touch with ASAP while on active duty in Iraq. In 2008, he arrived home “positive, upbeat and very excited to be back.” Fryer promptly went to ASAP and stated that he was available to start work almost immediately. However, ASAP told him that there were no open positions, even though it had purchased another sprinkler company. ASAP had hired another employee in Fryer’s stead, but that is not a defense under USERRA. The regulations provide a right to reinstatement, even if reemployment might require the termination of a replacement employee.

After contacting government officials, Fryer sent ASAP a certified letter formally requesting reinstatement. ASAP eventually gave in and instructed Fryer to report to work in 2008. The supervisor told Fryer that ASAP had to give him a job, implying that it was only doing it because it had to do so. The job was not an “escalator” position, but a lesser position as a sprinkler’s helper. The position did not offer a reasonable opportunity to make commissioned sales, and did not offer a company vehicle or gas card.

A few months later, ASAP terminated Fryer, purportedly for being late for work twice and calling in sick three times, all within a thirty day period. Fryer was shocked, and later suffered depression and other emotional difficulties. Fryer sued, and proved at trial that these reasons were a pretext, “with the real reason being plaintiff’s military service and his complaints about not having the benefits and responsibilities of his preservice position.” The facts for the pretext are set forth in the decision.

The jury hammered ASAP and its owners personally, finding them liable for discrimination. The jury awarded $289,000 in emotional distress damages, back pay and front pay of nearly $150,000, and various smaller amounts that were trebled. Attorneys’ fees and interest were later added by the Court, nearly $200,000 in attorney’s fees and $100,000 in total interest. Based on my calculations, if Fryer prevails on appeal, the total calculations could be over $900,000 if more attorneys’ fees and interest are added. That’s before considering ASAP’s own attorneys’ fees and costs, which one assumes has to be well over $100,000, making the total exposure over $1 million.

Don’t make a $1 million mistake for your company if you could avoid it for small dollars with a consultation with a knowledgeable employment lawyer. While this case presents an extreme example, even well-intended mistakes could subject your company to significant exposure.

As stated above, the protections under these statutes are complex and detailed. The above is merely a small amount of general information. If your company has questions on how to make sure it complies with these statutes, give me a call at 617.338.7000.

By Adam P. Whitney

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