One U.S. Court of Appeal assuaged employer’s concerns when it held that an employer had “reasonable cause” to terminate an employee who violated the employer’s job abandonment policy. In so holding the Court found there was no evidence that the employer’s reason for terminating the employee was unlawfully motivated by the employee’s previous extended military leave.

In the case of To v. U.S. Bancorp, Jordan To (“To”) was an employee of U.S. Bancorp (“U.S. Bank”) when he received orders to attend training with the National Guard for 103 days.  On the day To was due to return, August 4, 2008, To called-in sick and was told to provide a doctor’s note.

For the next three work days, To called each day and spoke to his supervisor indicating he was still sick.  To later produced a doctor’s note indicating he could not return to work until August 11.  To did not report to work on August 11, but called his supervisor and said he was ill.  To’s doctor sent a note to U.S. Bank stating that To would be out until August 18.  To did not show for work on August 18, 19, and 20 and did not call any supervisor.  To claimed that his doctor was supposed to fax a note keeping him out for another week to U.S. Bank, but U.S. Bank denied ever receiving the note.

U.S. Bank had an employee manual which required employees to report every day of absence to his or her supervisor and that notifying HR or leaving messages were not sufficient.  U.S. Bank also had a job abandonment policy that stated that any employee who remained absent for two consecutive work days without reporting the absence to the supervisor, absent extenuating circumstances, was assumed to have voluntarily abandoned their job.  The manual was given to each employee and available on U.S. Bank’s intranet.

On August 20, U.S. Bank mailed a letter to To stating he was terminated for job abandonment.  To called HR a few days later and stated his doctor was supposed to send a note to them for the week of August 15th. HR asked To to send them the note and it would “reevaluate his situation.”  To failed to do so.  To filed an action against U.S. Bank for, among other things, termination in violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA).  The trial court granted summary judgment in favor of U.S. Bank.  To appealed and the Eighth Circuit Court of Appeal affirmed.

The Court held that U.S. Bank’s decision to fire To was reasonable as a matter of law because To violated a clear written company policy by failing to properly report his absences.  Even if U.S. Bank had received the note from To’s doctor, To still failed to call-in to his supervisor everyday.  To argued that when HR indicated it would “reevaluate the situation,” if To sent them the doctor’s note for the week of August 15th after To’s termination, U.S. Bank effectively waived its policy that To must call-in to his supervisor everyday.  The Court did not buy it.

“Under To’s logic, U.S. Bank would forfeit its right to rely on written policies by being willing to occasionally forgive violation of those polices in the face of extenuating circumstances…We decline to establish a rule that would penalize an employer…for providing a contextual reevaluation of a termination decision that was, regardless of context, clearly authorized by company policy.”

To also had notice that he could be terminated for job abandonment as evidenced by U.S. Bank’s employee handbook which was given to To and accesable on the intranet.  Moreover it was evident To was aware of these policies when he called into his supervisor the first two weeks of his absences.

Further, the Court held there was no indication that U.S. Bank’s decision to terminate To for violation of company policy was a pretext for terminating To for his previous military leave. 

Unlike U.S. Bank, public employers must provide notice and an opportunity to be heard (i.e. Skelly) to “regular” or “permanent” employees as defined by the employer’s rules before those permanent employees may be terminated for job abandonment.  In all other respects, this case has equal application to public employers and gives us three important rules to follow when it comes to employees who may be disciplined following a protected military leave of absence.

First, employers must have “reasonable cause” to terminate an employee, including at-will and probationary employees, if that employee was reemployed following military leave within the last 180 days before termination if the military leave was between 30 and 180 days in length. If the military leave was for more than 180 days, the employer must have “reasonable cause” for the employee’s termination for one year after the date of reemployment from military leave.

Second, reasonable cause can be satisfied where the employee’s conduct violates clear written employer policies.  For this reason, it is important for employers to maintain written personnel rules and policies and to update those policies regularly.  Now may be a good time to conduct a personnel rules audit.

Third, reasonable cause is satisfied if the employee was on notice that he or she could be terminated for the conduct at issue. Employers must ensure that employees receive policy handbooks when they are first employed and after each time the handbook is updated.  It is also a good practice to maintain personnel rules and policies on the employer’s website or intranet where they are readily accessible.

This is the second installment of a 2-part series on military leave law.  Part 1 discussed basic principles.  This installment explains why the position to which a returning veteran is reinstated depends on whether advancement in that particular job classification is based on seniority or merit.

Reinstatement: Which Position?

USERRA provides that returning service members are to be reemployed in the job that they would have attained had they not been absent for military service, with the same seniority, status and pay, as well as other rights and benefits determined by seniority.  This policy is known as the "escalator" principle, a term coined by the U.S. Supreme Court in 1946 in Fishgold v. Sullivan Drydock Repair Corp.   

The escalator principle provides that the returning service member is not reinstated at the point where he or she got off the escalator to take military leave, but rather higher up, as if the person had never gotten off.  The escalator principle is most easily applied where promotion depends solely on seniority, or longevity on the job.  In those instances, invariably the returning service member is reinstated as if he or she had stayed on the escalator.

No doubt the escalator principle is a key concept in determining where a veteran is reinstated, but what if advancement in a particular job classification is not based solely on seniority, but rather is discretionary and dependent on meritorious job performance, e.g., promotion of a public safety officer?  In this situation, does the escalator principle require an employer to reinstate the returning service member at a rank higher than the one held when military leave commenced? 

According to the Supreme Court, the short answer is, no.  “A veteran is not entitled to demand that he be assigned a position higher than he formerly held when promotion to such a position depends, not simply on seniority or some other form of automatic progression, but on the exercise of discretion on the part of the employer.”  U.S. Department of Labor regulations are in agreement: the returning service member is entitled to reinstatement at a higher rank only if it is “reasonably certain” that, had the person remained continuously employed (stayed on the escalator), he or she would have been promoted.  

In determining “reasonable certainty,” of overriding importance is the existence of a defined, well-established policy regarding discretionary promotions.  Equally important is the employer’s consistent adherence to the policy.  A policy that is not followed regularly is of little help to an employer in a dispute over reinstatement.

Bear in mind that the escalator does not always move upward.  Unfavorable business conditions may cause the escalator to shift into reverse, resulting in reinstatement at a lower level than the one previously held, a different job, or conceivably a layoff.  

This guest post was authored by Timothy Owen

When Johnny comes marching home again,

Hurrah! Hurrah!

We'll give him a hearty welcome then

Hurrah! Hurrah!

This is part 1 of a 2-part series.  Part 1 discusses basic aspects of military leave law.  Part 2 focuses on the “escalator principle” and selecting the right position for a returning veteran.

Federal, state, and even local laws guarantee returning veterans job reinstatement and other employment rights and benefits.  In most instances, the law spells out the position to which a qualifying veteran should be reinstated, making the employer’s decision relatively easy.  There are job classifications, though, that do not lend themselves to an easy determination regarding reinstatement, typically classifications where advancement is discretionary and depends on a formal evaluation of job performance, such as law enforcement.

The public policy behind military leave law seeks to ensure that a veteran returning from military duty is not disadvantaged in the civilian workplace as a result of taking military leave.  This is accomplished by guaranteeing reemployment for the veteran.  The law covers persons who perform duty, voluntarily or involuntarily, in the "uniformed services," which include the Army, Navy, Marine Corps, Air Force, Coast Guard, and Public Health Service commissioned corps, as well as the reserve components of each of these services.  

The federal military leave statute, USERRA, covers nearly all employees, including part-time and probationary employees, and applies to virtually all U.S. employers, regardless of size.  An employer must reinstate service members returning from service in the uniformed services who meet five criteria:

1. The person was absent because of military service;
2. The person gave advance notice of taking military leave;
3. The person took no more than 5 years of military service leave, cumulatively, while employed by the employer;
4. The person was honorably released from military service; and
5. The person reported back to the civilian job in a timely manner.  

Seniority, Rights, and Benefits:  Generally, reemployed service members are entitled to the seniority, and all rights and benefits based on seniority, that they would have attained with reasonable certainty had they remained continuously employed. Service members must be treated as if they are on a leave of absence, and are entitled to rights and benefits not based on seniority that are available to employees on nonmilitary leaves of absence. 

Salary:  Under California’s Military & Veterans Code, public employees employed for a period of “not less than one year” are entitled to pay for the first 30 days of military leave.  A National Guard member on active duty is entitled to receive his or her salary for the first 30 days regardless of his or her length of service with the public employer.  Private employees are entitled to a temporary leave of absence not to exceed 17 days, without pay, for military training.

Pension Rights:  A returning veteran is treated as not having incurred a break in service with the employer maintaining a pension plan.  The employer is liable for funding plan contributions.

Health Coverage:  An employee on military leave for less than 31 days may not be required to pay more than the employee’s share, if any, for health insurance coverage.  For longer periods, the employer is not required to provide health insurance benefits, but must give the employee the option to continue coverage.

Sick Leave and Vacation Accrual: Subject to an employer’s own policies, public employees on active duty are not entitled to sick leave or vacation accrual.  Under certain conditions, employees on temporary military leave continue to accrue the same vacation, sick leave, and holiday privileges for up to a maximum period of 180 days.  There are special rules for National Guard members.

The next installment in this series will address reinstatement of a returning veteran.