Suits In The WorkPlace

Military Leave Mishandled

    We're seeing a lot of commentary about USERRA in the press these days, and not just on the employment law list serves and blogs.  NPR actually ran a story on it over Memorial Day weekend, and if it made it to NPR, then the odds are that service member's employment rights are going to get a lot more attention from the mainstream media (which seem to run in tandem with NPR on a lot of stories).

     And with cases like this, who can blame the press?  For some inexplicable reason, Pepsi front-line managers decided to begin penalizing one of their employees shortly after he began military service with the Army Reserve.  Specifically, the employee was tagged with his first attendance discipline shortly after he returned from his initial active-duty training in the summer of 2002.  He was hit for three separate actions, several of which Pepsi actually documented as related to his military duties. 

     One more time—it is absolute foolishness to reference someone's protected status in a disciplinary memo or letter of reprimand.  This case just drives that point home, again.

     The employee received attendance points for failing to call in on a designated hotline (a policy which was instituted while he was on active duty and that was never communicated to him) and for missing work after the Army ordered him to report for possible deployment in less than 24 hours.  He was also tagged for leaving work 15 to 20 minutes early to prepare for military-related duties.  Notwithstanding the employee's efforts to resolve these matters, Pepsi allowed the points to stay in his record and never responded to his questions or grievances filed through his union.     

      When the employee threatened to make a public complaint about Pepsi's treatment of service members, the company finally set up a meeting with the human resources management team.  At the meeting, one of the HR managers conceded that the attendance points in the employee's record should be removed.  The employee also raised a question about his entitlement to so-called “bridge pay” under Pepsi's military leave policy.  Under this policy, Pepsi paid compensation designed to make up any pay differential for a period after the employee’s recall to active duty.  Of course, Pepsi had not provided this compensation to the employee, a point that was clear at the meeting.  In fact, the HR manager committed to compensate the employee for the money that Pepsi should have paid during his absences for active duty initial training.

     Pepsi actually deposited more than $10,000 into the employee's bank account after the employee withdrew his complaint of USERRA violations at the Department of Labor.  Inexplicably, Pepsi then took back the amount four days later. 

     At trial for violation of USERRA, as well as for breach of contract and conversion (owing to the failure to pay the so-called bridge pay, and the removal of it after it had been deposited in the employee's bank account), Pepsi tried to argue that the policy for bridge pay was, in fact, only a "draft".  The company also had to explain why its counsel represented that no money had either gone into or come out of the employee's bank account, a clear mistake by the attorney.  The trial judge had little difficulty disbelieving Pepsi’s explanations as to what happened. 

     Pepsi was hit with the $10,000-plus payment, and the court then doubled the actual damages because it found the employer's failure to comply with the provisions of USERRA to be "willful".  The court also determined that Pepsi breached its oral contract with the employee by failing to pay the differential pay (based on the oral statements of the human resources manager that the company would, in fact, pay the employee that amount), as well as upholding the conversion claim.  Finally, the court tacked on an additional $50K in punitive damages on the conversion count.

     Employers, by now, should be particularly sensitized to the difficult attendance issues that roil around a USERRA claim.  In this case, there was very little coordination between the front-line managers, Pepsi human resources managers and, I'm guessing, senior management.  The end result was a mangled decision-making process that actually multiplied the claims against the company, even well after the violation of USERRA was established.

     In short, a USERRA claim should be treated like any other complicated leave of absence issue.  Coordination between the management, human resources, and the legal team is essential so that the kind of false steps that developed here aren't repeated.