Anchors Away, Leave for Reservists With Pay?

Elizabeth Chilcoat

Since 1940, the United States has provided some form of job protection to civilian employees who also serve their country as members of the military. Most recently, in 1994, Congress enacted the Uniformed Services Reemployment Rights Act of 1994 (“USERRA”). Among other things, USERRA requires employers to provide employees on military leave with the same benefits it offers to employees on comparable non-military leaves of absence and furloughs.

Gerard Travers, a member of the U.S. Naval Reserve, challenged FedEx’s practice of providing unpaid leave for military service while providing paid leave for jury duty, sickness, and bereavement leave. After the U.S. District Court for the Eastern District of Pennsylvania dismissed his claim, Travers appealed to the U.S. Court of Appeals for the Third Circuit. In Travers v. Federal Express Corporation, the Third Circuit agreed that Travers had adequately pled a claim that FedEx had violated its obligations under USERRA by not paying him for military leave.

The Third Circuit reasoned that USERRA requires an employer to treat members of “Group 1,” who take leave for military service, the same as members of “Group 2,” who take leave for any other reason. So long as the leaves are comparable in terms of duration, purpose, and the employee’s ability to choose when to take leave, the employer is obligated to provide the same “benefits” to members of Group 1 as it provides to members of Group 2. Significantly, the Third Circuit held that payment while on leave is a benefit. In doing so, the Third Circuit joined the Seventh Circuit, which reached a similar conclusion earlier this year.

The Third Circuit left open two important questions. First, the Third Circuit left the question of whether jury duty, sick, and bereavement leave are “comparable” to military leave to the trial court. Second, although the Third Circuit appeared to recognize that continuation of health insurance is also a “benefit” under USERRA, it did not address whether employers who have maintained health insurance benefits for employees during lengthy pandemic-induced furloughs will now be required to continue health insurance benefits for employees on extended military leaves.

Any time an employee requests or takes leave for military service, employers should carefully consider whether the employee should be paid for their time away from work, as well as whether the employee is entitled to receive other benefits while on leave (e.g., bonuses, commissions, etc.). This requires a thoughtful review of the circumstances surrounding the leave in question and how closely they align, applying the relevant factors, to circumstances under which the employer otherwise pays employees while out on leave.