Sixth Circuit Holds That An Employee Can Waive USERRA Claims
The Court of Appeals for the Sixth Circuit recently held that an employee can waive claims under the Uniform Services Employment And Reemployment Rights Act ("USERRA") by signing a general release. Wysocki v. International Business Machine Corporation d/b/a IBM, Inc., ___ F.3d ___, No. 09-5161 (6th Cir.).
After returning from a tour of duty in Afghanistan, the plaintiff sought retraining for and reinstatement to his pre-leave position at IBM. IBM refused the request for retraining, but did reinstate the plaintiff; however, within four months, IBM terminated the plaintiff's employment. On the day of his termination, IBM offered the plaintiff severance in exchange for signing a general release of all claims. The plaintiff accepted more than $6,000 in severance and signed the general release agreement. By signing the general release, which did not specifically identify USERRA as a released claim, the plaintiff waived "all claims, demands, actions, or liabilities [he] m[ight] have against IBM of whatever kind" including "any other federal, state or local law dealing with discrimination including, but not limited to, discrimination based on … veteran status … "
Despite signing this general release, the plaintiff filed a complaint alleging discrimination under USERRA. IBM moved to dismiss the claim on the basis that the plaintiff had released the USERRA claim. In response, the plaintiff argued that because the release agreement eliminated his rights and benefits under USERRA, the release was "superseded" by 38 U.S.C. § 4302, which states as follows:
Based on this decision, it appears that USERRA claims can be released; however, the analysis is somewhat different than the traditional "knowing and voluntary" standard used to determine the validity of many releases, in that it also includes an evaluation of whether the consideration the Service Member received for the release is more beneficial that the USERRA claim that he or she released. Therefore, to help ensure that a Service Member validly releases claims under USERRA, the release should clearly explain that it releases USERRA claims, and it may help to have the Service Member expressly agree that the consideration given for the release is more beneficial than the Service Member's right to pursue a claim under USERRA.
After returning from a tour of duty in Afghanistan, the plaintiff sought retraining for and reinstatement to his pre-leave position at IBM. IBM refused the request for retraining, but did reinstate the plaintiff; however, within four months, IBM terminated the plaintiff's employment. On the day of his termination, IBM offered the plaintiff severance in exchange for signing a general release of all claims. The plaintiff accepted more than $6,000 in severance and signed the general release agreement. By signing the general release, which did not specifically identify USERRA as a released claim, the plaintiff waived "all claims, demands, actions, or liabilities [he] m[ight] have against IBM of whatever kind" including "any other federal, state or local law dealing with discrimination including, but not limited to, discrimination based on … veteran status … "
Despite signing this general release, the plaintiff filed a complaint alleging discrimination under USERRA. IBM moved to dismiss the claim on the basis that the plaintiff had released the USERRA claim. In response, the plaintiff argued that because the release agreement eliminated his rights and benefits under USERRA, the release was "superseded" by 38 U.S.C. § 4302, which states as follows:
(a) Nothing in this chapter shall supersede, nullify or diminish any federal or state law (including any local law or ordinance), contract, agreement, policy, plan, practice or other matter that establishes a right or benefit that is more beneficial to, or is in addition to, a right or benefit provided for such person in this chapter.The court disagreed. In a case of first impression, the court found that although a release or waiver of a USERRA claim implicates § 4302, that section did not automatically prohibit a Service Member from releasing a USERRA claim. Rather, the court reasoned that the critical inquiry was whether the rights provided to the Service Member under the release were more beneficial than the rights he waived. In analyzing the release under this test, that court concluded that because the release was clear and expressly referred to claims based on "veteran status," and because there was no evidence of duress, the plaintiff must have believed that the $6,000 he received for the release was more beneficial that the right he had to proceed with a claim alleging a violation of USERRA.
(b) This chapter supersedes any state law (including any local law or ordinance), contract, agreement, policy, plan, practice, or other matter that reduces, limits or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or the receipt of any such benefit.
Based on this decision, it appears that USERRA claims can be released; however, the analysis is somewhat different than the traditional "knowing and voluntary" standard used to determine the validity of many releases, in that it also includes an evaluation of whether the consideration the Service Member received for the release is more beneficial that the USERRA claim that he or she released. Therefore, to help ensure that a Service Member validly releases claims under USERRA, the release should clearly explain that it releases USERRA claims, and it may help to have the Service Member expressly agree that the consideration given for the release is more beneficial than the Service Member's right to pursue a claim under USERRA.
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