Understand Whether Employers May Soon Need to Pay Employees On Military Leave

On February 3, 2021, the United States Court of Appeals for the Seventh Circuit issued a unanimous, three-judge panel decision which may soon require employers in the states of Wisconsin, Illinois and Indiana to either provide paid leave to their employees on military leave or risk violating the Uniformed Services Employee and Reemployment Rights Act (“USERRA”)—a federal law protecting employment rights of service members, and prohibiting employment discrimination on the basis of military service or affiliation.

In White v. United Airlines, Inc., et al., a group of pilots accused United Airlines of violating USERRA when it did not grant them paid leave and profit-sharing credit while they were on short-term military leave. Although a number of federal district courts throughout the country have addressed this issue, they have done so in a largely inconsistent manner. For example, in 2019 the United States District Court for the Eastern District of Pennsylvania held that employers must pay for military leave, but then in 2020 reversed course and held that pay was not required under USERRA.

Prior to the Seventh Circuit’s decision earlier this month in White, however, no federal appellate court had ruled on this issue. Its decision therefore constitutes a significant development in the area of military leave, and employers, initially in the Midwest, will need to monitor further developments in this case.

Underlying Facts

Eric White, the lead plaintiff in White, is a United Airlines pilot who had taken periods of short-term military leave to complete his reserve duty, and who was granted leave but not pay from United Airlines for that reserve duty. United Airlines’ short-term leave policy provided pay during various types of involuntary short-term leave, such as jury duty and sick leave, but not during short-term military leave. Mr. White claimed that this practice constituted unlawful discrimination in violation of USERRA.

Relevant USERRA Provisions

USERRA mandates that an employer furnish the same “rights and benefits” (i.e., terms, conditions and privileges of employment) to employees on military leave as it does for employees on “comparable” non-military leave. It also provides that, in determining whether non-military leave is comparable to military leave, the relevant factors include the duration, purpose and controllability of the leave.

The Decision

In its surprising opinion, the Seventh Circuit reversed the decision of the United States District Court for the Northern District of Illinois which had dismissed the case, and held that—contrary to the opinion of the District Court—"rights and benefits" under USERRA include paid leave. While recognizing that the United States military is entirely comprised of volunteers, the Court noted that it could not be said that an employee's absence due to military reserve duty was any less controllable than an employee's absence attributable to jury duty or illness. The Seventh Circuit therefore became the first federal court of appeals to hold that USERRA requires a private sector employer to provide pay during military leave if it provides pay during other "comparable" absences, which may include sick leave or jury duty.

Notably, the Seventh Circuit did not hold that the jury duty or sick leave situations for which United Airlines provided pay were indeed "comparable" to the short-term military leave which either Mr. White or other class members used to fulfill their reservist obligations. The Court simply invalidated the District Court’s blanket proclamation that neither jury duty nor sick leave was comparable to military leave “as a matter of law,” and reasoned that more facts would be required to make such a fact-specific determination. Nor did the Court rule on whether employees on military leave would be entitled to their full pay during military leave (without an offset for pay received from the military), and if so, for what duration that pay obligation may continue. It also left these issues to be decided by the District Court.

The Impact of Court's Decision

On February 17, 2021, United Airlines filed a Petition for Rehearing with the Seventh Circuit, requesting that all 11 judges of the Court review the case. Whether the rehearing petition will be granted is unknown. But, given the existing three-judge panel decision, and the anticipated developments from the District Court on remand if the entire Seventh Circuit does not agree to review the White decision, private sector employers who provide pay or benefits to employees absent for jury duty, illness or other types of involuntary absences may soon be required to provide the same pay and benefits to employees on military leave, including during military leave taken to fulfill reservist obligations.

What Should Employers Do Now?

Employers—particularly those in Wisconsin, Illinois and Indiana—should watch for further developments in the White case. Employers can anticipate that their employees who are absent during military leave may be seeking comparable pay and benefits to that provided to employees who are absent for other involuntary reasons.

Employers in other jurisdictions should also be alert, because a class of pilots has filed a similar class action case against Southwest Airlines in the United States District Court for the Northern District of California. What's more, because there is no applicable statute of limitations for bringing USERRA claims, employees may even be able to seek pay from an employer for military leaves taken in previous years.

Employers should review the pay and benefits they currently provide to employees who are involuntarily absent from work and determine whether or not the events for which that pay is provided are "comparable" in "duration, purpose and controllability" to military leave. If they are, depending upon further developments in the White case, employers may be required to provide the same pay and benefits to employees on military leave.

As this is an evolving area of law, employers who have concerns or specific questions related to pay or benefits which they may be required to provide to employees on military leave should consult with legal counsel.

For assistance in assessing your company's military leave obligations under USERRA, please contact your local Quarles & Brady attorney, or:

• Robert H. Duffy : (414) 277-5647 / robert.duffy@quarles.com
• Brenna M. Wildt : (414) 277-5328 / brenna.wildt@quarles.com