Iraq Veteran May Have USERRA Claim On Exclusion From Hiring List, Court Rules

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By Kevin P. McGowan  

Feb. 27 --An Arkansas Army National Guard member terminated from his civilian job as an oil and gas rig hand while he was on active duty in Iraq and excluded from a list of potential hires when his employer sold the business may have a discrimination claim under the Uniformed Services Employment and Reemployment Rights Act, the U.S. Court of Appeals for the Eighth Circuit ruled Feb. 27 (Dorris v. TXD Servs., LP, 8th Cir., No. 12-3096, 2/27/14).

Jonathan Dorris has no USERRA claim based on TXD Services' failure to reinstate him to his former job in December 2008, when Dorris returned from active duty, because TXD was no longer operating the rig and was not employing anyone, the appeals court said.

But it said Dorris may have a USERRA discrimination claim because while he was in Iraq, TXD in February 2008 did not include Dorris's name on a list of current employees it supplied to Foxxe Energy Holdings LLC, the company that purchased TXD's assets and hired TXD's former employees to continue the drilling operations in Morrilton, Ark.

The court agreed with TXD that it's “immaterial” whether Dorris quit or was fired in October 2007 when he left the company to report for active military duty.

The district court erred, however, in ruling in favor of TXD on Dorris's claim that the company may have unlawfully discriminated based on his military service by excluding him from the list of employees that Foxxe should consider hiring, the Eighth Circuit said.

TXD argued it included only “current employees” on the list and that Dorris, along with other workers on furloughs or long-term leaves, fell outside that category.

Possible Bias Based on Military Status

But the Eighth Circuit said Dorris may be able to show TXD denied him a benefit not dependent on employee seniority in violation of 38 U.S.C. § 4316(b)(1) by excluding him from the list of employees eligible for hire by Foxxe.

USERRA requires employers “to treat employees taking military leave, equally, but not preferentially, in relation to peer employees taking comparable non-military leaves” regarding non-seniority benefits, the court said.

“We construe [USERRA] 'broadly and in favor of its military beneficiaries,' ” Judge James B. Loken wrote. “Applying this broad definition to the sparse record before us, a reasonable jury could find that the opportunity for seamless transfer of employment to a successor employer was an 'advantage' or 'benefit' of TXD employment.”

Dorris's evidence indicated Foxxe hired most, if not all, active TXD employees after the assets sale, permitting the inference that inclusion on the February 2008 personnel list “provided employees a meaningful advantage or benefit,” the court said.

“There may be facts that would defeat this legal theory,” the court said. “But on this record, whether Dorris was denied a benefit of employment when TXD did not include him on the asset sale list is a disputed issue of material fact.”

On remand, the district court also must determine whether TXD excluded or would have excluded from the February 2008 list the names of employees then on long-term leaves for reasons other than military service, the Eighth Circuit said.

Neither party addressed that issue below, but the answer is critical to Dorris's USERRA discrimination claim, the appeals court said.

“[I]f being on the list was a benefit of employment and Dorris's military service was 'a motivating factor' in his not being on the list, the burden shifts to TXD to show that the same action would have been taken in the absence of military service, i.e., that anyone similarly on furlough or leave of absence would have been left off the list,” Loken wrote.

 

To contact the reporter on this story: Kevin P. McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com


Text of the opinion is available at http://www.bloomberglaw.com/public/document/Jonathan_Dorris_v_TXD_Services_Docket_No_1203096_8th_Cir_Sept_05_.