USERRA Presents Staffing Agency Challenges

​The Uniformed Services Employment and Reemployment Rights Act (USERRA) is a federal law that protects members of the military, including the Reserves, and requires employers to return them to their civilian jobs following a period of uniformed service. For staffing agencies, USERRA presents unique challenges, because their assigned employees' jobs are, by definition, temporary in nature. Yet USERRA contains no staffing agency exemption (or any other exemption, for that matter), and staffing agencies have the same obligations as a full-time employer. But what if the worker's last client assignment no longer exists?

A case just filed in federal court in Louisiana illustrates the dilemma. According to the Complaint (attached below), TRS Staffing Solutions assigned Crystal Hayes to work as a warehouse material coordinator at CF Industries. Hayes was a member of the U.S. Army Reserve and was called to active duty. When her deployment neared its end, she contacted TRS to inform it of her intent to return to work with CF. TRS contacted CF to coordinate Plaintiff’s return, but CF's human resource department advised that CF no longer had any positions in its warehouse.

TRS apparently failed or was unable to supply Hayes with an equivalent position elsewhere, and she sued both CF and TRS as co-employers (which they are for purposes of discrimination laws). The Complaint does a good job of listing an employer's duties under USERRA:

20. Section 4311 of USERRA provides, in relevant part, that a person “who is a member of, … performs, has performed, … or has an obligation to perform service in a uniformed service shall not be denied … any benefit of employment by an employer on the basis of that membership, … performance of service, or obligation.”
21. Section 4312 of USERRA provides, in relevant part, that “any person whose absence from a position of employment is necessitated by reason of service in the uniformed services shall be entitled to the reemployment rights and benefits and other employment benefits.”
22. Section 4313 of USERRA (further codified by 20 C.F.R. § 1002.191) provides that an employee is entitled to be reemployed in a position that reflects with reasonable certainty the pay, benefits, seniority, and other job perquisites, that he or she would have attained if not for the period of service.
23. Section 4316 of USERRA provides that any period of absence from employment due to or necessitated by uniformed service is not considered a break in employment, so an employee absent due to military duty must be treated as though they were continuously employed.
24. Section 4316 further provides that a person who is reemployed “is entitled to the seniority and other rights and benefits determined by seniority that the person had on the date of the commencement of service in the uniformed services plus the additional seniority and rights and benefits that such person would have attained if the person had remained continuously employed.”
25. “The employer must determine the seniority rights, status, and rate of pay as though the employee had been continuously employed during the period of service.” 20 C.F.R. § 1002.193.
26. CF knowingly and willfully violated USERRA by, among other ways, failing to reemploy Ms. Haynes with the pay, benefits, seniority, and other job perquisites, that she would have attained if not for her period of service.
27. CF further knowingly and willfully violated USERRA by, among other ways, denying Ms. Haynes employment benefits and reemployment “on the basis of” her “obligation to perform service in a uniformed service.”
28. TRS knowingly and willfully violated USERRA by, among other ways, failing to reemploy Ms. Haynes in a position of like seniority, status, and pay after learning that CF no longer had any positions at its warehouse.
29. TRS further knowingly and willfully violated USERRA by, among other ways, denying Ms. Haynes employment benefits and reemployment “on the basis of” her “obligation to perform service in a uniformed service.”

Reducing risk

When this happens, the staffing firm should first try to persuade the client to find or make an equivalent position for the worker, explaining that the client is not immune from liability just because it used a staffing firm (hopefully, the agency did not sign a client contract requiring that the agency provide indemnity for all worker lawsuits). The Agency should offer to do this at little or no markup. Although the client is not likely to create a job in most circumstances, advocating for the worker will strengthen the agency's position in a lawsuit. The next obvious step is to diligently search for an equivalent assignment. At the end of day any assignment, even a non-equivalent one, is better than none. This is because USERRA damages consist of the lost wages arising from the non-reinstatement, and these damages are doubled for willful violations. A strong job search will diminish, if not eliminate, the chances that willfulness will be found. Also, wages that are earned will offset any claimed damages.