The US Court of Appeals for the Third Circuit held on August 10 in Travers v. Federal Express Corporation that paid leave is among the “rights and benefits” that the Uniformed Services Employment and Reemployment Rights Act (USERRA) requires for employees on military leave if an employer provides them to employees on comparable, nonmilitary leave types, such as jury duty and sick leave. The ruling, which is the second by a federal appeals court to make a similar holding after the Seventh Circuit’s decision in White v. United Airlines, Inc. et al., will likely lead to more litigation around unpaid military leave, and makes it even more critical for employers to review their policies to limit risk.

THE COURT HOLDS THAT USERRA’S PLAIN TEXT AND LEGISLATIVE HISTORY SUPPORT PAID LEAVE AS A ‘RIGHT AND BENEFIT’

Gerard Travers served in the United States Navy Reserve while working for FedEx. He received no compensation from his civilian employer during periods of military leave. As alleged, however, FedEx paid employees during periods missed for jury duty, illness, and bereavement, among other reasons. Travers challenged FedEx’s military leave policy on behalf of a putative class, but a district court in Pennsylvania dismissed his claims, holding that paid leave was not a “right and benefit” under USERRA. The Third Circuit reversed.

First, the Third Circuit rejected FedEx’s argument that the “benefit” at issue was “paid military leave” as opposed to paid leave generally. The court found that this reading “veers away from the text of USERRA,” which “describes a process for evaluating alleged disparate treatment of service members on military leave,” and does not “create a class of rights and benefits.” In other words, the court disagreed with FedEx’s reliance on “extra-textual labels”—i.e., the distinction between “paid leave” and “paid military leave”—and focused its inquiry on whether USERRA “extends a right and benefit in the form of pay to the group of employees who miss work for non-military reasons, but then denies pay to the group absent for military service.”