Third Circuit Court Rules Employers Required to Pay for Military Leave

August 13, 2021

The Third U.S. Circuit Court of Appeals became the second federal appeals court to rule that the Uniformed Services Employment and Reemployment Rights Act (USERRA) requires employers to provide paid military leave if they provide paid leave for comparable non-military absences.

Background:  USERRA is a federal law designed to encourage military service by reducing the negative impacts such service can have on civilian careers.  USERRA requires that employees on military leave receive the same non-seniority-based “rights and benefits” as similarly situated employees on comparable forms of leave.  Prior to a recent Seventh Circuit decision, several district courts have split on whether paid leave is a “right” or “benefit” within the meaning of USERRA.

The Third Circuit ruled that USERRA “does not allow employers to treat service members differently by paying employees for some kinds of leave while exempting military service.”

The potential impact on employers with large reservist workforces in Pennsylvania, New Jersey, and Delaware is significant, as the denial of paid leave could result in a class action lawsuit.  The previous Seventh Circuit Court decision covers Indiana, Illinois, and Wisconsin.

Outlook:  The ruling revived a proposed class action filed against the employer and a federal judge recently certified another 6,700-member USERRA class action.  Expect other class actions lawsuits to spring up in other circuits until this issue is resolved by the Supreme Court.