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On September 20, 2013, the United States Court of Appeals for the First Circuit considerably clarified reemployment obligations imposed on employers by the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). In Rivera-Melendez v. Pfizer Pharmaceuticals, LLC, the First Circuit vacated a district court’s summary judgment award to an employer, and also explained that USERRA’s “escalator principle” and its “reasonable certainty” test apply to all possible promotions that an employee misses during his or her military leave. It long has been established that the “escalator principle” requires reemployment in the position the employee would have attained with “reasonable certainty” if not for the period of military service. Thanks to the First Circuit’s ruling in Rivera-Melendez, we now know that the “escalator principle” applies even when advancement or promotion to the position normally would depend on employer discretion rather than being automatic.

The facts of the case illustrate. Rivera-Melendez was a member of the United States Naval Reserve. He also was an employee of Pfizer holding an hourly, non-exempt position as Group Leader. In October 2008, Rivera-Melendez received notice that he would be called to active duty. His military leave from Pfizer thereafter ran from December 2008 until October 2009. In February 2009, however, while Rivera-Melendez was serving in Iraq, Pfizer restructured Rivera-Melendez’s department and eliminated all Group Leader positions. Pfizer also informed the other Group Leaders that they could apply for promotion to one of seven salaried, exempt positions as Team Leader and, if not accepted as a Team Leader, could apply for another hourly, non-exempt position as Service Coordinator, be demoted to a Senior Operator position, or participate in a voluntary separation.

When Rivera-Melendez returned from military leave, he contacted Pfizer, requested reemployment, and initially was placed by Pfizer in positions comparable to his position prior to military leave. But when Rivera-Melendez also claimed entitlement under USERRA to a Team Leader position, Pfizer refused that promotion. By then, Pfizer already had filled all seven Team Leader positions.

Rivera-Melendez then went to the federal district court and sued under USERRA. The district court sided with Pfizer and awarded it summary judgment, based on reasoning that Rivera-Melendez could not invoke the “escalator principle” because “[a]n escalator position is a promotion that is based solely on employee seniority . . . . [and] does not include an appointment to a position that is not automatic, but instead depends on the employee’s fitness and ability and the employer’s exercise of discretion.”

Rivera-Melendez next appealed to the First Circuit. And on appeal, his circumstances improved considerably when the United States weighed in on his claim by filing an amicus brief, which the First Circuit later said was “of great assistance to us in working through the issues.” Based in part on the government’s brief, the First Circuit gave “substantial deference” to Department of Labor regulations implementing USERRA, and it cited them to explain why Pfizer and the district court were wrong. Under USERRA, the appropriate inquiry to determine the proper reemployment position is not whether an advancement or promotion was automatic; rather, the inquiry should be whether it was reasonably certain that the returning service member would have attained the higher position but for his or her absence. Because the district court failed to apply that standard, the First Circuit vacated Pfizer’s award of summary judgment and remanded the case for reconsideration in light of the correct standard.

On remand, the district court will have to determine whether there are genuine issues of material fact about whether it is reasonably certain that Rivera-Melendez would have been promoted to Team Leader had military service not interrupted his employment. If genuine issues exist, a trial will be necessary unless the parties otherwise resolve their dispute.

Rivera-Melendez thus provides three lessons that go beyond its legal ruling. The first, as the First Circuit itself emphasized, is that the provisions of USERRA will be construed broadly in favor of military service members. Second, the United States will weigh in to help an employee in an appropriate case. Third, it will be increasingly difficult for employers to avoid trial on disputed reemployment claims. These considerations underscore the importance of sound legal guidance at the outset, whenever a USERRA issue arises.

This advisory was prepared by David C. Henderson, a member of the Labor, Employment and Benefits practice group at Nutter McClennen & Fish LLP. For more information, please contact David at 617.439.2345 or your Nutter attorney at 617.439.2000.

This advisory is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.