Q: Are employers required to pay wages to employees who are absent due to military service, similar to how they would be paid for jury duty or to attend a funeral?

A: At least for employers in Illinois, Indiana and Wisconsin, employees who need time off for military leave may be entitled to paid leave commensurate with the employer’s other paid leave policies.  In a recent decision issued by the U.S. Court of Appeals for the Seventh Circuit, White v. United Airlines, Inc., the Court held that the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) requires employers to provide paid military leave for employees if the employer also provides “comparable” paid leave for other, nonmilitary time away from work, such as for jury service or sick leave.

The case arose when a commercial pilot initiated a class-action suit against the airline and its parent company that alleged the company violated a provision of USERRA requiring that employees who are absent due to military service are “entitled to such other rights and benefits not determined by seniority as are generally provided by the employer . . . to employees having similar seniority, status, and pay” under leave policies maintained by the employer. The statute defines “rights and benefits” to include payments made to employees “by reason of an employment contract or agreement or an employer policy, plan, or practice.”

The district court dismissed the plaintiff’s complaint, finding that it threatened to create “a de facto universal requirement that private employers pay for military leave,” contrary to the prevailing understanding of the statute. The district court also held that leave for jury service and military leave are not comparable as a matter of law. The lower court explained that “if businesses were to be required to pay for short-term military leaves of absence simply because they offer sick days or pay for jury duty, it is this Court’s view that it is within Congress’s discretion to make that decision, and it has not done so” in the express language of the USERRA.

On appeal, plaintiffs argued that the statute defines “rights and benefits” broadly, with no express limitations. The Seventh Circuit agreed, explaining that the “expansive and illustrative” text of the USERRA “defines the term ‘rights and benefits’ broadly, and under this definition, paid leave — i.e., compensation at the normal rate during a leave of absence — is included.” The Court further explained that an employer’s policy of paying employees during a leave of absence is a “term, condition, or privilege of employment” under the statute, which “essentially ends our inquiry.”

Because the USERRA definition of “rights and benefits” includes paid leave, the court concluded that the lower court erred in dismissing the claim as a matter of law. The question of whether the airline’s jury duty or other paid leave policies were “comparable” to the short-term military leave policy was referred back to the district court for a fact-specific inquiry. To facilitate the inquiry, the Seventh Circuit instructed the district court to consider guidance issued by the U.S. Department of Labor, which offers a number of factors to consider when determining whether two types of leave are “comparable.” In addition to factors such as the purpose of the leave and the employee’s ability to choose the timing of the leave, the guidance states that “the duration of the leave may be the most significant factor to compare.” Given that military leave under USERRA frequently is short term in nature, the “duration” factor often could result in a finding that it is comparable to other forms of short-term leave, such as bereavement or jury duty leave.

The White v. United Airlines decision is the first of its kind at the federal appellate level, although the issue has been brewing for some time in other federal district courts. In 2019, for example, the United States District Court for the Eastern District of Pennsylvania denied the employer’s motion to dismiss a similar claim under USERRA, finding that employers may be required to pay for military leave in some circumstances. However, another decision issued by the same court a year later found otherwise, granting the employer’s motion to dismiss and stating that the USERRA does not provide for paid military leave.

Employers with employees serving in the military should pay attention to developments in this area, particularly those employers with operations in Illinois, Indiana, and Wisconsin. If the issue of paid military leave gains traction — and one should assume plaintiff attorneys also are paying attention to this — employers in other jurisdictions could face significant costs for providing paid military leave if other employer leave policies are deemed “comparable” under the USERRA.  Large companies with a significant number of employees taking military leave in particular should take heed of this issue in the face of potential class action lawsuits. To mitigate the risk, employers should consider engaging counsel to conduct a comprehensive review of their paid leave policies to determine whether they might be “comparable” to military leave in light of the Seventh Circuit decision and Department of Labor guidance.