Members of the “uniformed services” are reliable, hardworking members of our society who have dedicated themselves to serving our country and protecting our rights. However, most employers are not certain as to how their employment policies and practices apply to members of the uniformed services who apply for positions of employment or are current employees. The answer, simply put, is that they are entitled to the same advantages, treatment, and success as persons who are not members of the uniformed services. In fact, in an effort to provide protection to them and guarantee them equal treatment, Congress passed the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 4301 et seq. (“USERRA”).
What is USERRA and who does it protect?
USERRA is a federal law intended to ensure that persons who serve or have served in the Armed Forces, Reserves, National Guard, Air National Guard or other “uniformed services”: (i) are not disadvantaged in their civilian careers or employment due to their service; (ii) are promptly reemployed upon completion of their service; and (iii) are not discriminated against because of their service. USERRA applies to the performance of a duty by a uniformed services member on a voluntary or involuntary basis and includes active duty, active duty training, initial active duty training, inactive duty training, full-time National Guard duty, any period of time when the member is absent from his/her position of employment for purposes of a physical examination related to any such duty, and any period of time a member is absent from employment for the purpose of funeral honors duty. Thus, USERRA was enacted to encourage service in the uniformed services by protecting service members from discrimination and providing job security when they are required to be absent from their employment in order to satisfy their military obligations.
What constitutes discrimination?
Pursuant to USERRA, an employer cannot discriminate against any person who is a member of, applies to be a member of, performs, has performed, applies to perform, or has an obligation to perform service in a uniformed service. An employer shall not deny such person initial employment, reemployment, retention in employment, promotion, or any benefit of employment on the basis of the person’s membership in a uniformed service, application for membership in a uniformed service, performance of service, application for service, or any other obligation related to the uniformed service. Furthermore, an employer is prohibited from discriminating against or taking any type of adverse action against any person who has taken action to enforce a protection under USERRA, who has participated or assisted in an investigation or proceeding related to enforcement of a protection under USERRA, or who has exercised any right provided under USERRA.
An employer is considered to have engaged in discriminatory or prohibited conduct if a person’s membership, service, application for membership or service, or obligation for service is a motivating factor in the employer’s action, unless the employer can prove that the action would have been taken in the absence of such membership, service, application for membership or service, or obligations for service. Likewise, if a person’s enforcement of a protection under USERRA, participation in an investigation or proceeding related to enforcement of a protection under USERRA, or the exercise of any right under USERRA is a motivating factor in the employer’s action, the employer’s conduct is deemed to be discriminatory, unless the employer can show that it would have taken the same action in the absence of the person’s enforcement or participation in the enforcement of any rights under USERRA. In other words, employers are prohibited from taking any adverse action against an employee or prospective employee based on that person’s membership in the uniformed services or that person’s exercise of any rights under USERRA.
When is a uniformed services member entitled to reemployment?
Any person whose absence from work is necessitated by his or her service in the uniformed services is entitled to reemployment and related benefits as long as the person: (i) provides advance written or verbal notice to his or her employer; (ii) does not have a cumulative length of absence from work with that employer in excess of five years; and (iii) reports to, or submits an application for reemployment to, the employer. The person is entitled to be promptly reemployed in the same position and is entitled to the seniority and other benefits determined by seniority that the person had as of the date of the commencement of his or her service, plus the additional seniority and benefits that the person would have attained had he or she not been absent from work.
However, there are certain circumstances when the employer is not required to reemploy a person whose absence from work is due to his or her service in the uniformed services. Specifically, an employer is not required to reemploy the person if: (i) the employer’s circumstances have so changed so as to make reemployment impossible or unreasonable; (ii) such reemployment would impose an undue hardship on the employer; or (iii) the employment from which the person leaves to serve in the uniformed services is for a brief, nonrecurrent period and there is no reasonable expectation that such employment will continue indefinitely or for a significant period of time. It is important to note that the employer bears the burden of proving any or all of the aforementioned circumstances. Thus, while a person who serves in the uniformed services is entitled to certain protections and job security while away in service, the person’s right to reemployment is not absolute. USERRA takes into consideration current economic conditions and the state of the employer’s business at the time of the proposed reemployment.
The protections provided under USERRA are generally enforced through direct application of the very statutes and regulations which describe and enumerate such rights. There is very little case law or Court direction regarding the enforcement of USERRA’s provisions. This is likely due to the fact that employers are quick to correct their actions once they are aware of their obligations under USERRA. However, the United States Supreme Court recently rendered a decision which provides additional guidance regarding an employer’s liability for the discriminatory conduct of its agents or employees which result in or are the proximate cause of an adverse action by the employer against a person protected under USERRA.
On March 1, 2011, the U.S. Supreme Court rendered its decision in Staub v. Proctor Hospital, 131 S.Ct. 1186 (2011). The issue before the Court in Staub was under what circumstances an employer may be held liable for employment discrimination based on the discriminatory animus of an employee who influenced, but did not make, the ultimate employment decision. In other words, the Court was called upon to interpret the “motivating factor” language found in 38 U.S.C. §4311. Staub was employed by Proctor Hospital as an agiography technician and was a member of the U.S. Army Reserve. As a reservist, Staub was required to attend training one weekend each month and for a two week period each year. Staub’s immediate supervisors were hostile to his military obligations. At one point, one of his immediate supervisors issued a disciplinary warning to Staub and, later, the other immediate supervisor reported to Proctor Hospital’s Vice President of Human Resources that Staub had violated the terms of the warning. The report of the alleged violation was fabricated by the immediate supervisor based on her frustration with Staub’s ongoing military obligations. Ultimately, the Vice President reviewed Staub’s file and terminated him. Staub alleged that his termination was motivated by his status as a reservist and was in violation of USERRA.
The Supreme Court recognized that a “motivating factor” obviously exists where the ultimate decision-maker is personally acting out of hostility to the employee’s obligations as a member of the uniformed services. However, it is less obvious when the decision-maker has no military hostility, but is influenced by the actions of other employees or supervisors who do possess antimilitary animus. The Court, in finding Proctor Hospital liable, held that “if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.” In other words, if a supervisor or other agent of the employer, motivated by antimilitary bias, takes an action intended to get a member of the uniformed services fired, and if that act is a proximate cause of the member’s termination, the employer can be held liable for a violation of USERRA even if the biased supervisor or other employee is not the final or ultimate decision-maker and even if the ultimate decision-maker is unbiased.
The employment of members of the uniformed services is beneficial to the employer, the employee, and their communities as a whole. It is important that both the employer and the employee be aware of the rights and protections provided by USERRA and that both follow the practices and procedures required by USERRA. USERRA should not be viewed as a burden or an obstacle, but as a means of encouraging the careers of members of the uniformed services and minimizing the disruption to their lives as well as their employers, fellow employees and their communities.
Brendan R. Yates is an associate with McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Yates focuses his practice on construction and real estate litigation, workers’ compensation defense litigation, insurance defense, commercial litigation and employment law. He is located in the firm’s Lexington office and can be reached at firstname.lastname@example.org or at (859) 231-8780.
 38 U.S.C. § 4301(a).
 38 U.S.C. § 4303 (13).
 38 U.S.C. § 4311.
 38 U.S.C. § 4311.
 38 U.S.C. § 4312.
 38 U.S.C. § 4313 and 38 U.S.C. §4316.
 38 U.S.C. §4312.
 Staub v. Proctor Hospital, 131 S.Ct. 1186, 1189 (2011).
 Staub, 131 S.Ct. at 1191.
 Id. at 1194.
Who Breached First? Protecting the enforceability of an employer’s no-compete agreement in Kentucky.
Many employers are aware of the substantial benefits a no-compete agreement can provide. No-compete agreements (also referred to as covenants not to compete) offer effective protection for an employer’s legitimate business interests, including but not limited to preventing former employees from taking away clients or customers[i] and protecting against the use and dissemination of an employer’s confidential and/or proprietary information.[ii] Indeed, even Kentucky courts acknowledge that no-compete agreements serve as a “valuable business tool” for employers. [iii]
Although many employers recognize the value of consulting a knowledgeable attorney to ensure that the no-compete agreement adequately addresses the employer’s business interests and is properly executed, many are unaware that an employer’s acts after executing the no-compete agreement can affect its enforceability.
In Kentucky, a contract – including an employment agreement containing a no-compete provision – may be rescinded where non-performance, misrepresentation, or breach is substantial or material.[iv] Kentucky courts expressly recognize that a former employee’s allegation that his or her employer breached the employment contract first may constitute a valid defense against the employer’s attempt to enforce its no-compete agreement.[v] Simply put, the court may prohibit an employer from enforcing an otherwise valid no-compete agreement if it finds that the employer first breached a material term of that agreement.
Importantly, not all employer actions will constitute a breach of an employment agreement, particularly if the breach is “slight” or “inconsequential.”[vi] Kentucky courts analyze an employer’s acts within the context of the surrounding circumstances and the specific terms of the no-compete agreement. Courts applying Kentucky law have held that the employer first breached the employment agreement in a number of cases and for various reasons, specifically including instances in which the employer:
a) Reduced the exclusive territory reserved for the employee;[vii]
b) Terminated the employee within a few months after executing the no-compete agreement;[viii]
c) Terminated an employee in a particularly harsh or unjust manner;[ix] or
d) Engaged in other acts which strongly indicate bad faith.[x]
The court’s inquiry as to whether an employer first breached the employment agreement is extremely fact-specific. To that end, it is imperative that an employer consult an attorney to not only ensure that its no-compete agreement adequately protects its business interests, but also that acts performed by the employer after signing the no-compete agreement do not breach a material term of employment. An attorney with genuine experience in employment law can help guide an employer to ensure that its acts will not hinder the enforcement of a no-compete agreement and can ultimately protect the employer’s legitimate business interests from potential harm.
Brittany Blackburn Koch, Esq., is an associate attorney practicing in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She is a native of Pikeville, Kentucky, and a graduate of Centre College and the University of Kentucky College of Law. Ms. Koch’s practice focuses primarily on family law, employment law, criminal law and civil litigation. Ms. Koch has served in numerous public service roles, including representation for Fayette County Bar Association Domestic Violence Pro Bono Advocacy Program. She is actively involved in various organizations and committees, including the Board of Directors for Court Appointed Special Advocates (CASA), Young Professional Committee of Lexington Public Library Foundation, Fayette County and Kentucky Bar Associations, and Centre College Alumni Association.
[i] Central Adjustment Bureau, Inc. v. Ingram Assocs., Inc., 622 S.W.2d 681, 686 (Ky. App. 1981).
[ii] Crowell v. Woodruff, 245 S.W.2d 447, 450 (Ky. App. 1951).
[iii] Hammons v. Big Sandy Claims Servs., Inc., 567 S.W.2d 313, 315 (Ky. App. 1978).
[iv] Evergreen Land Co. v. Gatti, Ky. App, 554 S.W.2d 862, 865 (1977).
[v] Webb v. Wagon, Inc., 255 S.W. 2d 459 (Ky. App. 1953).
[vi] Fay E. Sams Money Purchase Pension Plan v. Jansen, et al., 3 S.W.3d 753, 757 (Ky. Ct. App. 1999); see also S. Wabash Communs., Ltd. v. Union County Broad. Co., 69 Fed. Appx. 285, 289 (6th Cir. Ky. 2003).
[vii] Webb v. Wagon, Inc., 255 S.W.2d at 461.
[viii] Crowell v. Woodruff, 245 S.W.2d 447 (1951).
[ix] Lantech.com v. Yarbrough, 2007 WL 2669115 (6th Cir. 2007).