What happened?

On May 21, 2024, The U.S. Court of Appeals for the Third Circuit stated that, although leave is usually unpaid, employers might need to pay employees for the leave if certain conditions are met. This is similar to several cases in other Appeals Courts.

What are the details?

Under USERRA, employers must offer the same benefits to employees on military leave as those on similar leaves. If benefits differ, the employee should receive the best treatment in line with any comparable leave. Factors such as leave duration, purpose, and employee’s choice of when to take it are considered in assessing comparability

The Case: Breakdown

• Case: Scanlan v. American Airlines Group, Inc.
• Plaintiffs: A group of pilots who took short-term military leave between January 1, 2013, and October 31, 2021.
• Defendant: American Airlines, which did not pay the pilots during their military leave, but did pay employees on bereavement and jury-duty leave.
• Argument: The pilots argued they should have received paid military leave under USERRA, as the employer-provided paid leave for bereavement and jury duty.
• Factors for Comparability: Duration of the leave (between 1-3 days), the purpose of the leave (all having a public purpose), and the employee’s flexibility in scheduling it.
• USERRA’s Mandate: While USERRA does not mandate employers to pay employees on military leave, it entitles them to the same rights and benefits as employees on similar leaves.
• Most Favorable Treatment: If benefits vary, an employee on military leave is entitled to the most favorable treatment given to any comparable leave.
• Court’s Decision: The Third Circuit held that a jury could find these three types of leave to be comparable. The court held that a reasonable jury could find short-term military leave comparable to jury duty or bereavement leave.
• Recent Trend: This marked the fourth U.S. Court of Appeals in recent years to hold that short-term military leave might be sufficiently comparable to other short-term paid leaves, and thus should be paid.

Business Considerations

• Employers should be aware that, if they provide paid short-term leave for other reasons, their generosity may trigger obligations to provide equivalent paid short-term military leave.
• Employers should consider that duration, the purpose of the leave and the ability of the employee to choose when to take the leave are factors for comparability that the court used to “transform” unpaid leave to paid leave in this case.
• Employers should review their leave policies to ensure they comply with USERRA. This includes providing the same benefits to employees on military leave as those on comparable leaves considering the trend in the US Appeals Courts.
• Employers should provide training to HR and management personnel to ensure they understand the requirements of USERRA and can properly implement accurate decisions.

Source References

• Scanlan v. American Airlines Group, Inc.

Resources

• U.S. Court of Appeals for the Ninth Circuit: Clarkson v. Alaska Airlines, Inc. 
• U.S. Court of Appeals for the Seventh Circuit: Eric White v. United Airlines, Inc. and United Continental Holdings, Inc
• U.S. Court of Appeals for the Third Circuit: Gerard Travers v. Federal Express Corporation 
• USERRA Employment Guide

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