December 2017 – Mandy Brown

The Ninth Court has armed a judgment in favor of a servicemember who argued that his employer violated the Uniformed Services Employment and Reemployment Act (USERRA) by paying him a lower bonus than he would have received had he not left for active duty. The court armed the district court’s ruling, which awarded the plaintiff the higher signing bonus. (Huhmann v. Fed. Express Corp., 874 F.3d 1102 (9th Cir. 2017))

In 2001, FedEx hired U.S. Air Force Reserve officer Dale Huhmann to pilot what the company termed a “narrowbody” aircraft. Huhmann was later selected for training to pilot a “wide-body” aircraft, which would have entitled him to a higher salary. In February 2003, weeks before his training began, Huhmann was mobilized for active duty. He served overseas until August 2006.

While Huhmann was overseas, FedEx offered his union a bonus for members if the union ratify a proposed collective bargaining agreement (CBA). The oer letter stated that pilots on active pay status or military leave from June 1, 2004, to Oct. 30, 2006—the day the CBA was ultimately signed—would be entitled to a bonus. The letter established that the bonus for narrow-body aircraft pilots would be $7,400, and the bonus for wide-body aircraft pilots would be $17,700.

Huhmann returned to FedEx in December 2006, received the $7,400 bonus, and began the wide-body aircraft training for which he had been selected previously. He was officially activated as a wide-body aircraft flight officer in February 2007.

Huhmann sued FedEx, arguing that the company violated USERRA by refusing to award him the higher bonus, which he claimed he would have received had he not left for military service and been unable to complete his wide-body aircraft training in 2003. The district court agreed, entering a judgment in Huhmann’s favor after a bench trial.

The Ninth Circuit reviewed the district court’s analysis of Huhmann’s claim under 38 U.S.C. §4311, which requires plaintiff to show, by a preponderance of evidence, that their “protected status was a substantial or motivating factor in the adverse employment action.” Under §4311, if the plaintiff meets this standard, the burden then shifts to the defendants to show they would have taken the same action regardless of the plaintiff’s protected status.

To determine whether Huhmann’s protected status as a service member was a substantial factor in his receipt of the lower bonus, the district court applied both the “escalator principle” and the “reasonable certainty test.” Under the escalator principle, service members returning from active duty should be placed in the employment positions in which they would have been had they never left to serve. The reasonable certainty test helps determine where the returning service member should be on the career “escalator” by asking what position he or she would have been “reasonably certain to have attained absent the military service.”

The district court found that it was reasonably certain that had Huhmann not left for active duty, he would have become a wide-body pilot by the relevant period and been entitled to the higher bonus. The court also found that FedEx had failed to meet its burden to show that Huhmann would have been awarded the lower bonus regardless of his military leave.

On appeal, FedEx raised four arguments: that the case should have gone to arbitration under the Railway Labor Act (RLA), which requires arbitration of “minor” disputes, such as those over CBA language; that the escalator principle and reasonable certainty test apply only to §4312 claims; that even if the reasonable certainty test applies to §4311 claims, the district court erred in determining that Huhmann met this standard; and that Huhmann’s claim was barred under §4316(b)(1), which limits non-seniority based USERRA benets. The Ninth Circuit rejected each argument.

First, the court held that the RLA does not apply because the right at issue arose under USERRA, not the CBA. “You can unfortunately nd case law—Carder v. Continental Airlines (636 F.3d 172 (5th Cir. 2011)) is one example —where courts have dismissed USERRA claims related to CBAs, finding these to be ‘minor’ disputes requiring mandated arbitration under the RLA,” said San Diego attorney Brian Lawler, who represented Huhmann. “What the Ninth Circuit determined is that it’s not really a question of what’s major or what’s minor. Instead, the court concluded that the dispute involves a statutorily provided protection that rises above and beyond the conditions of the CBA. So the RLA does not apply.”

The Ninth Circuit then found that the district court correctly applied the escalator principle and reasonable certainty test as part of the §4311 burden-shifting analysis and that these principles did not apply only to §4312 claims, as the defendant had claimed. The court also determined that the district court had not clearly erred in finding that Huhmann satisfy the reasonable certainty test. Applying the reasonable certainty test requires courts to decide whether “as a matter of foresight, it was reasonably certain that advancement would have occurred, and if, as a matter of hindsight, it did in fact occur,” the court said. Although FedEx accepted that Huhmann had satisfied the hindsight prong by ultimately passing the training, the company argued that he could not satisfy the foresight prong because becoming a wide-body aircraft pilot was not an automatic career progression but depended on the discretion and judgment of the instructors. The Ninth Circuit disagreed, noting that the facts on record—including Huhmann’s extensive piloting experience and his admission to the training program before his military leave—supported the district court’s conclusion that Huhmann was reasonably certain to have passed the training.

Finally, the Ninth Circuit armed that Huhmann’s claim was not barred under §4316(b)(1). The court agreed with the district court that the bonus was partly based on seniority because it demanded “longevity of employment,” requiring pilots to be employed during the June 1, 2004 to Oct. 30, 2006 period. “The defense spent a great deal of time in their briefs and at oral arguments claiming that this bonus was not a seniority-based benet,” said Lawler. “The court rejected this argument, and I think this aspect of their decision and their analysis of the variety of factors that should determine whether a benet is based on seniority may have long-standing effect.”

Washington, D.C., attorney R. Joseph Barton, who represents servicemembers in USERRA cases, agreed that this decision was a positive one for members of the armed forces. “As one of the purposes of USERRA is to encourage military service, one of the benets USERRA provides is that servicemembers can return to the careers they left behind—they won’t be red, and they also won’t fall behind their colleagues,” said Barton. “Whether service members are gone for three months or three years, their employers are obligated to put them into the career positions they would have been in had they never left to serve. When this issue is litigated, it is ultimately a factual determination of what that position is. In this case, there didn’t appear to be much dispute about the facts but simply what inferences should be drawn from them. And ultimately, this a very good decision for service members on applying these principles.”