“Nothing in USERRA forbids arbitration of claims. Further, an arbitration agreement merely selects the forum for the dispute; it does not affect the substantive rights of the parties.”
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USERRA UPDATE
Arbitration Agreement Covers
USERRA Claim
Will California Courts Follow?
By Christopher W. Olmsted
Employee arbitration agreements are a good way to keep lawsuits out of court. There are pros and cons to using such agreements. But where employers elect to use arbitration agreements, they usually seek to cover all types of employee claims.
What about USERRA claims? USERRA is a federal statute designed to protect military personnel from discrimination and to guarantee reinstatement to civilian jobs upon completion of service.
In a federal Sixth District case, Landis v. Pinnacle Eye Care, Tim Landis was an optometrist who was ordered to report for duty in Afghanistan as a member of the Indiana National Guard. When he returned, the clinic refused to reinstate him to his prior position.
Landis filed suit in federal district court. His employer moved to stay the litigation and force the matter into arbitration. Landis has signed an employee arbitration agreement, agreeing to submit all legal claims to arbitration. The district court granted the motion, ordering the case to arbitration.
The Sixth District Court of Appeal affirmed the decision. The court noted that USERRA does contain general language limiting the power to waive rights: 38 U.S.C. section 4302(b) states: “This chapter supersedes any State law ... contract, agreement, ... or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter....”
However, nothing in USERRA forbids arbitration of claims. Further, an arbitration agreement merely selects the forum for the dispute; it does not affect the substantive rights of the parties.
It remains to be seen whether the same rule will apply in California. Earlier this year, in Perez v. Uline, Inc., a California court refused to enforce a severance agreement that released USERRA rights. The court interpreted the anti-waiver clause quoted above to prohibit such a release. (We reported on Perez here.)
Because arbitration does not affect substantive rights, it seems likely that California courts would rule in line with the Landis case.
Contact Chris Olmsted for help drafting an employee arbitration agreement.
More Legal Update articles.
Download entire September Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2008 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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