Employers Cautioned to Respect Military Reservists' Rights

If an employer doesn't know its supervisors are discriminating against employees based on race, age or military service, does that leave the employer in the clear?

The answer, as a recent stateinvestigationand U.S. Supreme Court case show, is no.

After a state investigation,Fred Meyer Storeshas agreedto provide back pay and pension benefits to Oregon employees who were deployed for military service during the last seven years and to modify its employment practices.

Although the Fred Mayer case was limited to Oregon, many employees are not being properly credited during their periods of military deployment, putting their employers at risk of enforcement actions as the number of troops returning from Afghanistan and Iraq increases.

Oregon officials said that once the veterans' concerns were brought to Fred Meyer’s attention, the company was cooperative during the investigation and agreed to correct pay discrepancies for certain qualifying veterans.

The ending was not as amicable for another employer, however, as the U.S. Supreme Court earlier this month issued what many termed a “troubling decision for employers” when it held that an employer may be held liable for the discriminatory actions of a supervisor who influences – but does not actually make – adverse employment decisions.

In the case before the Court, imaging technician and military reservist Vincent Staub argued that his supervisors at Proctor Hospital were hostile to his military obligations and improperly disciplined him and wrote negative reports about his performance as a way of expressing their displeasure.

A human resources executive then made the decision to fire Staub, based on the supervisors' false reports.

Staub filed suit charging that his USERRA rights were violated because his supervisors' actions were motivated by hostility to his military service, even though the human relations executive was unaware of their attitude.

Thorough investigation required

Attorneys are now cautioning their corporate clients on the importance of conducting a thorough, independent investigation before taking any action that may turn out to have been improperly influenced by supervisory employees who do not themselves have the power to hire and fire.

Fred Meyer was able to avoid further prosecution and litigation by acting promptly but other businesses might not be so lucky, employment specialists warned.

"We are pleased that Fred Meyer, a progressive and prominent Oregonemployer, has taken a proactive approach to comply with re-employment rights for all of its veteran employees," saidOregonVeterans’ Affairs Director Jim Willis.

Oregon launched its investigation after receiving complaints from veterans that they had not received step increases and pension benefits during their periods of military deployment in violation of the federal Uniformed Services Employment and Reemployment Rights Act (USERRA) and state law.

Under the settlement, Fred Meyer agrees to:

• Identify all Oregon residents who took military leave from Fred Meyer employment on or after January 1, 2004, who returned to work within 90 days of discharge, and who were subject to a compensation structure providing for pay increases and pension benefits based on their time of service;
• Calculate and provide a pay  and pension adjustment that represents the difference between what theveteran received in step increases and pension benefits and what the veteran should have received if the veteran remained employed at Fred Meyer and had not gone on military leave;
• Going forward, provide deployed veterans step increases and pension benefits consistent with the terms of the agreement; and 
• Contact all qualifying veterans who were employed by Fred Meyer and advise them of the agreement.