Veterans’ Benefits Act of 2010 - Expanding Employee Protection Under USERRA

10/15/2010

Before heading into the pre-election recess, the Senate passed the Veterans’ Benefits Act of 2010 on September 28, 2010. See H.R. 3219, 111th Cong. (2d Sess. 2010). The Act, which passed in the House over one year ago, is a compromise measure between the House and the Senate and encompasses several veterans’ benefits bills. Of notable importance to employers is the Act’s expansion of employee protection under the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). Section 701 of the Act redefines the terms “benefit,” “benefit of employment,” and “rights and benefits” under USERRA to include wages or salary for work performed, thereby prohibiting wage discrimination against members of the Armed Forces.

In addition, the Act clarifies the definition of “successor in interest” and outlines a seven-factor test to determine whether an entity meets the definition of “successor in interest.” H.R. 3219 § 702. If an entity is deemed a “successor in interest,” it can be held liable for its predecessor’s conduct or can inherit its predecessor’s duties and obligations under USERRA.

To determine “successor in interest” status, the following factors should be considered on a case-by-case basis:

(1) Substantial continuity of business operations;
(2) Use of the same or similar facilities;
(3) Continuity of work force;
(4) Similarity of jobs and working conditions;
(5) Similarity of supervisory personnel;
(6) Similarity of machinery, equipment, and production methods; and
(7) Similarity of products or services.

In addition, the new provision makes clear that lack of notice or awareness of a potential or pending claim at the time of the merger, acquisition, or other form of succession, shall not be considered when determining “successor in interest” status. See id.

Last, the Act creates a 36-month trial period for referring USERRA claims brought against federal executive agencies to the Office of Special Counsel (“OSC”). H.R. 3219 § 105. The Act requires the Secretary of Labor to refer certain claims made during the trial period—USERRA claims brought by individuals with a social security number ending in an odd number—to the OSC. The trial program also encompasses USERRA claims brought by individuals who have a related claim under 5 U.S.C. § 1212.

The Veterans’ Benefits Act of 2010 contains several additional improvements and benefits for veterans. President Obama signed the Act into law on October 13, 2010.

For more information, please contact the Haynes and Boone attorney with whom you work or any of the following attorneys in the firm’s Labor and Employment Practice Group:

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