A federal district court was recently asked to determine whether a
COBRA notice sent by an employer to an employee on active military
duty provided evidence of discrimination in violation of the
Uniformed Services Employment and Reemployment Rights Act
("USERRA"). USERRA generally prohibits discrimination
against employees because of military service and provides certain
reemployment rights to those returning from active duty.
v. TXD Services, LP, an employee who returned from a 15-month
period of active military duty sued his former employer, claiming
that he was fired because of his military service. While the employee
was away on active duty, the employer had sold substantially all of
its assets to a successor employer and, as part of the sale, provided
a list of current employees to the buyer, who agreed to use
reasonable efforts to offer employment to them. However, the employee
on military leave was omitted from the list of current employees, thus
prompting him to allege that he was fired in because of his military
evidence of the alleged discrimination, the employee cited the COBRA
notice he had received shortly after his deployment, which offered
him continuation coverage due to his "termination of
employment." The employer responded that the employee was
considered to be on leave and was, therefore, not included on the
list of current employees provided to the buyer. The court agreed
with the employer, quoting Department of Labor regulations issued
under USERRA, which say an employee on active duty is "deemed to
be on furlough or leave of absence."
court next addressed the "termination of employment"
language contained in the COBRA notice. "Although the COBRA letter
contained the words 'termination of employment'...that alone does not
prove that [the employer] terminated the employee in violation of the
USERRA. To the contrary, the 'termination of employment' language is
derived from the COBRA statutes, not from...USERRA." Ultimately,
the court concluded that a termination of employment for purposes of
COBRA was not the same as a termination for purposes of USERRA.
Therefore, the employee had presented no evidence to support his
claim of discrimination. The court ruled in favor of the employer.
While COBRA and USERRA both provide employees on active military duty
with the right to continued health coverage for certain periods of
time, Dorris highlights that there are many significant
differences between the two laws. For example, USERRA requires
employers to reinstate health coverage upon the employee's return,
while COBRA does not have this requirement. Plan sponsors must be
aware of USERRA's additional health care coverage obligations and
understand how these obligations differ from COBRA.
ensure compliance with USERRA and COBRA, employers should consult
with qualified benefits professionals.