The Uniformed Services Employment and Reemployment Rights Act (USERRA) contains an “escalator principle” which requires that employers place service members returning to work into the position the service member would have had but for his or her service–the “escalator position.” In other words, if an employee would have been a supervisor had he not been called to active duty, USERRA requires that the employee be placed into that supervisory position when he returns to work.
On December 5, 2012, the Eighth Circuit concluded, in Milhauser v. Minco Prods., Inc., that “laid off” and “terminated” are valid positions of employment under USERRA. Douglas Milhauser faced the latter situation when his employment with Minco Products, Inc. was eliminated as part of a reduction in force. Milhauser was first employed by Minco in 2006. Over the next three years, he took three military leaves of absence. While working for Minco, Milhauser’s work was regarded as “inconsistent” and occasionally “poor.” During the most recent of his military leaves, Minco faced a decline in business and decided to implement a reduction in force. The company initiated two rounds of layoffs. Milhauser was terminated as part of round two.
When he was laid off, Milhauser filed suit, arguing that “termination” is not a valid reemployment position under USERRA. The Eighth Circuit rejected this argument, concluding that the opposite is true: USERRA’s escalator position requirement includes “layoff” and “termination.” This conclusion is consistent with the language of the Act and Department of Labor regulations, which explicitly state that the escalator principle permits an employer to layoff or terminate an employee. As a result, if an employee would have been laid off at the time he is prepared to return to work from military leave, the employer is permitted to lay off the employee rather than reinstate him.