Settlement Can Waive USERRA Rights

In a case of first impression, Landers v. Dept. of the Air Force, 2011 MSPB 99 (November 30, 2011), the Merit Systems Protection Board has held that a federal employee may waive rights to pursue a claimed violation of the Uniform Services Employment and Reemployment Rights Act (USERRA) in a settlement agreement that contained a waiver of all employment disputes. USERRA protects employees from discrimination on account of veterans' status. The decision by the Board was unanimous.

In Landers, the employee filed a request for corrective action under USERRA asserting that between 1980 and 2001 his agency, the Air Force, improperly charged him with military leave on nonwork days. The agency filed a motion to dismiss Landers's case asserting that, in a prior 2006 settlement of an EEO case in federal district court, Landers agreed to release any and all claims between him and the agency based on any cause of action occurring up to and including the date of the settlement agreement. The agency argued that Landers voluntarily and knowingly waived his right to file the current claim because the agency's alleged violation of his USERRA rights predated the 2006 settlement. In response, Landers argued that the claims resolved in the settlement agreement had nothing to do with his USERRA claim, and further that employees do not have the ability to waive substantive USERRA rights under a provision in USERRA codified as 38 U.S.C. § 4302. The Board rejected Landers' argument.

The Board began its analysis by noting that it will consider a settlement agreement reached outside of the Board proceeding to determine the effect of that settlement agreement on an action before the Board and any waiver of Board appeal rights. The validity of a settlement agreement may be challenged if the employee believes that the agreement was unlawful, involuntary, or resulted from fraud or mutual mistake. The Board noted that an employee may also challenge the enforceability of any waiver of Board appeal rights.

The Board agreed with Landers that USERRA has a specific provision dealing with its relation to other laws and agreements. Specifically, 38 U.S.C. § 4302 states that USERRA "supersedes any state law, contract, agreement . . . that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter." Therefore, the issue was whether or not Landers's prior settlement agreement ran afoul of section 4302 in that the settlement purported to eliminate or limit his ability to pursue a violation of his USERRA rights. The Board answered that question in the negative.

The Board reviewed some federal appellate court decisions that have interpreted 38 U.S.C. section 4302 and found that those courts held that section 4302 was only meant to prohibit the limitation on USERRA's substantive rights, and not procedural rights. For example, courts have approved contract provisions where employees agreed to arbitrate their claims rather than take such claims into federal court. In analogizing the court decisions to Landers's case, the Board found that the settlement agreement was exempted from the operation of section 4302. The purpose of section 4302 was to prevent veterans from waiving rights under USERRA in exchange for benefits that were not more beneficial than their USERRA rights.

In this case, while the waiver language in the settlement agreement did not explicitly state that it covered claims under USERRA, or claims based on veteran status, the Board found that the waiver language was clear and unambiguous to inform Mr. Landers that he was waiving "all claims" arising under any federal law for any agency action up to the date of settlement. Further, the settlement agreement involved a payment of a significant amount of money, including other benefits such as restoration of leave and a within-grade increase.

Under these circumstances, the Board found that there was enough evidence to find that Landers signed the settlement agreement with the belief that the benefits he was obtaining under the settlement were more beneficial than the preservation of his rights to bring an additional claim against the agency under USERRA. Accordingly, the Board held that 38 U.S.C. § 4302 did not invalidate Landers's 2006 settlement agreement with the agency and that Landers waived his right to bring an action against the agency for violations of USERRA which would have occurred up to the date of settlement.

* This information is provided by the attorneys at Passman & Kaplan, P.C., a law firm dedicated to the representation of federal employees worldwide. For more information on Passman & Kaplan, P.C., go to http://www.passmanandkaplan.com/ .