Agreement to Arbitrate USERRA Discrimination Claim is Enforceable

In Landis v. Pinnacle Eye Care, LLC, the Sixth Circuit Court of Appeals recently held that an agreement to arbitrate claims is enforceable under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Although the Sixth Circuit does not have jurisdiction over the courts of Georgia, and a lower-level federal court in Georgia has held to the contrary, the Eleventh Circuit has not yet weighed in on the issue, so the case may be relevant if the issue reaches the Eleventh Circuit.

In the case, Dr. Timothy Landis signed an employment agreement in which he agreed to resolve all disputes related to the agreement through arbitration. During his employment, he was called to military duty in Afghanistan as a member of the Indiana National Guard. Although he contended that the parties had amended the employment agreement prior to his departure for Afghanistan, there was no formal amendment to the agreement. On his return from active duty, the employer refused to honor the alleged revised agreement, demoted Landis, and threatened to fire him if he had any future involvement in the military.

In response, Landis filed an employment discrimination claim under the USERRA, claiming that his employer had discriminated against him based on his military service. The lower court granted the employer’s motion to stay the case and ordered that it be arbitrated based on the arbitration clause contained in the employment agreement, holding that the USERRA did not preempt the arbitration clause.

On Landis’ appeal, the court first noted that United States Supreme Court has long held that statutory claims are generally subject to being arbitrated unless Congress has clearly expressed its intention to preclude arbitration, and that the party opposing arbitration has the burden of showing a waiver by Congress.

Analyzing the USERRA and its legislative history, the court found that there is nothing that indicates that Congress intended to limit the applicability of arbitration to disputes under the USERRA. Although Section 4302(b) of the statute does contain a provision that states that the law “supersedes any state law . . . contract, agreement, policy, plan, practice or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or receipt of any such benefit,” the court concluded that because this provision does not mention arbitration, the statute does not preclude arbitration.

Frankly, we believe the decision in the Georgia federal district court case of Breletic v. Caci, Inc.-Federal, is a much better reading of the USERAA. In Breletic, the Court held that Section 4302(b), along with some language in the statute’s legislative history, reveal that the “USERRA preempts arbitration agreements purportedly covering claims arising under the USERRA.” Should the issue reach the Eleventh Circuit, we’ll be on it for you.