In Porter v. Trans State Holdings, Inc., No. 1:23-CV-00263 (D. Colo. Nov. 7, 2024), a federal district court dismissed a Naval Reserve pilot’s Uniformed Services Employment and Reemployment Rights Act (USERRA) lawsuit alleging that the company denied him several promotional opportunities and avoided making certain contributions to his 401(k) based on anti-military animus. USERRA prohibits employers from discriminating and retaliating against employees or applicants because of their military status or military obligations. The court’s ruling is useful to employers because it explains how a company’s documented dedication to hiring veterans and supporting current service member employees can help defend against USERRA actions.

Background

The plaintiff worked for Trans States Airline, Inc. (TSA), a now defunct company formerly owned by Trans State Holdings, Inc. (TSH), from 2001 to early 2015, when he voluntarily resigned. Throughout his employment with TSA, the plaintiff was a member of the U.S. Navy Reserve and was mobilized multiple times, including a seven-month deployment overseas and a three-year assignment at the Pentagon. The plaintiff’s complaint alleged that anti-military motives led to TSA’s passing him over for several promotions throughout his career. He also alleged that TSA avoided making certain “make-up” contributions to his 401(k).

TSH argued it was entitled to summary judgment on four separate bases: (1) the plaintiff’s claims were barred by the doctrine of laches; (2) TSH was never the plaintiff’s employer, because TSH is not a successor-in-interest to TSA; (3) the plaintiff failed to establish a prima facie case of discrimination or retaliation under USERRA; and (4) the plaintiff’s claims concerning 401(k) contributions is moot because TSA had already corrected any error by making appropriate catch-up contributions in March 2019.

In granting summary judgment for the defendant, the district court concluded that the plaintiff had “not adduced any evidence remotely suggesting that his military status was a motivating or substantial factor” in the company’s decisions concerning his promotions and that the plaintiff had failed to “demonstrate any material fact issue to support his claim” that his employer failed to contribute to his 401(k)-retirement plan while he was on military leave. The court did not address TSH’s laches argument and found that a reasonable jury could find TSH was the plaintiff’s employer for purposes of USERRA liability.

Key Takeaways and Observations from Porter

1. The Value of a Company’s Pro-Military/Veteran Stance, Policies, and Programing

In discrimination claims under Title VII, showing that a company maintains policies and practices that support a protected class is typically given little weight in determining whether a lawsuit survives summary judgment. Not so, however, in the USERRA context. In emphasizing the lack of evidence of anti-military bias, the Porter court stressed that in fact the evidence demonstrated that the employer had taken a decidedly pro-military stance. For example, the company maintained a “Military Rotor Program” aimed at assisting military pilots in transitioning to employment in the commercial airline industry. The employer had won awards for its support of service members. In finding that the plaintiff failed to present evidence of anti-military bias, the court noted that the company’s voluntary 401(k) make-up contributions for employees serving in the military appeared to contradict this claim.

Employers should consider the value of maintaining and documenting pro-military policies as a means of avoiding and being prepared to defend against USERRA claims.. The Porter court concluded that a company’s showing of a strong and consistent pro-military/veteran stance is relevant to the legal sufficiency of a USERRA claim as a matter of law. Employers in all industries can consider bolstering their pro military stances by adopting similar policies or engaging in similar programs. For example, a company could become one of many partners with the U.S. Department of Defense in its SkillBridge military internship program, giving the company access to potential hires who are still on active duty for 180 days of training/apprenticeship at no cost to them. The SkillBridge program is not subject to wage and hour laws and employer participation does not create any federal contracting obligations.

2. Stray Remarks Relating to Military Service or Culture Do not by Themselves Support a Finding of USERRA Discrimination or Pretext

In making his claim the plaintiff cited a “smattering of disconnected, purportedly anti-military remarks” and attempted to “tie them together.” The court found that such a compilation of “stray remarks” did not establish a genuine issue of fact as to TSH’s purported discriminatory motives with respect to his non-selection for promotions.

The plaintiff focused on a few statements attributed to TSA. First, the plaintiff complained that at some point in his employment a supervisor stated that the plaintiff does “a lot of military duty.” With respect to this, the court found that the supervisor’s isolated remark was “insufficient to show that the plaintiff’s military status was a motivating factor in his non-selection for promotions” because there was evidence that other employees, including the supervisor, were promoted despite lengthy deployments and mobilizations. Importantly, the court pointed out that the comment was merely an “observation about the quantity of the plaintiff’s military duty” and that it was “made in the context of a personal conversation between the two men” made it less indicative of anti-military animus.

Second, the plaintiff pointed to a statement found in TSA’s 2013 Flight Operations Manual stating a captain should refrain from “[s]harp criticism and military type orders” because they “may only result in a breakdown of morale and create an inefficient halting of performance and future duties.” Here, the court pointed out that all this statement did was remark on the truism that in the civilian workplace, a “military style of leadership” may not be effective in managing civilian employees. The court found that the plaintiff provided no evidence that such a training sentiment could support “his conclusory proclamation” that TSA held discriminatory animus against his military record.

Finally, the court held that even if it were to assume that the plaintiff had carried his initial burden and shown that his military status was a motivating factor in TSA’s decision not to promote, he failed to present evidence that TSH’s legitimate independent reasons for passing on the plaintiff were pretextual. The court rejected plaintiff’s argument that alleged comments about the plaintiff’s fitness for promotion, leadership skills, and other negative traits were a pretext for TSA’s intentional discrimination and retaliation. The court held that the plaintiff’s subjective beliefs were not supported by nonconclusory, non-speculative evidence demonstrating an anti-military mindset by the defendant and thus were insufficient to avoid summary judgment. The court noted that the plaintiff had failed to put forward competent evidence to support his speculative contention that defendant’s proffered reasons were a pretext for discriminating against him for having taken military leave.

Benign comments that remark on the quantity of service an employee has, training materials or guidance that compare the way things are done in the military versus the civilian world, or even comments on the cultural differences found between the military and civilian world can be common in the civilian workplace. This is especially so in industries with high levels of veteran employment. While in USERRA litigation plaintiffs may try to turn such comments into “Exhibit A” to survive summary judgment, the Porter court rejected the tactic by weighing the particular allegations and applying common sense to them.

3. No Entitlement to 401(k) Plan Contributions

The plaintiff also alleged that TSH failed to make 401(k) plan contributions for a period when he was on active orders in the 2010s. Under USERRA, a person reemployed after military leave is generally entitled to accrued benefits.  One such accrued benefit could be 401(k) plan contributions from their employer, with the caveat that to receive the benefits the employee must pay make-up contributions within five years. Here, the court concluded that the plaintiff failed to provide any evidence showing that he requested to make up his missed contributions upon his return from military leave, or that he ever actually paid the plan any missed contributions. Based on this alone, the court ruled against the plaintiff on this count. 

But the court also pointed out that while having no legal obligation to make additional contributions under this set of circumstances, TSA voluntarily did so anyway.  The court pointed to this voluntary act as further evidence that TSA’s dealings with him were not motivated by an anti-military animus.

4. Statute of Limitations and Equitable Defenses

USERRA has no statute of limitations and expressly prohibits courts from applying a state statutory limitations period. However, many courts have acknowledged the doctrine of laches may bar stale USERRA claims despite the law’s lack of a statute of limitations.¹ In Porter, the defendant argued that plaintiff’s claims were barred by the doctrine of laches. The defendant pointed out that while the plaintiff claimed TSA had begun to violate his rights under USERRA 20 years ago, he waited until 2023 to file the lawsuit after having left the company in 2015. Even though the court did not address the defendant’s laches argument, practitioners should continue to look to the equitable defense of laches when analyzing USERRA claims.

5. Broad Definition of Employer Under USERRA

The court in Porter reinforced USERRA’s statutorily broad definition of “employer.” Specifically, the court found there was at least a genuine dispute regarding whether TSH was a joint employer of the plaintiff, such that summary judgment could not be defeated on that basis. But the court went further than that, at least suggesting that it was likely TSH would be found to be one of the plaintiff’s “employers” for purposes of USERRA. Citing to USERRA and its accompanying regulations the court noted that TSH’s role was not “purely ministerial in nature” due to the “intertwined operational interrelationship between TSH and TSA” as well as the employment-related responsibilities and control over potential employment opportunities TSH had.

Conclusion

This case highlights the importance of certain USERRA defenses such as being able to demonstrate a company’s dedication to both hiring veterans and supporting their current service members.