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Can Employees Be Required to Arbitrate USERRA Claims?

Due to the large numbers of Wisconsin men and women in military service, employers must be aware of their legal responsibilities under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) and accompanying regulations issued by the U.S. Department of Labor in January 2006. USERRA provides service members with generous and complex reemployment rights and protection from discrimination and retaliation in employment. USERRA also preempts any State law or contract that "reduces, limits, or eliminates in any manner any right or benefit" provided by the law. Despite this broad preemptive provision, the United States District Court of Appeals for the Fifth Circuit recently held that an employer may require an employee to arbitrate a USERRA claim under an arbitration provision agreed to by the employee in an individual employment contract. Garrett v. Circuit City Stores, Inc., 2006 US App LEXIS 11755 (5th Cir. 2006).

The Garrett ruling was at odds with the Department of Labor’s interpretation and decisions of several federal district courts. Although not binding in Wisconsin (which is in the Seventh Circuit), the Garrett decision may be persuasive authority should such a case arise in Wisconsin. The ruling left open several legal issues, including whether arbitration agreements in collective bargaining agreements, or in certain types of individual contracts, would be enforceable. Therefore, employers should be cautious and seek legal counsel before attempting to secure and enforce such agreements.

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