Failure to Accrue Sick Leave While Deployed Does Not Violate USERRA

A class action by United Airlines pilots claiming that they were denied sick-leave accrual while on military leave in violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA) was properly dismissed, the 7th U.S. Circuit Court of Appeals held.

From April 1, 2005, to 2010, United Airlines pilots who also served in the reserve components of the armed forces of the United States and were called periodically to active duty accrued sick time throughout their entire military leave. In contrast, Continental pilots who served the country in the same capacity accrued sick time only through the first 30 days of military leave during the same period.

In 2010, the two airlines began a merger process in which they first became wholly owned subsidiaries of United Continental Holdings and the separate bargaining agreements of each legacy airline continued to govern. Then, United and Continental merged into a single entity—United Airlines.

Nonetheless, the policies of the two legacy airlines continued in effect until United Airlines standardized the sick-time policy in 2014 to provide that pilots accrue sick time only during the first 90 days of military leave. United pilots who are actively employed, which includes those on sick leave or vacation—but not on military leave—accrue five hours of sick leave for each month up to a maximum of 1,300 hours. Sick leave is paid out only when a pilot is actually sick and is not paid out upon separation.

United Airlines hired the plaintiff in early 2000. On Sept. 16, 2009, United Airlines placed him on furlough, and he was hired by Continental on Jan. 24, 2012. He continued working at United Airlines through the merger process. Throughout the relevant period, he also held a commission as a lieutenant colonel in the Reserve Component of the United States Marine Corps. On Aug. 30, 2016, the plaintiff brought an action against United Airlines alleging violations of USERRA.

Count I alleged that United violated USERRA by denying sick-time accrual to pilots on military leave because a) sick time is a seniority-based benefit and thus should have continuously accrued or b) sick-time accrual was available to pilots on comparable periods of leave. Count II made the same allegations about vacation time; Count III addressed the same alleged violations with respect to pension payments.

The district court certified the case as a class action to include other pilots who worked at United from April 1, 2005, to the present who did not accrue sick time on periods of military leave and did not reach the maximum accrual level of 1,300 hours during their military leaves of absence or thereafter.

The parties moved for summary judgment as to Counts I and II, and the district court granted United's motion. The parties subsequently settled Count III. The plaintiff then appealed the dismissal of Count I.

On appeal, the 7th Circuit considered whether sick-time accrual was a seniority benefit of the pilots' employment. This determination hinged on whether it was a future-oriented benefit. The court determined that it was not future-oriented because, first, all employees earn the same amount of sick time as soon as they start working and, second, it could be used only when sick. This was supported by a U.S. Supreme Court decision under the Veterans' Reemployment Rights Act finding that vacation benefits were short-term compensation for work performed, and not a protected seniority right.

Sick leave could not be used for a longer vacation and was not paid out at termination. As such, it was not a reward for length of service, like pension rights. Rather, sick leave was awarded automatically and did not increase the longer employees worked there, making it a benefit of past labor performed.

The plaintiff had argued in the lower courts that sick leave should have accrued on military leaves because it accrued on jury duty and sick leave, which were similar to military leave. The district court disagreed, and the plaintiff abandoned this argument. The court thus upheld the dismissal of the plaintiff's claim.

Moss v. United Airlines Inc., 7th Cir., No. 20-3246 (Dec. 14, 2021).

Professional Pointer: Employers should design their benefits plans with USERRA in mind. Nevertheless, certain benefits that are not seniority-based, like sick leave, need not accrue on military leave in most instances.

Jeffrey Rhodes is an attorney with McInroy, Rigby & Rhodes LLP in Arlington, Va.