The California Court of Appeal recently held that a release of rights in a severance agreement does not bar claims arising from the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
The California Court of Appeal recently held that a release of rights in a severance agreement does not bar claims arising from the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). See Perez v. Uline, Inc. (12/6/07).
In this case, the plaintiff, Perez, was a Captain in the United States Marine Corps Reserves and was discharged the same day he returned to work from duty with the Reserves. The employer offered him a severance agreement, requesting that Perez execute a release in exchange for receipt of certain severance benefits. The release was sufficiently broad to encompass all potential claims brought by Perez. Perez contemplated seeking legal advice regarding the agreement, but ultimately executed the release without the benefit of legal counsel.
Subsequently, Perez sued Uline and three of its employees, asserting various claims, including claims for defamation, failure to pay overtime, wrongful termination and breach of contract. Perez’ wrongful termination and breach of contract claims were based on the theory that he was removed from his position solely because “he was apt to be called to active duty and was, in fact, absent for one week due to a military obligation.”
The trial court held that the severance agreement validly released all of Perez’ claims. Perez appealed and the Court of Appeal affirmed the trial court with regard to Perez’ claims for defamation and labor code violations. However, the Court of Appeal reversed as to Perez’ USERRA claims.
Reading the language of USERRA literally, the court noted that “a contract may not limit the protections of USERRA, which prohibits termination of employment based on membership in the military or performance of military service.” Thus, the court concluded that the severance agreement was not a valid waiver of Perez’ rights under USERRA.
Employers’ Bottom Line:
Just as the California legislature recently enacted legislation protecting the spouses of members of the military who request time off when their spouses are home from deployment, this decision illustrates the extent of protection provided to members of the military under USERRA. It is important for employers to recognize that a separation agreement waiving claims relating to an individual’s employment or termination may not bar claims brought under USERRA.
If you have any questions regarding USERRA, separation and release agreements in general, or any other topic related to employment law, please contact the Ford & Harrison attorney with whom you usually work or author of this Alert, Helene Wasserman, at hwasserman@fordharrison.com or 213-237-2403.
Helene is the host of the Employer Helpcast, which is a "one stop website" for both "nuts and bolts" employment law advice and insight into new legal developments affecting employers.
