Arbitration of USERRA Claims

For the first time in a while, courts are having the opportunity to construe the terms of the Uniformed Services Employment and Reemployment Rights Act of 1994. Because USERRA has a structure somewhat different than the more common federal discrimination statutes it poses increase risks and correspondingly greater obligations on employers who have employees on military leave.

Answering one of the open questions, the Sixth Circuit today held in this decision that the terms of USERRA did not clearly prohibit arbitration of USERRA claims. That means that general arbitration agreements can lawfully mandate arbitration of USERRA and other claims.

Drafting a valid arbitration clause is not simple so employers should consult with counsel before deciding to impose one on employees. Courts have invalidated arbitration clauses for a number of reasons such as because they slanted too much in the employer's favor, imposed a disproportionate cost on the employee to invoke it, or did not permit the arbitrator to award full relief authorized by the statute. Properly drafted, however, an arbitration clause will be enforced.