Milhauser v. Minco Products, Inc.
Filing
90
ORDER denying 81 Motion for Judgment as a Matter of Law; denying 81 Motion for New Trial (Written Opinion). Signed by Judge Joan N. Ericksen on March 2, 2012. (slf)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Douglas Milhauser,
Plaintiff
Civil No. 09-3379 (JNE/JJG)
v.
ORDER
Minco Products, Inc.,
Defendant.
On September 16, 2011, a jury found Defendant Minco Products, Inc. (“Minco”) not
liable to Plaintiff Douglas Milhauser on Milhauser’s claims under the Uniformed Services
Employment and Reemployment Rights Act (“USERRA”), 38 U.S.C. § 4312 (2006). Milhauser
claimed that Minco violated USERRA by discriminating against him and by failing to properly
reemploy him after he returned from military leave. The case is now before the Court on
Milhauser’s post-trial Motion for Judgment as a Matter of Law (JMOL) or, alternatively, for a
New Trial on the claim that Minco failed to reemploy Milhauser in the appropriate position in
June 2009.
I.
BACKGROUND
Minco manufactures flexible circuits, sensors and heaters for use in the automotive,
telecommunications, medical and defense industries. In 2006, Minco hired Milhauser to work as
a Maintenance Technician in Minco’s Maintenance Department. At the time Minco hired
Milhauser, it knew Milhauser was a member of the Naval Reserves. Milhauser then joined the
Air Force Reserves. During his employment with Minco, Milhauser took three military leaves.
His first leave was for two weeks in March 2007. His second leave began in March 2008 and
lasted ten months. Milhauser’s third leave began in March 2009, and ended on June 3, 2009. He
was terminated immediately upon his return in June 2009.
1
Milhauser asserted four claims in this case. First, he claimed that Minco discriminated
against him after his second military leave in January 2009, when he supposedly returned to a
position with lesser job duties and status. Second, he claimed that Minco discriminated against
him after his third military leave, when he returned in June 2009 and was terminated.1 Third, he
claimed that Minco failed to reemploy him in the appropriate position after his second military
leave. Fourth, he claimed that Minco failed to reemploy him in the appropriate position after his
third military leave in June 2009.2
A jury trial began on September 12, 2011. Minco presented evidence that during
Milhauser’s employment, his supervisors received several complaints about his performance.
Some of these complaints related to Milhauser’s ability to perform his job; other complaints
related to Milhauser’s attitude and behavior. Minco also presented evidence that in 2008-2009, it
experienced a severe decline in customer orders. This decline led Minco to take several steps to
reduce its expenses and maintain its economic viability, including cost-cutting measures, a hiring
freeze, a salary freeze, pay cuts, mandatory reduction of hours, and eventually terminations. In
March 2009, Minco terminated eighteen employees. In June 2009, Minco terminated an
additional thirty-two employees. Milhauser was one of those employees.
John Toohey, Minco’s Plant Services Manager, testified that in the spring of 2009, he
was told to identify four employees who would be removed from Minco’s Maintenance
Department as part of the reduction in force. He explained that he selected the four employees
based solely on their abilities, skill sets, and versatility. Mr. Toohey testified that he initially
1
These first two claims are the “discrimination” claims. The next two claims are the
“reemployment” claims.
2
Milhauser’s post-trial motion only addresses his fourth claim that Minco failed to
properly reemploy him in June 2009.
2
believed that he was prohibited from considering Milhauser as a candidate for termination
because of Milhauser’s military status. However, Human Resources then advised him that
Milhauser could be considered for termination just like any other maintenance employee. Mr.
Toohey testified that because of Milhauser’s limited skills and lack of unique expertise,
Milhauser should be one of the four employees removed from the Maintenance Department.
Minco also presented evidence that it did not choose to offer Milhauser a position in a
different department—the Production Department—because of Milhauser’s performance and
behavior problems. Sherri Himmelgarn, a manager in the Production Department, testified that
Milhauser often took too long to complete a task, stating that “[s]omething that should have been
done in ten minutes probably took more like an hour to be done.” She stated that Milhauser
often spent more time talking than working. She also testified that on several occasions,
Milhauser’s “repairs” resulted in the equipment becoming completely unusable. Moreover, Ms.
Himmelgarn was displeased by Milhauser’s apathetic response when confronted with his faulty
repairs. She testified that employees in her department started asking engineer techs to work on
their equipment just so they could avoid having Milhauser work on it. Her department did not
experience similar problems with or complaints regarding the other individuals who were
selected for the open positions in the Production Department. At a meeting with the other
managers, Ms. Himmelgarn informed them of her issues with Milhauser’s performance, told
them that she would not trust him with any of her equipment, and that she would not recommend
him for a position in the department. Milhauser was subsequently not offered one of the open
positions in the Production Department.
At the close of Minco’s case, Milhauser moved for JMOL on his claim that Minco failed
to reemploy him upon his return from military leave in June 2009, in violation of 38 U.S.C.
3
§ 4312.3 The parties had stipulated that Milhauser satisfied the prerequisites for reemployment
under § 4312(a). Milhauser contended that he was absolutely entitled to a job upon his return
from military leave, regardless of Minco’s changed circumstances. He argued that Minco failed
to prove its affirmative defense that reemployment was “impossible or unreasonable,” because,
according to Milhauser, an employer’s economic problems and resulting reductions in force do
not make reemployment “impossible or unreasonable” under § 4312(d). Specifically, Milhauser
argued that in the absence of a seniority system, an employer cannot, under any circumstances,
terminate a returning veteran, even as part of a reduction in force. The Court denied Milhauser’s
motion and submitted the claim to the jury.
On September 16, 2011, the jury asked the following question regarding Jury Instruction
number 8:
Instruction # 8
Can you please clarify USERRA reemployment in the escalator position
This is confusing in that it states 2 completely opposite possibilities—the same
position had military leave not been taken or demotion, transfer lay off or
termination
Is a layoff a possible reemployment position?
The Court provided the jury with the following response:
The escalator position is the position that the returning person would have been in
if they had not taken the leave. Please refer to the explanation of the principle of
the escalator position contained in instruction no. 8.
I hope this is helpful to you.
Jury Instruction Number 8 read as follows:
When a member of the uniformed services returns from a service of 90
days or less, USERRA requires that the employer promptly reemploy him in a
3
Minco moved for JMOL on the two discrimination claims—this motion was denied.
4
particular position. There are several possible reemployment positions. It is your
responsibility to determine, first, the applicable reemployment position and,
second, whether the employer employed the plaintiff in that position.
First, USERRA requires reemployment in the position the employee
would, with reasonable certainty, have been in had his employment not been
interrupted by the military service. This is called the escalator position. The
principle is that the employee should be in the same position he would have been
in had he not taken military leave, no better and no worse. Depending on what
happened during the employee’s absence, the escalator position might be a
promotion, demotion, transfer, lay-off, or termination. It is up to you to determine
what position Mr. Milhauser would have been in had he not taken military leave.
For purposes of determining the escalator position, “reasonable certainty” does
not mean absolute certainty, but rather it means a high probability. In addition,
Mr. Milhauser must be qualified to perform the duties of this position. Qualified,
for these purposes, means able to perform the essential elements or tasks of the
position. If he is not qualified, Minco has an obligation to use reasonable efforts
to qualify him for the position.
If Mr. Milhauser is not and cannot become qualified for the escalator
position after reasonable efforts by Minco, then he is entitled to reemployment in
any other position which is the nearest approximation of that position, provided
he is qualified to perform the position.
It is Mr. Milhauser’s burden to show that Minco failed to reemploy him in
the escalator position or in a position which was the nearest approximation of the
escalator position.
On September 16, 2011, the jury returned a verdict finding that Milhauser failed to prove
by a preponderance of his evidence either of his discrimination claims. The jury also found that
Milhauser did not prove by a preponderance of the evidence that Minco failed to reemploy him
in the appropriate position as required by USERRA after his returns from leave in both January
2009 and June 2009. Finally, the jury found that Minco failed to prove by a preponderance of
the evidence that its circumstances had so changed as to make Milhauser’s reemployment
impossible or unreasonable. Milhauser’s now moves for JMOL, or alternatively, for a new trial,
regarding his claim that Minco violated USERRA by failing to reemploy him after he returned in
June 2009. Milhauser contends that the jury was improperly instructed on the law. Specifically,
Milhauser argues that termination cannot be a legitimate “position of employment” under
5
USERRA and that Jury Instruction No. 8 incorrectly allowed the jury to believe that termination
was a possible reemployment position.
II.
DISCUSSION
A. Legal Standard
Rule 50(a)(1) provides:
If a party has been fully heard on an issue during a jury trial and the court
finds that a reasonable jury would not have a legally sufficient evidentiary basis to
find for the party on that issue, the court may: (A) resolve the issue against the
party; and (B) grant a motion for judgment as a matter of law against the party on
a claim or defense that, under the controlling law, can be maintained or defeated
only with a favorable finding on that issue.
A party may renew a Rule 50 motion after trial. Fed. R. Civ. P. 50(b). In ruling on a
renewed motion when a verdict has been returned, the court may allow the judgment to stand,
order a new trial, or direct entry of judgment as a matter of law. Fed. R. Civ. P. 50(b)(1)-(3).
When considering a post-trial motion for judgment as a matter of law, the court determines
“whether the record contains sufficient evidence to support the jury's verdict.” Bass v. Gen.
Motors Corp., 150 F.3d 842, 845 (8th Cir.1998). The court views the evidence in the light most
favorable to the non-moving party and grants the non-moving party the benefit of all reasonable
inferences. Canny v. Dr. Pepper/Seven–Up Bottling Group, Inc., 439 F.3d 894, 899–900 (8th
Cir.2006). A judgment as a matter of law is appropriate when “there is no legally sufficient
evidentiary basis for a reasonable jury to find for the party on that issue.” Fed. R. Civ. P.
50(a)(1); see also Canny, 439 F.3d at 899–900.
Under Rule 59(a), “[t]he court may, on motion, grant a new trial on all or some of the
issues—and to any party—... for any reason for which a new trial has heretofore been granted in
an action at law in federal court.” Fed. R. Civ. P. 59(a). “The decision whether to grant a new
trial lies within the sound discretion of the district court.” Brown v. Cox, 286 F.3d 1040, 1046
6
(8th Cir. 2002). A new trial is justified if the verdict is “against the great weight of the
evidence,” Butler v. French, 83 F.3d 942, 944 (8th Cir. 1996), and a new trial should be granted
only where it is necessary to prevent a miscarriage of justice. Bass, 150 F.3d at 845; McKnight
v. Johnson Controls, Inc., 36 F.3d 1396, 1400 (8th Cir.1994). “In determining whether a verdict
is against the weight of the evidence, the trial court can ... weigh the evidence, disbelieve
witnesses, and grant a new trial even where there is substantial evidence to sustain the verdict.”
White v. Pence, 961 F.2d 776, 780 (8th Cir.1992) (quotation marks omitted). “The court should
reject a jury's verdict only where, after a review of all the evidence giving full respect to the
jury's verdict, the court is left with a definite and firm conviction that the jury has erred.” Ryan
v. McDonough Power Equip., Inc., 734 F.2d 385, 387 (8th Cir.1984). A new trial may also be
ordered if the court erred in instructing the jury on the applicable law. T.H.S. Northstar Assocs.
v. W.R. Grace & Co.-Conn., 860 F. Supp. 640, 650 (D. Minn. 1994), vacated on other grounds,
66 F.3d 173 (8th Cir. 1995). The jury instructions are to be considered in their entirety to
determine whether the charge fairly and adequately submits the issues to the jury. Laubach v.
Otis Elevator Co., 37 F.3d 427, 429 (8th Cir. 1994). Erroneous jury instructions may be grounds
for a new trial if “the errors misled the jury or had a probable effect on the jury’s verdict.” Goss
Int’l Corp. v. Man Roland Druckmaschinen Aktiengesellschaft, 434 F.3d 1081, 1093 (8th Cir.
2006) (internal quotation marks omitted).
B. USERRA
USERRA entitles returning servicemembers to certain reemployment rights, to ensure
that they are not penalized for their military service. Under USERRA, “any person whose
absence from a position of employment is necessitated by a reason of service in the uniformed
services shall be entitled to the reemployment rights and benefits . . . of this chapter” if the
7
person meets certain eligibility requirements.4 38 U.S.C. § 4312(a). However, “[a]n employer is
not required to reemploy a person under this chapter if . . . the employer’s circumstances have so
changed as to make such reemployment impossible or unreasonable.” Id. § 4312(d)(1)(A). “For
example, an employer may be excused from reemploying the employee where there has been an
intervening reduction in force that would have included that employee.” 20 C.F.R. § 1002.139.5
The employer has the burden of proving impossibility or unreasonableness. 38 U.S.C.
§ 4312(d)(2).6
If an employer fails to prove impossibility or unreasonableness, then USERRA requires
that the returning employee be “promptly reemployed in a position of employment.” Id.
§ 4313(a). The appropriate reemployment position depends on the length of the employee’s
service. Where the period of service was for less than ninety-one days, the employee must be
placed “in the position of employment in which the person would have been employed if the
continuous employment of such person with the employer had not been interrupted by such
service,” as long as the employee is qualified or can become qualified for this position with
reasonable efforts by the employer. Id. § 4313(a)(1)(A). This position is called the “escalator
position.” If the employee is not qualified for the escalator position, the employee must be
placed in his pre-service position, as long as he is qualified or can become qualified with the
employer’s reasonable efforts. Id. § 4312(a)(1)(B). Finally, if the employee is not qualified for
either the escalator or pre-service position, he must be placed in any other position he is qualified
4
The parties stipulated that Milhauser met these eligibility requirements.
5
Congress authorized the Department of Labor to prescribe regulations implementing
USERRA. 38 U.S.C. § 4331; Rademacher v. HBE Corp., 645 F.3d 1005, 1012 (8th Cir. 2011).
6
This is the affirmative defense provision.
8
to perform and that most nearly approximates the escalator or pre-service position. Id.
§ 4313(a)(4).
The escalator position is the job position the employee “would have attained with
reasonable certainty if not for the absence due to uniformed service.” 20 C.F.R. § 1002.191.
“Reasonable certainty” is a “high probability,” not an absolute certainty. Id. § 1002.213. “The
principle behind the escalator position is that, if not for the period of uniformed service, the
employee could have been promoted (or, alternatively, demoted, transferred, or laid off) due to
intervening events.” Id. § 1002.191. In some cases, application of the escalator principle may
result in adverse consequences when the employee is reemployed.
The Act does not prohibit lawful adverse job consequences that result
from the employee’s restoration on the seniority ladder. Depending on the
circumstances, the escalator position may cause an employee to be reemployed in
a higher or lower position, laid off, or even terminated. For example, if an
employee’s seniority or job classification would have resulted in the employee
being laid off during the period of service, and the layoff continued after the date
of reemployment, reemployment would reinstate the employee to layoff status.
Similarly, the status of the reemployment position requires the employer to assess
what would have happened to such factors as the employee’s opportunities for
advancement, working conditions, job location, shift assignment, rank,
responsibility, and geographical location, if he or she had remained continuously
employed. The reemployment position may involve transfer to another shift or
location, more or less strenuous working conditions, or changed opportunities for
advancement, depending upon the application of the escalator principle.
20 C.F.R. § 1002.194.
1. Termination as a Possible “Position of Employment” Under USERRA
Minco has never claimed that Milhauser was not qualified for the escalator position.
Rather, Minco asserted at trial, and continues to argue now, that because it was undergoing a
company-wide reduction in force, and because of Milhauser’s relative lack of skills, previous
poor work performance and behavior issues, Milhauser would have been included in that
reduction even had he remained continuously employed. Thus, Minco argues, the escalator
9
position in this case was termination—and Minco properly “reemployed” Milhauser in that
position. Milhauser, however, claims that “termination is not, under any logical analysis, a
‘position of employment,’” but is instead “a position of non-employment.” Pl.’s Reply Mem. 2.
He believes that he was absolutely entitled to be rehired as a Maintenance Technician when he
returned from leave.7
When interpreting any statute, courts begin with the plain language. Jiminez v.
Quarterman, 555 U.S. 113, 118 (2009). “[W]hen the statutory language is plain, we must
enforce it according to its terms.” Id. USERRA requires that the returning servicemember be
reemployed “in the position of employment in which the person would have been employed if
the continuous employment . . . had not been interrupted” by the military service. 38 U.S.C.
§4313(a)(1)(A). Milhauser argues that the plain meaning of “position of employment”
necessarily means that termination cannot be a reemployment position. Contrary to Milhauser’s
argument, however, the regulations implementing USERRA explicitly state that under some
circumstances, termination may be a “position of employment.” See, e.g., 20 C.F.R. § 1002.191
(“The principle behind the escalator position is that, if not for the period of uniformed service,
the employee could have been promoted (or, alternatively, demoted, transferred, or laid off) due
to intervening events.”); 20 C.F.R. § 1002.194 (“Depending on the circumstances, the escalator
7
During trial, Milhauser argued that, in the alternative, he was at least entitled to a job in
the Production Department. The Court rejected that argument, finding nothing in the case law
supporting his argument that an employer must place the returning employee in any other
available position, regardless of whether the employee would have attained that position but for
his leave. Milhauser now argues that USERRA required his reemployment in the position of
Maintenance Technician. The Court, therefore, will not address Minco’s decision not to offer
Milhauser a job in its Production Department.
10
position may cause an employee to be reemployed in a higher or lower position, laid off, or even
terminated.”).8
Further, as Minco notes in its brief, Milhauser’s interpretation requires the Court to read
the statute as saying that the returning employee must be reemployed “in the position of
employment in which the person would have been employed if the continuous employment . . .
had not been interrupted, unless that position would be discharge.” Courts must “refrain from
embellishing statutes by inserting language that Congress has opted to omit.” SEC v. Zahareas,
272 F.3d 1102, 1106-07 (8th Cir. 2001) (internal quotation marks omitted). The plain language
of the statute does not indicate that the employee cannot be demoted, laid off, or terminated—it
only requires that the returning servicemember be reemployed in the same position he would
have been in had he not taken military leave. See 38 U.S.C. §4313(a)(1)(A); Clegg v. Ark. Dep’t
of Correction, 496 F.3d 922, 930 (8th Cir. 2007) (stating that USERRA “is violated only if [the
employee] was not reemployed in the position []he would have been in had []he not taken
military leave”).
Not only is termination a possible position of reemployment, it can sometimes be a
required position of reemployment. For example, in Derepkowski v. Smith-Lee Co., Inc., 371 F.
Supp. 1071 (E.D. Wis. 1974), the court found that an employer may not place a returning
servicemember in an available employment position when the escalator position was termination.
In that case, during the plaintiff employee’s military leave, the defendant employer transferred its
operations from Milwaukee to New York. Id. at 1071. Some employees were terminated at the
time of the transfer and were paid severance benefits. Id. Upon the employee’s return, he was
8
Milhauser argues that “[n]owhere in the applicable regulation, the statute or case law is
‘discharge’ identified as a possible ‘escalator position.’” Pl.’s Reply Mem. 6. While the term
“discharge” is not used, § 1002.194 clearly provides that “termination” is a possible escalator
position.
11
offered a position in the New York operation, but was not offered termination with severance
benefits. Id. The court concluded that the employer was obligated “to restore the plaintiff to the
‘status’ he would have enjoyed had he been present in the defendant’s employ rather than in
military service—the ‘status’ being that of a terminated employee eligible for severance pay.”
Id. at 1072. Thus, the employer was obligated to give the returning employee the same
opportunity he would have had if he had not been absent—even if that “opportunity” was
termination.
Contrary to Milhauser’s argument, it is clear that in some cases, termination is a possible
reemployment position. Milhauser appears to concede this point by arguing that termination is
only appropriate in cases involving seniority ladders. Therefore, the question remains as to
under what circumstances can termination be a possible position of employment under
USERRA. Milhauser argues that the only situation in which application of the escalator
principle may result in an adverse consequence upon reemployment is when a seniority ladder is
implicated; no such seniority ladder was involved here. Because Milhauser was not restored on a
seniority ladder, he asserts that he had an absolute right to reemployment in some position,
regardless of whether or in which position he would have been employed but for his military
leave. Minco contends that adverse consequences may occur even in the absence of a seniority
ladder.
Looking first at the plain language of the statute, section 4313(a)(1)(A) requires that the
returning employee be placed “in the position of employment in which the person would have
been employed if the continuous employment of such person with the employer had not been
interrupted by such service.” See 38 U.S.C. § 4313(a)(1)(A). The position must be determined
with “reasonable certainty.” 20 C.F.R. § 1002.191; Id. § 1002.213 (explaining that “reasonable
12
certainty” is a “high probability,” not an absolute certainty). The statutory provision makes no
reference to seniority, nor does it explain what factors a jury can or cannot consider when
determining in which position it is reasonably certain the returning veteran would have been
employed had he not taken leave.9 The plain language provides no indication that an
employee’s “position of employment” depends solely on the presence of a seniority ladder.
Milhauser relies heavily on 20 C.F.R. § 1002.194, which provides, in part:
The Act does not prohibit lawful adverse job consequences that result
from the employee’s restoration on the seniority ladder. Depending on the
circumstances, the escalator position may cause an employee to be reemployed in
a higher or lower position, laid off, or even terminated. For example, if an
employee’s seniority or job classification would have resulted in the employee
being laid off during the period of service, and the layoff continued after the date
of reemployment, reemployment would reinstate the employee to layoff status.
This regulation does not say that restoration on a seniority ladder is the only situation in
which adverse consequences may occur. Milhauser argues that if adverse consequences are
permissible in cases not involving seniority ladders, the first sentence of § 1002.194 (“[t]he Act
does not prohibit lawful adverse job consequences that result from the employee’s restoration on
the seniority ladder”) would be superfluous. But if adverse consequences are permissible only in
cases involving seniority ladders, then the phrase “or job classification” might be rendered
meaningless.10 It does not appear that this regulation purports to be an exhaustive list of
situations in which USERRA permits adverse job consequences. Further, 20 C.F.R. § 1002.191,
9
Notably, other provisions of USERRA do explicitly refer to seniority. See, e.g., 38
U.S.C. § 4313(a)(2)(A) (providing that in the case of a military leave longer than ninety days, the
returning veteran must be put in the position he would have otherwise been in “or a position of
like seniority, status and pay”); Id. § 4313(b)(2) (providing that the returning servicemember be
reemployed “with full seniority”). “[W]here Congress includes particular language in one
section of a statute but omits it in another . . . , it is generally presumed that Congress acts
intentionally and purposely in the disparate inclusion or exclusion.” Keene Corp. v. United
States, 508 U.S. 200, 208 (1993) (quoting Russello v. United States, 464 U.S. 16, 23 (1983)).
10
It is unclear to the Court what exactly is meant by “job classification” in this context.
13
which describes the position to which the returning employee is entitled, explains that “[t]he
principle behind the escalator position is that, if not for the period of uniformed service, the
employee could have been promoted (or, alternatively, demoted, transferred, or laid off) due to
intervening events.” This regulation makes no reference to seniority ladders, and there is no
reason for this Court to equate “intervening events” with “seniority ladder.” “In interpreting
statutory text, we ordinarily presume that the use of different words is purposeful and evinces an
intention to convey a different meaning.” Abbott v. Abbott, 130 S. Ct. 1983, 2003 (2010);
Russello v. United States, 464 U.S. 13, 23 (1983) (“We refrain from concluding here that the
differing language in the two subsections has the same meaning in each. We would not presume
to ascribe this difference to a simple mistake in draftsmanship.”).11
Further, the Department of Labor specifically addressed section 1002.194 and concluded
that factors other than seniority can also adversely affect the reemployment position. See
Uniformed Services Employment and Reemployment Rights Act of 1994, as Amended, 70 Fed.
Reg. 75246, 75273 (Dec. 19. 2005). The initial proposed regulation stated,
Depending on your circumstances, your seniority rank may cause
you to be reemployed in a higher or lower position, laid off, or even
terminated. For example, if your seniority would have resulted in your
being laid off during the period of service, and the layoff continue after the
date of your reemployment, your reemployment would reinstate you to
layoff status.
Regulations Under the Uniformed Services Employment and Reemployment Rights Act of 1994,
as Amended, 69 Fed. Reg. 56266, 56296 (proposed Sept. 20, 2004) (emphasis added). In
11
USERRA’s legislative history is also of little assistance. It provides that the only
position guaranteed upon the servicemember’s return is the position he would have attained, with
reasonable certainty, but for the absence for military service. H.R. Rep. No. 103-65, 1994
U.S.C.C.A.N. 2449, 2463-64 (1993). “This could be the same position or a higher, lower, or
lateral (e.g., a transfer) position or even possibly a layoff or severance status, depending on what
has happened to the employment situation in the servicemember’s absence.” Id. (emphasis
added).
14
response to a commenter, who suggested that there are “escalator-based” factors other than
seniority, such as job location, job classification, or shift assignment, which may affect the
reemployment position, the Department revised the section so that these two sentences were not
“too narrowly drawn.” 70 Fed. Reg. 75273. Thus, contrary to Milhauser’s argument, section
1002.194 was specifically revised so as to not be limited only to situations involving seniority
ladders.
Neither the statute itself nor the regulations lead to the conclusion that adverse
consequences may only occur by way of restoration on a seniority ladder. The regulations, in
fact, lead to the opposite conclusion. Thus, the Court finds Milhauser’s argument unavailing.
The Court notes, however, that many of the cases in which the escalator principle has been
analyzed seem to involve either seniority ladders or collective bargaining agreements. See, e.g.,
Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 284-85 (1946) (involving a layoff
based on seniority and explaining that a returning employee “does not step back on the seniority
escalator at the point he stepped off” but instead “steps back on at the precise point he would
have occupied had he kept his position continuously during the war”); Derepkowski v. Smith-Lee
Co., Inc., 371 F. Supp. 1071 (E.D. Wis. 1974); McKinney v. Missouri-Kansas-Texas R. Co., 357
U.S. 265 (1958); Goggin v. Lincoln St. Louis, 702 F.2d 698, 701 (8th Cir. 1983). The Court
could not find, nor did the parties cite, cases in which the escalator principle was applied in an atwill employment context when layoffs or terminations were involved. Thus, it is not clear to the
Court how, if at all, the escalator principle applies in such a situation.
Although Milhauser’s only argument has been that seniority status is the sole factor that
may result in adverse consequences—an argument which the regulations squarely reject—the
15
Court nevertheless explored beyond the arguments made and case law provided by the parties. 12
While the law regarding the exact application of the escalator principle is somewhat unclear, it
appears possible that the escalator principle in general—whether it is an up-escalator entitling the
employee to promotions or benefits, or a down-escalator resulting in an adverse consequence—
may have been intended only to apply in situations in which the change in the employee’s
position or status would have occurred without any exercise of discretion by the employer. The
Court again notes that Milhauser has not made this argument—instead he argues only that
seniority is the only situation which permits application of the escalator principle. But there are
other non-seniority situations in which an employee’s position or status may change during his
military leave. For example, in Levine v. Berman, 178 F.2d 440, 443 (7th Cir. 1949), the
Seventh Circuit noted that a returning veteran may be restored to a salesman position with lower
commissions, as long as all other salesmen also received lower commissions. “In other words,
[plaintiff] was entitled to be restored to the same character of employment, including pay, which
would have been his had he not entered the service, and respondents had a right at any time to
reduce his pay or commission in the same manner as though he had been in continuous
employment, provided such reduction applied to all other positions of the same or similar
nature.” Id. at 443 (emphasis added). A reduction in commissions is certainly an “adverse
consequence,” and such a reduction is permissible even when “[n]o question of seniority is
12
This case law includes cases involving USERRA’s predecessor statutes. “Congress
passed USERRA in 1994 to ‘clarify, simplify, and, where necessary, strengthen the existing
veterans’ employment and reemployment rights provisions.’” Woodard v. N.Y. Health & Hosps.
Corp., 554 F. Supp. 2d 329, 347 (E.D.N.Y. 2008) (citation omitted). Prior to USERRA’s
enactment, a large body of case law developed under earlier “[f]ederal laws protecting veterans’
employment and reemployment rights.” 20 C.F.R. § 1002.2. Judicial interpretations of those
laws “remain[] in full force and effect, to the extent [they are] consistent with USERRA.” Id.
16
involved.” Levine v. Berman, 161 F.2d 386, 387 (7th Cir. 1947).13 Levine would suggest that a
returning servicemember may suffer from an adverse consequence even when no issues of
seniority are involved, at least when the adverse consequence applies to all similarly-positioned
employees evenly.
In McKinney v. Missouri-Kansas-Texas Railroad Co., 357 U.S. 265 (1958), the Court
interpreted the Universal Military Training and Service Act and held that the employee is entitled
only to any automatic promotions or benefits he would have received.
[The statute] does not guarantee the returning serviceman a perfect
reproduction of the civilian employment that might have been his had he
not been called to the colors. Much there is that might have flowed from
experience, effort, or chance to which he cannot lay claim under the
statute. [The statute] does not assure him that the past with all its
possibilities of betterment will be recalled. Its very important but limited
purpose is to assure that those changes and advancements in status that
would necessarily have occurred simply by virtue of continued
employment will not be denied the veteran because of his absence in the
military service. The statute manifests no purpose to give to the veteran a
status that he could not have attained as of right, within the system of
employment . . . . [A] veteran is not entitled to demand that he be
assigned a position higher than that he formerly held when promotion to
such a position depends, not simply on seniority or some other form of
automatic progression, but on the exercise of discretion on the part of the
employer.
McKinney, 357 U.S. at 271-72.
The Eighth Circuit has stated:
To be entitled to a promotion or advancement in benefits, a
returning serviceman must show that the advancement would have been
awarded simply by virtue of continued employment. If a promotion is at
least partially dependent on the employer’s discretionary determination of
fitness and ability, the Act does not accord the veteran a right to an
automatic promotion.
13
In Levine, the returning veteran was entitled to his former, higher commissions of ten
percent because at the time he applied for reemployment, some other salesmen were earning ten
percent commissions (while some others were receiving commissions of only seven-and-one-half
percent). Id. at 388.
17
Goggin v. Lincoln St. Louis, 702 F.2d 698, 701 (8th Cir. 1983) (citing McKinney, 357 U.S. at
272). Similarly, the district court in Lapine v. Town of Wellesley, 167 F. Supp. 2d. 132, 141 (D.
Mass. 2001), when interpreting the Veterans’ Reemployment Rights Act, stated, “[Plaintiff] is
entitled to any promotions that would have occurred automatically but is not entitled to
promotions that rely ‘on the exercise of discretion’ on the part of the [defendant].’” See also
Rivera-Melendez v. Pfizer Pharm., Inc., Civil No. 10-1012(MEL), 2011 WL 5442370 (D.P.R.
Nov. 9, 2011) (“Plaintiff was not entitled to be reinstated as an API Team Leader because it was
a position for which employees were selected based on managerial discretion and thus not an
escalator position, which is an automatic promotion based on employee seniority.”).
When drafting the final regulations, the Department of Labor received several comments
regarding application of the escalator principle, including questions regarding discretionary
promotions. 70 Fed. Reg. 75271. One commenter suggested that “[t]he escalator principle is
appropriate only in workforces where pay increases and promotions occur automatically (e.g.
according to collective bargaining agreements or tenure tracks,) rather than for achievement or
merit.” The Department cited Goggin and McKinney for the proposition that an employee may
not be entitled to a promotion that was based on an exercise of discretion on the part of the
employer. However, the Department chose not to include such explicit language in the
regulation, instead opting to have the analysis “focus[] on whether a personnel action was
‘reasonably certain.’” Id. “The final rule promotes the application of a case-by-case analysis
rather than a rule that could result in the unwarranted denial of promotions to returning service
members based on how the promotion was labeled rather than whether or not it was ‘reasonably
certain.’” Id.
18
The case law appears to suggest that an employee may only be entitled to benefits that
would have automatically accrued without any discretion on the part of the employer—the
Department of Labor’s refusal to include such explicit language, however, suggests that no
bright-line rule was intended. If it is ultimately determined that the escalator principle only
applies to automatically-accrued benefits, then it is possible that in the future a court might
decide that the escalator principle applies in a consistent fashion when adverse consequences are
involved: an employee may only be subject to adverse consequences that would have been
automatically imposed without any employer discretion. The consequence may be due to
application of a seniority ladder, or it may be due to across-the-board changes that automatically
affect all employees with the same job title or responsibilities. See, e.g., Levine, 178 F.2d 440.
If a court were to find that that the escalator principle can only result in a change in
position when the change occurs automatically, then arguably the escalator principle should not
have applied to Milhauser. It was undisputed that Minco did not eliminate its entire Maintenance
Department, but instead exercised discretion when deciding which four Maintenance Department
employees to terminate as part of the reduction in force. However, Milhauser has never argued
that he could only be subjected to automatic changes in his position, nor has he cited any of the
case law discussed above. His argument has consistently been that he was absolutely entitled to
a job, regardless of what happened to his former position or why. Had the entire Maintenance
Department been eliminated, and all maintenance employees terminated without any discretion
by Minco, Milhauser asserts that because a seniority system was not involved, he was still
entitled to a job, even if it meant one in an entirely different department. The Court will not
grant JMOL in favor of Milhauser based on an argument Milhauser did not make. Milhauser
argues instead that seniority is the only factor that may result in an adverse consequence, and that
19
does not appear to be the law. The Court only raises this question now because it appears to be
an unclear area of law worthy of exploration.
It is evident that under some circumstances, termination may be an appropriate “position
of employment” under USERRA. But there is little, if any, guidance as to which circumstances
those might be. The statute itself, the implementing regulations, and the scarce case law provide
little assistance. For purposes of this motion, however, it is unnecessary to resolve this issue.
Even if termination was not an appropriate position of reemployment in Milhauser’s situation
under section 4313, based on the facts presented at trial, as discussed below, Minco was
nevertheless permitted to terminate Milhauser’s employment.
2. Termination as Part of a Reduction in Force
Throughout trial until now, Milhauser has argued that under no circumstances could
Minco terminate his employment. He argued that because he was a member of the uniformed
services, he was absolutely entitled to a job, regardless of Minco’s changed circumstances. He
repeatedly asserted that Minco’s financial problems and resulting reductions in force could not
make reemployment “impossible or unreasonable” because Minco did make its termination
decisions based on seniority. Thus, according to Milhauser, Minco was not excused from its
reemployment obligations. Following Milhauser’s reasoning, Minco would have had to first
terminate all other employees in the Maintenance Department, and perhaps even all other
employees in the Production Department, before it could even consider terminating Milhauser.
And even then it might have not been impossible or unreasonable to rehire Milhauser. Milhauser
asserted during closing arguments that because Minco “is an $80 million company,” it had to
find a job for Milhauser somewhere. This is simply not the law.
20
USERRA is not a veteran’s preference statute. While the statute is to be “broadly
construed in favor of its military beneficiaries,” Rademacher v. HBE Corp., 645 F.3d 1005, 1010
(8th Cir. 2011), it was not intended to give returning servicemembers special benefits not
provided to other employees. See Monroe v. Standard Oil Co., 452 U.S. 549, 561 (1981)
(explaining that the legislative history of USERRA’s predecessor “strongly suggests that
Congress did not intend employers to provide special benefits to employee-reservists not
generally made available to other employees”). “Reemployment rights under USERRA cannot
put the employee in a better position than if he or she had remained in the civilian employment
position.” 20 C.F.R. § 1002.42. In Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275,
286 (1946), the United States Supreme Court explained that the escalator principle “made the
restoration as nearly a complete substitute for the original job as was possible. No step-up or
gain in priority can be fairly implied.” If the employee had been demoted during his military
leave, then upon his return, he would have lost his old position and would be entitled to only the
inferior one. Id. The statute was meant to “guarantee the veteran against loss of position or loss
of seniority by reason of his absence.” Id. at 285 (emphasis added). The Court explained that
had Congress intended to absolutely prohibit employers from laying off returning veterans where
there was still work that could be performed, Congress could have used language making that
intent clear. 14 Id. at 287. Members of the armed services are therefore “entitled ‘to the same
treatment afforded their co-workers not having such military obligations . . . .’” Monroe, 452
U.S. at 561; see also Lisdahl v. Mayo Found. for Med. Educ. & Research, 698 F. Supp. 2d 1081,
14
In fact, under § 4316(c), USERRA clearly prohibits an employer from discharging any
reemployed servicemember without cause. 38 U.S.C. § 4316(c); see also Rademacher v. HBE
Corp., 645 F.3d 1005, 1012 (8th Cir. 2011) (“Section 4316(c) temporarily changes the at-will
employment status of returning veterans.”). Thus, where Congress intended to confer a special
benefit upon returning servicemen—a benefit not available to other employees—it explicitly did
so.
21
1107 n.21 (D. Minn. 2010) (stating that the plaintiff “seriously misread USERRA” by
interpreting it “as a veterans’ preference statute”), aff’d, 633 F.3d 712 (8th Cir. 2011); Crews v.
City of Mt. Vernon, 567 F.3d 860, 865 (7th Cir. 2009) (explaining that USERRA “requires only
‘equal, but not preferential’ treatment for reservist employees” (citation omitted)); Rogers v. City
of San Antonio, 392 F.3d 758, 764 (5th Cir. 2004) (same). USERRA requires that the returning
servicemember be put in the same position he would have otherwise been in—no better, and no
worse.
USERRA allows an at-will employer to terminate a returning servicemember for a
number of reasons. For example, USERRA allows an employer to refuse to rehire an employee
who had been fired for cause based on actions taken before reemployment. Hays v. Commc’n
Techs., Inc., 753 F. Supp. 2d 891, 899 (S.D. Iowa 2010). In Hays, the court found reemployment
to be unreasonable because the employee had engaged in insubordinate behavior that would have
been cause for dismissal at any other time. Id. at 899-900.
USERRA also provides that when the returning servicemember’s position has been
eliminated as part of a reduction in force, the employer is excused from its reemployment
obligation. See, e.g., Davis v. Halifax County School System, 508 F. Supp. 966, 968 (E.D.N.C.
1981) (explaining that an employer is excused from reemploying a veteran “only where
reinstatement would require creation of a useless job or where there has been a reduction in the
work force that would reasonable have included the veteran”); Cole v. Swint, 961 F.2d 58, 60
(5th Cir. 1992) (“The purpose of the exemption is to allow employers who have eliminated a
reservist’s position or otherwise drastically changed their business to avoid rehiring someone for
a job that no longer exists.”); Kay v. Gen. Cable Corp., 144 F.2d 653, 655-56 (1944) (stating that
the exemption “was intended to provide for cases where necessary reduction of an employer’s
22
operating force or discontinuance of some particular department or activity would mean simply
creating a useless job in order to reemploy the plaintiff,” but that more than just “some loss of
efficiency and possibly some additional expense” is needed).
And despite the protections afforded by section 4316(c), which provides that a person
who is reemployed under USERRA cannot be discharged without cause, an employer is still
allowed to terminate a rehired employee as part of a reduction in force. See Johnson v. Mich.
Claim Serv., Inc., 471 F. Supp. 2d 967, 974 (D. Minn. 2007) (citing numerous cases and
explaining that “when an employer has demonstrated a genuine financial need, which prompts a
reduction-in-force, the termination of an USERRA-protected employee can be ‘for cause’”);
Ferguson v. Walker, 397 F. Supp. 2d 964, 974 (C.D. Ill. 2005) (granting defendants’ motion for
summary judgment and concluding that the employer’s “decision to terminate Plaintiff’s
employment because of budgetary concerns was ‘a reasonable one under the circumstances’”);
Michell v. Cont’l Loss Adjusting Servs., Inc., No. 93-0219-BH-M, 1994 WL 761962, at *7 (S.D.
Ala. May 25, 1994) (finding that the termination of one employee was for “cause” when there
was insufficient work volume to justify retaining two employees in the same position);
Ruesterholtz v. Titeflex, Inc., 166 F.2d 335, 336 (3d Cir. 1948) (rejecting the petitioner’s
argument that adverse economic conditions do not constitute a legitimate basis for discharge and
stating that “[w]e are hardly inclined to assert that an employer is required to continue the job of
a restored veteran purely because the employee is a veteran”).
USERRA does not require that an employer give preference to the returning
servicemember over a more desirable employee. Cf. Madden v. Rolls-Royce Corp., No. 1:06-cv0584, 2008 WL 747290 (S.D. Ind. Mar. 18, 2008) (finding no USERRA violation where, due to
reduced work load, the defendant had to lay off one employee and chose to terminate the
23
reservist’s position, rather than eliminate another employee who performed better than the
reservist); Michell, 1994 WL 761962, at *7 (granting summary judgment in favor of the
employer where there was low work volume and the employer selected the veteran, rather than
another employee, for termination). An employer is only required to terminate a better employee
in order to rehire the returning servicemember when that employee was hired merely as a
replacement for the servicemember while he was on leave, or when the employee was junior to
the servicemember on a seniority ladder. See, e.g., Goggin v. Lincoln St. Louis, 702 F.2d 698,
703-04 (8th Cir. 1983) (explaining that an employer may have to “bump” a junior nonveteran
employee in order to accommodate a returning veteran’s seniority rights); Kay, 144 F.2d at 656
(3d Cir. 1944) (explaining that “the employee should be returned to his position even though he
has been temporarily replaced by a substitute” who is more efficient, personable, and desirable as
a permanent employee); Cole, 961 F.2d at 60 (“If mere replacement of the employee would
exempt an employer from the Act, its protections would be meaningless.”); Fitz v. Bd. of Educ.
of the Port Huron Area Sch., 662 F. Supp. 1011 (E.D. Mich. 1985) (“It is not sufficient excuse
that another person has been hired to fill the position vacated by the veteran nor that no opening
exists at the time of the reapplication.” (quoting Davis, 508 F. Supp. at 968)).
Milhauser notes that “[e]very case that addresses an employer’s financial condition as a
reason to excuse reemployment analyzes the issue under the ‘impossible or unreasonable’
standard currently found in § 4312(d).” Pl.’s Reply Mem. 5. The affirmative defense provision
of USERRA provides that “[a]n employer is not required to reemploy a person under this chapter
if . . . the employer’s circumstances have so changed as to make such reemployment impossible
or unreasonable.” Id. § 4312(d)(1)(A). “For example, an employer may be excused from
reemploying the employee where there has been an intervening reduction in force that would
24
have included that employee.” 20 C.F.R. § 1002.139. The employer has the burden of proving
impossibility or unreasonableness. 38 U.S.C. § 4312(d)(2). The jury found that Minco did not
prove its affirmative defense.
Milhauser now argues that an interpretation that allows termination to be a possible
reemployment position under section 4313 of USERRA renders the affirmative defense
provision under section 4212(d) superfluous. He contends that Minco cannot rely on the same
evidence—that Milhauser would have been terminated as part of a reduction in force due to poor
economic conditions—when arguing that Milhauser’s reemployment position was termination.
Instead, any consideration of the employer’s economic conditions must be limited to the
“impossible or unreasonable” analysis.15 Even if Milhauser is correct, to the extent that he is
arguing that Minco’s economic problems and reductions in force are only appropriately
considered under the affirmative defense provision, he has waived this argument. During trial,
15
It is not clear to the Court that the employer’s financial condition cannot be considered
when determining the appropriate reemployment position. The escalator principle “permits an
employer to take into consideration changes in the workplace during an employee’s period of
military leave.” Woodard v. N.Y. Health & Hosps. Corp., 554 F. Supp. 2d 329, 355-56
(E.D.N.Y. 2008). The regulations discuss adverse consequences resulting from seniority or “job
classification,” but it is not clear what “job classification” means. “The USERRA regulations
recognize that an employer’s reemployment offer may be affected by changes in staffing or work
priorities.” Id. USERRA permits employers to assess a number of factors when determining
how the escalator principle applies. For example, employers may consider “such factors as the
employee’s opportunities for advancement, working conditions, job location, shift assignment,
rank, responsibility, and geographical location, if he or she had remained continuously
employed.” 20 C.F.R. § 1002.194. Nowhere in the statute or implementing regulations is there
an exhaustive list as to which factors a jury may consider when determining in which position
the returning servicemember would have been employed, with reasonable certainty, but for his
military leave. Milhauser asserts that there is no authority to support Minco’s argument that the
employer’s economic conditions can affect a returning veteran’s reemployment position. The
Court recognizes that the cases that closely examine the financial condition of the employer do
so as part of the affirmative defense analysis. However, Milhauser does not point to, and the
Court cannot find, any authority to support the proposition that the employer’s circumstances are
only relevant when considering the affirmative defense of impossibility or unreasonableness
under section 4312(d).
25
he vociferously argued that an employer’s financial problems and reductions in force could not,
as a matter of law, make reemployment “impossible or unreasonable.”16 Citing factually
dissimilar case law, Milhauser contended that reductions in force cannot excuse an employer
from its reemployment obligations. He stated that there is only a very limited time where a
veteran can be let go as part of a reduction in force—when he is let go solely as a result of his
seniority status. In the absence of a seniority ladder, Milhauser argued, the affirmative defense
of “impossible or unreasonable” cannot apply, and that Minco should not even be allowed to
argue that Milhauser would have been let go as part of the reduction in force. For support,
Milhauser cited 20 C.F.R. § 1002.194, the regulation dealing with the escalator principle under
section 4313, not the regulation dealing with the affirmative defense under section 4312. Thus, it
appears that Milhauser himself conflated the two provisions during trial.
Later, during jury instruction discussions, Milhauser insisted that the jury not be informed
that Minco’s economic condition and resulting reduction in force could be considered as part of
the affirmative defense analysis. The draft instruction on the affirmative defense was as follows:
Even when an employee would otherwise be eligible for reemployment,
an employer is not required to reinstate that employee if the employer’s
circumstances have so changed as to make reemployment impossible or
unreasonable. It is Minco’s burden to prove that its circumstances have so
changed as to make reemploying Mr. Milhauser impossible or unreasonable. A
reduction in force that would have included Mr. Milhauser can be such a
circumstance.
16
Milhauser cited to Dunlap v. Grupo Antolin Kentucky, Inc., 2007 WL 855335, at *3
(W.D. Ky. 2007), in which the court stated that “as a matter of law, mere low work load, layoffs,
and a hiring freeze do not make reemployment impossible or unreasonable enough to invoke the
exemption of 38 U.S.C. § 4312(d)(1)(A).” Dunlap, however, did not address reductions in force
that resulted in terminations. Further, within a year after laying off a number of employees, the
employer had either hired or rehired ninety-nine employees in positions similar to that held by
the plaintiff, but had not rehired the plaintiff. Id. at *1. Milhauser’s situation was not similar to
that in Dunlap, because Minco was not merely laying off employees, but was terminating
employees as part of a reduction in force. Additionally, there was no evidence Minco rehired
any of its terminated employees while refusing to rehire Milhauser.
26
Milhauser argued that the last sentence of the instruction was improper. The instruction
was based on 20 C.F.R. § 1002.139, which explains that “an employer may be excused from
reemploying the employee where there has been a reduction in force that would have included
that employee.” There is substantial case law indicating that a reduction in force that reasonably
would have included the plaintiff constitutes a circumstance making reemployment
unreasonable. See, e.g., Davis v. Halifax Cnty. Sch. Sys., 508 F. Supp. 966, 968 (E.D.N.C.
1981); Lapine v. Town of Wellesley, 167 F. Supp. 2d 132, 138 (D. Mass. 2001). Despite the
overwhelming case law (which Milhauser now cites when arguing that an employer’s financial
condition is only relevant to the affirmative defense analysis), he relentlessly argued during trial
that Minco should not be allowed to argue that its financial problems and reductions in force
made reemployment “impossible or unreasonable” under the affirmative defense. He contended
that USERRA created an absolute duty for Minco to rehire him, and it was not impossible or
unreasonable for Minco to do so because it could have terminated some other, perhaps more
competent, employee instead. Milhauser attempted to persuade the Court that Minco’s financial
condition and reduction in force played no role whatsoever in the USERRA analysis. After
protracted debate on the eve of closing arguments, the Court agreed to remove this last sentence,
over objections by Minco. The final instruction that was submitted in writing to the jury (Jury
Instruction No. 10) was as follows:
Even when an employee would otherwise be eligible for reemployment,
an employer is not required to reinstate that employee if the employer’s
circumstances have so changed as to make reemployment impossible or
unreasonable. It is Minco’s burden to prove that its circumstances have so
changed as to make reemploying Mr. Milhauser impossible or unreasonable.
Thus, while Milhauser now argues that an employer cannot make the same economic
argument under section 4313 as it did under its section 4312(d) affirmative defense, Milhauser
27
seemingly ignores the fact that he previously argued that Minco could not make that economic
argument under section 4312(d) either. The case law is clear that the employer’s economic
condition is a relevant factor to be considered somewhere in the USERRA analysis. And despite
finding that Minco did not prove its affirmative defense, it is apparent that the jury, in reaching
its verdict, did consider Minco’s economic problems and resulting reduction in force. The jury
found that Milhauser did not prove that Minco failed to reemploy him in the appropriate position.
Since it was undisputed that Minco terminated Milhauser, the jury could have reached its
conclusion only by first finding that the “appropriate reemployment position” in this case was
termination. The only evidence Minco presented related to Milhauser’s termination was that he
was terminated as part of a reduction in force. Thus, the jury necessarily found that it was
reasonably certain that Milhauser would have been terminated as part of Minco’s reduction in
force.
Based on the jury instructions as a whole, the jury understood that at some point in the
USERRA analysis it was to consider Minco’s economic problems and resulting reductions in
force. The jury obviously considered these factors when finding that Milhauser would have been
terminated had he not taken military leave. The fact that the jury concluded that it was
reasonably certain that Milhauser would have been terminated as part of Minco’s reduction in
force, yet found that Minco did not prove its affirmative defense of impossibility or
unreasonableness, indicates to the Court that the jury may not have understood that Minco’s
economic conditions and reduction in force could have been considered, or how they might be
considered, as part of the affirmative defense analysis. But the law clearly requires consideration
of these factors somewhere, and Milhauser provided no assistance to the Court as to where
consideration of those factors belonged. He previously argued they could not be considered as
28
part of the affirmative defense; he now argues they can only be considered as part of the
affirmative defense. He cannot have his cake and eat it too. At Milhauser’s insistence the Court
did not instruct the jury that it could consider the reduction in force as part of the affirmative
defense: he cannot demand incomplete jury instructions, and then benefit by objecting that the
jury might have been confused.
The overall purpose of USERRA is to put a returning servicemember back in the position
he would have been in had he not taken military leave. He is not to be made worse off. But
“[r]eemployment rights under USERRA cannot put the employee in a better position than if he
or she had remained in the civilian employment position.” 20 C.F.R. § 1002.42. Yet that is
precisely what Milhauser urges the Court to do. Despite the overwhelming evidence that
Milhauser lacked the skills, expertise, or versatility of other Maintenance Technicians, and
despite the undisputed evidence that there had been numerous complaints about the quality of
Milhauser’s work, he asserts that he should have been given preference over these other more
experienced, more versatile, or more competent employees who were not terminated. Because of
the fortunate happenstance that he went on military leave at a time when his employer was
suffering from a major economic downturn and severe decline in business, Milhauser believes
that he should have been secure in his job while other, better employees were let go. His
interpretation of USERRA effectively renders it a veterans’ preference statute—something that it
simply is not.
The jury determined that Milhauser was not made worse off by his military leave—he
would have been terminated even had he remained continuously employed. Despite any possible
misunderstanding by the jury regarding the analysis of the appropriate reemployment position
and analysis of the affirmative defense, the jury instructions as a whole fairly and adequately
29
stated the substantive law, as demonstrated by the jury’s ultimate arrival at a verdict that
appropriately considered all the relevant factors under USERRA. Thus, Milhauser is not entitled
to JMOL or a new trial.
Moreover, based on the evidence presented at trial, it would have been against the great
weight of the evidence for the jury to find that Milhauser would not have reasonably been
included in Minco’s reduction in force. A defendant proves its affirmative defense if it shows
that reemploying the returning servicemember was impossible or unreasonable, and this can be
shown by a reduction in force that reasonably would have included the returning servicemember.
38 U.S.C. § 4312(d); 20 C.F.R. § 1002.139. The evidence adduced at trial overwhelmingly
supported Minco’s affirmative defense. It was undisputed that in 2008 and 2009, Minco suffered
from a severe decline in business as part of the nation-wide economic downturn. It was
undisputed that Minco took a number of cost-cutting measures, including two company-wide
reductions in force. It was also undisputed that as part of the second reduction in force, four
employees from the Maintenance Department were to be terminated. Mr. Toohey testified that
he based his termination decisions on two factors: the employees’ versatility and knowledge—
employees who he retained either had to be so versatile that they could work on a large volume
of equipment, or have unique knowledge that made them indispensable to the company.
Milhauser was selected for termination because of his relatively limited experience, abilities, and
skill sets. Mr. Toohey believed that Milhauser was not as versatile as other employees—he was
not able to perform maintenance or repairs on as many pieces of equipment as some of the
retained Maintenance Technicians. Further, Mr. Toohey testified that Milhauser did not have
any knowledge that made him invaluable to the company. Moreover, the evidence presented at
trial revealed that Milhauser would have been considered for termination even sooner had he not
30
been a member of the uniformed services. Milhauser presented no evidence to rebut Mr.
Toohey’s testimony, other than his own conclusory opinion that he was more skilled than some
of the employees who were retained. He did not purport to have any unique knowledge, and it
was undisputed that his background was in electronics, and there were other Maintenance
Technicians with electronics expertise. There was no evidence that Milhauser’s military status
or military leave had any impact at all on Mr. Toohey’s decision.
Minco also presented compelling evidence that Milhauser was not selected for a job in
the Production Department because of previous complaints regarding his work performance,
attitude, and behavior. Ms. Himmelgarn testified about complaints she had received regarding
Milhauser’s inability to service or repair the equipment in her department. She testified that
Milhauser’s “repairs” sometimes led to the equipment becoming completely inoperable. In fact,
some employees in her department specifically requested that Milhauser not work on their
equipment and asked engineers from other departments to help them instead. Ms. Himmelgarn
explained these issues to other Production Managers, who relied on her advice when deciding
not to offer Milhauser one of the open positions in the Production Department. Milhauser
presented no evidence to rebut this testimony, nor were there similar complaints or issues
regarding the employees to whom such production job offers were made.
If the Court were to retry this case, it would have to find as a matter of law that Minco
proved its affirmative defense that it would have terminated Milhauser as part of its reduction in
force. There was no evidence, not even a scintilla, to the contrary. Thus, even if Jury Instruction
No. 8 was misleading, the jury came to the correct conclusion based on the evidence presented.
In fact, it came to the only conclusion that the evidence permitted. If retried, the outcome would
remain unchanged. Based on the evidence presented at trial, judgment in favor of Milhauser is
31
entirely inappropriate. The Court therefore denies Plaintiff’s Motion for Judgment as a Matter of
Law. Further, Milhauser was not prejudiced by any possible jury confusion regarding the
escalator position instruction, so a new trial is not necessary to prevent injustice. See Bening v.
Muegler, 67 F.3d 691, 696 (8th Cir. 1995) (“If the objecting party can . . . demonstrate that it was
prejudiced, a new trial is necessary.”). If anything, a new trial would be a pointless exercise in
judicial futility.
III.
CONCLUSION
Based on the files, records, and proceedings herein, and for the reasons stated above, IT
IS ORDERED THAT:
1. Plaintiff’s Motion for Judgment as a Matter of Law, or in the alternative, for New
Trial [Docket No. 81] is DENIED.
Dated: March 2, 2012
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
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