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Legal loophole allows companies to fire military reservists who go to war

Jun 26, 2016 / Media Coverage / — Andrew Tilghman

Editor's note: This story was originally published Sunday, June 26, 2016. It was updated to reflect congressional testimony made Wednesday, June 29.

Kevin Ziober was a lieutenant in the Navy Reserve in 2012 when he received deployment orders to Afghanistan. On his last day of work before leaving, dozens of co-workers gathered for a sendoff. There was a cake and balloons. And then, Ziober says, he was summoned to the human resources office — and fired.

Ziober believes he was fired because of his military service and the inconvenience it caused his employer. If so, that would be a violation of federal law. The Uniformed Services Employment and Reemployment Rights Act, known as USERRA, exists to protect military reservists against such discrimination.  

Traditionally, someone in his position would consider suing his employer and letting a judge or a jury decide whether the dismissal was fair. But Ziober may never get that chance because his employer asked him — Ziober says he was “forced” — to sign a fine-print legal document surrendering the right to sue and agreeing to resolve disputes outside of court.

But do such arbitration agreements apply to USERRA? That's now a question for the American legal system.

Ziober's case will be heard in July by the highest federal court in California, the Ninth Circuit Court of Appeals. The Navy officer wants to sue his former employer, but first he must convince the judge that he has the right to do so.

Ziober’s former employer, a real estate management firm called BLB Resources, disputes his version of the events, saying Ziober’s work performance had declined, and that his firing became necessary when the federal contract to which he was assigned was not renewed. Regardless, the agreement is firmly grounded in law, the company's attorney said.          

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Legal exemption or loophole?

The issue is becoming more common. While military reservists have faced routine mobilizations for more than a decade, many companies during the past few years have expanded their use of these arbitration agreements. 

Today, it's almost impossible to register for a credit card or cell phone service without also signing an arbitration agreement, often buried in fine print, which prevents you, the customer, from ever suing that company in question. Employers, especially large corporations, use them to shield themselves from a host of liabilities that include personal injury or sexual harassment. And dozens of class action lawsuits, like a recent one filed by employees of Taco Bell, are thrown out of court based on these agreements.

But USERRA rights might be different. Protecting service members from employment discrimination is directly linked to military readiness and the Defense Department’s ability to recruit and retain more than 800,000 part-time troops every year. The 1994 law was established to ensure that the veteran "who was called to the colors not be penalized on his return by reason of his absence from his civilian job,” wrote one of Ziober’s attorneys ...

Some lawmakers in Congress also are worried about the issue. Connecticut Sen. Richard Blumenthal, a Democrat, has proposed a law that would eliminate any ambiguity in the USERRA law and state explicitly that service members cannot be blocked from the court system by arbitration agreements.

“After fighting for our freedom overseas, no service member or veteran should have to fight for their job when they come home,” Blumenthal said. “And they certainly shouldn’t be denied their right to their day in court if their federal rights are violated."

Ziober testified about his own personal experience on June 29 before the Senate Committee on Veterans Affairs. 

"I was shocked to learn that I was being terminated from my job on the eve of my deployment to a combat zone. It created an unimaginable amount of concern and anxiety about how I would earn a living once my military orders ended," he said during his testimony. 

Congress has not voted on the measure, so for now the issue will remain a matter for the court system. 

A Defense Department spokesman declined to comment on the issue.     

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