USERRA Still Has No Statute of Limitations

            Recently, the Sixth Circuit handed down a decision, holding that the employer could enter into an agreement with its employees limiting the time within which they could sue on any employment-related claim to six months.  (Hat tip to Molly DiBianca at the Delaware Employment Law Blog).  The case before the Sixth Circuit had been filed under USERRA within three years after the plaintiff had been terminated, allegedly due to his military service in Iraq.  The District Court granted the employer’s motion to dismiss on the ground that the employment agreement required that such USERRA claim be filed within six months of termination, and the Sixth Circuit affirmed.  See Oswald v. BAE Indus., Inc., No. 11-1119, 2012 U.S. App. LEXIS 10005 (6th Cir. May 12, 2012). 

            Now, USERRA is a rather unique statute in many respects – one of which is that it lacks a statute of limitations.  That fact did not preclude the Sixth Circuit from reasoning that, by agreement, employer and employee could create a six-month statute of limitations.  And, as we have blogged earlier (Can an Employer in the Employment Application Shorten the Statute of Limitations for Anti-Discrimination Claims?) here, and (Federal Express Six Month Limitation on Statutes of Limitations in Employment Disputes Approved) here, the courts generally have been approving such agreements in employment cases.  See e.g., Ravenscraft v. BNP Media, Inc., No. 09-C-6617, 2010 U.S. Dist. LEXIS 37919, 2010 WL 1541455, at *1 (N.D. Ill. Apr. 15, 2010); PSC Info Group v. Lason, Inc., 681 F. Supp. 2d 577, 587 (E.D. Pa. 2010); Cole v. Federal Exp. Corp., No. CV-06-3485, 2008 U.S. Dist. LEXIS 71431, 2008 WL 4307090, at *9 (E.D. Pa. Sept. 19, 2008); Vincent v. Comerica Bank, No. H-05-2302, 2006 U.S. Dist. LEXIS 28613, 2006 WL 1295494, *5-6 (S.D. Tex. May 10, 2006); Badgett v. Federal Express Corp., 378 F. Supp. 2d 613 (M.D.N.C. 2005); Fink v. Guardsmark, LLC, No. CV 03-1480-BR, 2004 U.S. Dist. LEXIS 16970, 2004 WL 1857114, at *1 (D. Or. Aug. 19, 2004); Johnson v. DaimlerChrysler Corp., No. C.A. 02-69 GMS, 2003 WL 1089394, at *1 (D. Del. Mar. 6, 2003).

            But, before you pick up the phone to call your client with your latest brilliant idea, understand that Oswald is like a grandfather clock – it is an out-of-date antique that has no application to any claims that arise after October 10, 2008, the effective date of the Veterans’ Benefits Improvement Act, Pub. L. No. 110-389, §311(f)(1), 122 Stat. 4145, 4164 (2008) (codified at 38 U.S.C. § 4327(b)) (the “VBIA”).  In particular, Oswald may not apply to claims that were not time-barred as of the effective date of the VBIA, even when those claims are filed after they otherwise would be time-barred, absent the VBIA.  The VBIA contained an amendment to USERRA which replaced USERRA’s prohibition on the application of state statutes of limitations with the following language:

If any person seeks to file a complaint or claim with the Secretary [of labor], the Merit Systems Protection Board, or a Federal or State court under this chapter alleging a violation of this chapter, there shall be no limit on the period for filing the complaint or claim.

VBIA, Pub. L. No. 110-389(f)(2)(b).  Oswald’s claim arose on September 14, 2007, the date of his termination.  Furthermore, in Oswald, the plaintiff admitted that the amendment did not apply retroactively.  And in Middleton, described below, the Seventh Circuit declined to retroactively apply the unlimited-filing period contained in the VBIA. 

In Middleton v. City of Chicago, 578 F.3d 655 (7th Cir. 2009), subsequent to the passage of the 2008 VBIA, a panel of the Seventh Circuit held that it was not retroactive, and thus a claim under USERRA was held to be subject to the four-year catch-all limitations period set forth in 28 U.S.C. § 1658.   In Middleton, plaintiff’s USERRA claim was filed 13 years after it had accrued, and prior to the VBIA’s enactment.  See also Wagner v. Novartis Pharmas. Corp., 565 F. Supp. 2d 940, 945 (E.D. Tenn. 2008) (collecting cases); Nino v. Haynes Int’l, Inc., 2005 U.S. Dist. LEXIS 43971 (S.D. Ind. Aug. 19, 2005).  See our blog’s discussion of Section 1658, Section 1981 Retaliation Claims Governed by Federal Catch-All 4-Year Statute of Limitations, here.  Previously, the Seventh Circuit had applied the equitable doctrine of laches to USERRA claims.  See Maher v. City of Chicago, 547 F.3d 817, 821-23 (7th Cir. 2008); Miller v. City of Indianapolis, 281 F.3d 648, 653-54 (7th Cir. 2002).  In neither Maher nor Miller did the parties argue that the 1994 passage of USERRA, replacing the Veterans’ Reemployment Rights Act (“VRRA”) was a federal statute enacted after December 1, 1990 and thus subject to § 1658’s 4-year catch-all statute of limitations. 

In Goodman v. City of New York, 2011 U.S. Dist. LEXIS 111069 (S.D.N.Y. Sept. 26, 2011) the Court, Judge Richard J. Sullivan, distinguished Middleton and held that “the express language of the VBIA indicates that it applies to any plaintiff who, like Doherty, filed his complaint after the statute was enacted.”  Goodman held that a USERRA claim that accrued on January 27, 2007 was not time-barred despite the fact that the complaint was not filed until May 19, 2011 – four months after the expiration of the four-year § 1658 statute of limitations – because the claim was “live” at the time of the enactment of the VBIA, 38 U.S.C. § 4327(b).  See also Andritzky v. Concordia Univ. Chicago, 2010 U.S. Dist. LEXIS 35941 (M.D. Ill. April 8, 2010) (holding that USERRA claims accruing within four years of the VBIA’s enactment are governed by the VBIA and are therefore not time-barred); Roark v. Lee Co., 2009 U.S. Dist. LEXIS 108707 (M.D. Tenn. Nov. 20, 2009) (same).

            To summarize:

·         A USERRA claim that arose before October 10, 2008 (the effective date of the VBIA) and expired by virture of § 1658’s 4-year statute of limitations prior to October 10, 2008, is moribund and is not revived by the enactment of the VBIA in 2008.

·         A USERRA claim that arose before October 10, 2008, and has expired before October 10, 2008, by virture of an express contractual agreement to shorten the 4-year statute of limitations is moribund and is not revived by the enactment of the VBIA in 2008.

·         A USERRA claim that arose after October 10, 2008, cannot be time barred by § 1658 or an agreement to shorten the time period to sue.

A USERRA claim that arose before October 10, 2008 and “expired” after October 10, 2008 by virtue of § 1658 or an agreement to shorten the statute of limitations may not be time barred.  See Goodman, 2011 U.S. Dist. LEXIS 111069, supra.

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