Court: USERRA Doesn't Preclude Workplace Arbitration

August 10, 2006 ( - A federal appellate court ruled employer arbitration policies may be used to settle employee complaints including potential violations of laws barring discrimination against military service members.

In doing so, the 5 th US Circuit Court of Appeals threw out a decision favoring plaintiff Michael Garrett by a federal judge in the Northern District of Texas. The lower court judge agreed with Garrett that his former employer, Circuit City , had violated his rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA) as a member of the Marine Reserves. Garrett alleged the violation occurred when the electronics retailer insisted his dispute go to arbitration rather than to litigate it in court.

According to a the appellate ruling written by Chief Circuit Judge Edith Jones, disposing of the dispute between Garrett and the company via arbitration does not run afoul of USERRA rights granted to service members by Congress. “It is not evident from the statutory language that Congress intended to preclude arbitration by simply granting the possibility of a federal judicial forum,” wrote Jones in the ruling. “Congress took no specific steps in USERRA, beyond creating and protecting substantive rights, which could preclude arbitration.”

Jones said Garrett joined Circuit City at a Texas location in 1994. In 1995 , the chain adopted a nationwide policy for dispute resolution­. Garrett signed his acknowledgment of receiving the notice and did not opt out of the policy during the 30-day period when it was possible.

According to the decision, by the December 2002 and March 2003 period, when the US was ramping up for the second war inIraq, Garrett was managing a Dallas regional service center. He claimed his supervisors, knowing his reserve status, began criticizing and disciplining him.In March 2003, Garrett was fired, which he attributes solely to his status as a Marine Reserve Officer.

Judges also noted that federal employees must take their complaints of USERRA violations to the Merit Systems Protection Board rather than to court, indicating that alternative methods are permissible under the law. Garrett must arbitrate his wrongful termination claim.

Finally, the appellate judges rebuffed Garrett’s argument that granting his appeal was the most patriotic thing for the court to do.

“Garrett finally argues that the important public policy interest behind USERRA, embodying the protection of soldiers and thus the enhancement of American security, necessitates denying the request for arbitration,” wrote Jones. “Although we agree that the interests USERRA protects are important, it is wrong to infer that the service members’ substantive rights are not fairly and adequately protected by arbitration proceedings under the FAA. USERRA’s purposes can be fully realized through arbitration.”

The case is Garrett v. Circuit City Stores, U.S. Court of Appeals for the 5th Circuit, No. 04-11360 (5/11/06). The appellate ruling is  here .