Pepsi Bottler Hit with $83K USERRA Violation Award

July 28, 2006 ( - A Pepsi bottling company was hit with a $83,000 federal court judgment for denying an Army reservist a pay hike because of his military basic training.

US District Judge Michael Barrett of the US District Court for the Southern District of Ohio issued the award after conducting a bench trial in a lawsuit filed by Kevin Koehler against PepsiAmericas after not receiving the extra compensation. Koehler alleged that the bottling company violated the U niformed Services Employment and Reemployment Rights Act (USERRA).

Because Barrett found that USERRA protected Koehler’s right to the pay differential given by PepsiAmericas to all Army Reserve employees – equal to the difference between normal military pay and Pepsi salary – and the court gave Koehler double compensatory damages.

Barrett also ruled that while an employer does not have to pay an active service member’s wages, the company can adopt a policy to make up the difference between military pay and an employee’s regular salary. However, when an employer adopts such a policy, the court held, USERRA protects the employee’s rights under that policy.

Koehler also received punitive damages after Barrett ruled that Pepsi put $10,822.22 into Koehler’s bank account and then withdrew it without his authorization after deciding he wasn’t properly entitled to it. That act led to a conversion of his property, demonstrating “malice, egregious fraud, oppression and insult,” Barrett asserted.

Koehler called Pepsi and Pepsi told him that it “changed its mind.”

The court rejected Pepsi’s argument that Koehler was not entitled to the differential pay benefit because that benefit was not intended for employees who voluntarily enlist in active duty. The court found that Koehler did not enlist in active duty, but into the Army Reserve, and was then called for initial active duty training.

The case is Koehler v. PepsiAmericas , S.D. Ohio , No. 1:04cv742,7/18/06 .