Court "Drops The Anchor" On Naval Reservist's USERRA Suit

Finds Worker Lacked Evidence Of An Adverse Employment Action

A federal appellate court has dismissed a lawsuit brought by an employee who claimed that he was demoted because of his military service in violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA). According to the court, a reasonable jury could find that the worker’s new job was a lateral transfer that did not amount to an “adverse employment action.” Maher v. City of Chicago, No. 07-2911, Seventh Circuit Court of Appeals (October 31, 2008).

Factual Background

Jerome Maher, who had been in the Naval Reserves since 1987, was hired by the City of Chicago’s Aviation Department in 1990. According to Maher, the City told him that while his title would be “Assistant Commissioner,” for budgetary reasons his position would temporarily be recorded as “Director of Development Finance.”

In 1991, Maher was called to active duty in the Gulf War. Maher alleged that his supervisor expressed displeasure about his deployment and criticized him for his military service.

In 1993, the Aviation Department was reorganized and moved to O’Hare International Airport. As part of the reorganization, Maher was given a new title (“Manager of Finance”) and a salary increase. Following the move, however, Maher’s office was unusable for approximately one week while it was used to store furniture from other offices. Maher also claimed that he continued to be harassed about his military service by Department supervisors.

In 1996, Maher was called to active duty in Bosnia. During his absence, his sister claimed that she was unable to secure Maher’s paycheck for 11 weeks. Upon his return to work, Maher claimed, his supervisor refused to reinstate him to his previous duties. After he complained to the Deputy Commissioner, Maher was restored to his former responsibilities. In January of 1998, however, he was transferred to the City’s Landside Operations.

In 2003, Maher sued the City. According to Maher, the City subjected him to adverse employment actions based on his military service on three occasions: (1) in 1991, by not giving him the title of Assistant Commissioner; (2) in 1993, by assigning him the title Manager of Finance (and again not appointing him Assistant Commissioner); and (3) in 1998, by transferring him to Landside. The trial judge granted summary judgment in favor of the City on the 1991 and 1993 claims, and a jury found in favor of the City on the 1998 claim. Maher then appealed.

Legal Analysis

Maher first challenged the jury’s decision against him on the 1998 transfer to Landside. The Seventh Circuit found that the appeal failed on procedural grounds since Maher had not filed a pre-verdict or a post-verdict motion for judgment as a matter of law. As a result, the court found that it could not review the jury verdict. The court nonetheless found that even if this procedural roadblock is overlooked, Maher’s claim would have failed.

To prevail, the Seventh Circuit found, Maher must show that he suffered an adverse employment action which was motivated, at least in part, by his military service. Maher alleged that he suffered an adverse action because he did not have a staff at Landside and because he was not using his CPA qualifications. The court found that although his lack of staff suggested less responsibility, Maher was using his financial background by managing large-scale projects and millions of dollars worth of billing at Landside.

Maher next alleged that he did not have an opportunity to advance at Landside. However, testimony was presented to the contrary. Maher also argued that one of his supervisors was less educated than he was. The Seventh Circuit reasoned that the fact that one of his superiors had less education than Maher did not amount to an adverse employment action. “Otherwise,” the court ruled, “a company would have to ensure that its employees were placed on the company ladder in a strict educational hierarchy.”

Lastly, the court rejected Maher’s argument that he was subjected to an adverse employment action because he was required to manage snow removal. The fact that he was managing rather than plowing the snow himself, the court found, was dispositive.

The Seventh Circuit next considered Maher’s argument that other workers were promoted ahead of him, that he was subjected to disparaging remarks, that his pay was delayed while he was in Bosnia, and that furniture was temporarily stored in his office. The court found that Maher failed to show that the commissioner who transferred him to Landside was responsible for promoting other employees. The court also ruled that the supervisors’ alleged disparaging remarks were irrelevant to Maher’s claims.

Finally, the court concluded that the delay in his pay and the furniture storage were “isolated incidences,” which were “totally unconnected” to Maher’s transfer to Landside. Thus, the court rejected Maher’s challenge and affirmed the jury’s verdict.

Practical Impact

According to Michael Cramer, a shareholder in Ogletree Deakins’ Chicago office: “This ruling is a victory for employers because it shows that everything an employee sees as a personal slight or slap in the face will not necessarily amount to an adverse action. Still, this case should remind employers to consider carefully how to carry out a lateral transfer and communicate the company’s intent to the employee. A person who believes he has been demoted may go to extreme lengths in pursuit of perceived justice even though the employer never intended to demote him.”

Note: This article was published in the January/February 2009 issue of The Employment Law Authority.