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Matthew Hirsch
The Recorder
01-26-2007

Battle lines are being drawn for a new phase of the Iraq war. This time, however, plaintiffs lawyers are leading the offensive, and they view employers as the enemy.

In a test of a military leave law updated after the Persian Gulf War, a client of San Francisco's Rudy, Exelrod & Zieff sued one of Northern California's largest health-care providers Tuesday for alleged discrimination based on her military service. Some lawyers and veterans say the suit highlights the challenges defense lawyers face when a worker goes to war and again when she returns home.

Today there are more U.S. troops stationed overseas than at any point since World War II, including thousands of reservists and National Guard members.

So far, relatively few of these soldiers have gone to court to preserve their rights under the Uniformed Services Employment and Reemployment Rights Act, passed by Congress in 1994 to make sure that soldiers have jobs to come home to. Rudy, Exelrod & Zieff partner David Lowe isn't the first to build a case using USERRA. The U.S. Department of Justice, for example, sued American Airlines last year on behalf of three pilots who were denied benefits during their military service.

Among the employment bar, opinions vary on whether such litigation is likely to multiply. But with more reservists in Iraq than in any recent military engagement, defense lawyers are already getting more questions from clients about USERRA.

AnnaMary Gannon, a partner at Littler Mendelson in San Francisco specializing in employment law, represented a company in a USERRA complaint before the Labor Department that was dismissed earlier this month.

"There is no question that because of our involvement in Iraq, we are getting more questions under the statute," she said. "More employers have employees who are on extended military leave and that's because we are staffing the Iraq war with [so many] reservists."

Gannon said companies usually come to her with such common compliance questions as: How soon after returning must an employee get his job back? And if the worker returns with a disability, what efforts must be made to accommodate him?

The complaint filed in the U.S. District Court for the Northern District of California Tuesday accuses Sutter Health, a Sacramento-based hospital chain, of firing Air Force Lt. Col. Debra Muhl last summer after she notified the company she was being sent to Iraq for four months.

Muhl, an executive who once ran Sutter's $50 million Joint Cardiac Program, said Tuesday that a supervisor appeared upset to learn she would miss extended periods of work, and at one point he "strongly suggested that I resign from the Air Force." She was eventually told that Sutter eliminated her position to save some money, an explanation she and Lowe claimed was a pretext for discrimination during a press conference Tuesday.

In an e-mail to The Recorder, Sutter Health Communications Director Karen Garner said the company had been assessing ways to reduce costs for many months prior to eliminating Muhl's position.

"The decision had been made well prior to" the time Muhl was informed her job was eliminated, Garner wrote. "Although proper procedures were followed … [it is] regrettable that the notification occurred so close to herinforming us of her need to take another military leave of absence."

"We're proud to have supported Ms. Muhl through multiple separate military leaves during her employment," Garner added.

Lowe, the Rudy, Exelrod & Zieff partner, predicted the company's defense strategy in Muhl v. Sutter Health, 07-00431, may be limited by worker-friendly aspects of the USERRA law.

USERRA has a narrow standard that says employers must prove that accommodating a returning soldier would have been "impossible or unreasonable."

"We just don't think this was a case where it was impossible or unreasonable for an employer the size of Sutter Health," Lowe said.

Another defense available under USERRA, undue hardship for the employer, can only be raised when the employee on leave was disabled, which doesn't apply in Muhl's case, Lowe added.

According to figures from the U.S. Department of Labor's Veterans' Employment and Training Service, 659,073 U.S. troops have left military service since Sept. 11, 2001. The Labor Department received 6,911 USERRA complaints during that time.

The vast majority of those complaints are said to be handled without litigation by Defense Department volunteers, like Donald Dorfman in Sacramento, a criminal defense lawyer and former Air Force judge advocate general.

"The reason there's not a lot of litigation on this is because the law is very clear," Dorfman said. "Most of the time, [employers] see the light."

Gannon agreed. USERRA is "very pro-veteran," she said, "but I don't think most employers have a problem with that."