Employment — USERRA

Listen to this article

U.S. Court of Appeals
For the Seventh Circuit

Civil

Employment — USERRA

An employee was entitled to a longevity bonus for time that would have accrued but for a leave of absence.

“Applying the Alabama Power test to DeLee’s situation, there is no question that a full longevity payment would have accrued but for his leave of absence. And, as described above, every meaningful aspect of the ‘perquisites of seniority’ considered by the Supreme Court in Alabama Power and Coffy cuts decisively in DeLee’s favor.

Nevertheless, Plymouth maintains that its longevity benefit is compensation for work done during the prior year, staking its position on the ‘simple idea that wages are earned through work.’ But longevity payments are not wages. And, in any event, that ‘simple idea’ contravenes USERRA’s guarantee of seniority benefits, which include seniority-based bonuses. See 38 U.S.C. § 4303(2). In Coffy, the Supreme Court emphasized that ‘[e]ven if eligibility for SUB payments were closely related to hours worked, that fact would not, by itself, render them compensation rather than seniority rights.’ 447 U.S. at 203. That is because the nature of the benefit, not the formula by which it is calculated, is the ‘crucial factor, “for even the most traditional kinds of seniority privileges could be as easily tied to a work requirement as to the more usual criterion of time as an employee.”’ Id. at 204 (quoting Alabama Power, 431 U.S. at 592). Ultimately, the history of SUB plans, as well as the plan’s specific provisions, compelled the Coffy Court’s conclusion that the benefit was a reward for lengthy service. Id. These same considerations dictate the outcome here, where we conclude that the original purpose of Plymouth’s longevity pay for police was to reward them for lengthy service and that that purpose survived the subsequently-enacted proration ordinance.

Accordingly, the ‘real nature’ of longevity pay forecloses the City’s argument that its prorated payments to police officers are compensation for work actually performed that year.

Reversed and Remanded.

14-1970 DeLee v. City of Plymouth

Appeal from the United States District Court for the Northern District of Indiana, Moody, J, Flaum J.

Full Text